Adopting Blockchain for Service Innovation in Customs Clearance: Bahrain Customs Affairs Case Study

Blockchain is a distributed ledger technology that can be used for multiple purposes, such as making payments, recording transactions, and sharing information. Considering many features and benefits of blockchain such as immutability and traceability, several organisations started adopting blockchain and utilising it in their services – for instance, supply chain and logistics processes including shipments tracking. However, there are a number of challenges to the adoption of blockchain: for example, lack of awareness on blockchain, and regulatory issues and insufficient policies. Therefore, the implementation of service innovation and design measures for blockchain services, as well as appropriate policies to support blockchain adoption, will contribute to achieve the benefits of blockchain and reduce the challenges of blockchain adoption. The literature review revealed a lack of empirical research on blockchain in supply chain and logistics, including customs in the public sector. This includes a lack of empirical research on the benefits and challenges of adopting blockchain, and the impact of blockchain on customs clearance services. Furthermore, the review highlighted that customs authorities play a major role in the supply chain and logistics process especially in terms of clearance services which contribute to the movement of goods across borders, and that blockchain can contribute to improving clearance services. Therefore, this research investigated the case of Bahrain customs authorities adopting blockchain in clearance services. Accordingly, the aim of this PhD research is to gain insights into how customs authorities, such as Bahrain Customs, can successfully improve services by adopting blockchain and to bring recommendations to effectively adopt and utilise blockchain in services. In order to achieve the PhD research aim and objectives, this research used a single case study approach of one organisation which is Bahrain Customs. The research took mixed methods approach as research paradigm and strategy. Accordingly, the research objectives were achieved using: (i) interviews with participants with blockchain technical expertise who worked closely in adopting blockchain in Bahrain Customs; (ii) survey with Bahrain Customs employees; (iii) document analysis (e.g. customs laws and regulations, strategic plans); (iv) cross-case analysis of other cases across sectors (based on desk research) to further validate and generalise the findings of Bahrain Customs; and (v) focus groups with relevant experts and stakeholders to validate recommendations on policy interventions supporting blockchain service innovation.

This research identified: (i) the reasons why Bahrain Customs decided to adopt blockchain in customs clearance services (e.g. improving trade facilitation); (ii) how blockchain will improve and innovate customs clearance services (e.g. reducing service time); (iii) the key performance indicators (KPIs) to measure the success of adopting blockchain in customs clearance services (e.g. clearance service time); and (iv) the reasons for being satisfied with Bahrain Customs choosing to adopt blockchain (e.g. facilitating customs processes and procedures). This research also identified: (i) expected benefits of adopting blockchain (e.g. improving risk management); and (ii) challenges of adopting blockchain (e.g. lack of stakeholders’ awareness, expertise, and skills on blockchain). Furthermore, this research provided organisational and national level recommendations. This included key recommendations on potential policy intervention for Bahrain Customs, and recommended principles of blockchain national strategy for the Kingdom of Bahrain. In addition, this research identified a number of service design and innovation measures (e.g. collecting and analysing data and requirements and feedback from stakeholders), and policy recommended elements for blockchain (e.g. information security and privacy). Although the findings and key recommendations of this PhD research are applicable to Bahrain Customs, they can be informative and useful to certain organisations located in a similar region and with similar characteristics compared to Bahrain Customs and are in the process of adopting blockchain or considering it. The recommendations can be changed to be suitable for other organisations. However, this relies on the challenges they face and the aim of implementing such recommendations.