Exploring Blockchain in Logistics
Social Media, Big Data, and Artificial Intelligence have all had starring roles in our digital revolution.
Each required you to consider their virtues and how they affect logistics. Lately, Blockchain has become the buzzword headlining articles and industry keynotes.
The parcel-shipping world is no exception.
Speaking at Consensus 2018, FedEx Chaiman and CEO Fred Smith announced Blockchain as the next frontier for logistics.
“We’re quite confident that it has big, big implications in supply chain, transportation and logistics,” he said.
Late last year, UPS joined the industry standards group Blockchain in Trucking Alliance (BiTA). FedEx joined not long after.
DHL, meanwhile, has already explored and evaluated its use in life sciences and healthcare.
Here are some thoughts on what blockchain can mean for logistics.
A “Universal Supply Chain Operating System”
In 2015, supply chain expert Adrian Gonzalez predicted that the decentralized architecture of blockchain would have the potential to trigger a new wave of innovation in how supply chain applications are developed, deployed, and used.
“The blockchain, in essence, could become the new operating system for Supply Chain Operating Networks — like Descartes, Elemica, GT Nexus, LeanLogistics, and others that combine B2B connectivity with software applications — and also help federate those networks,” said Gonzalez.
Organizations and companies are beginning to drive towards this vision. An example is BiTA, which is a forum created to help lead the charge towards unified blockchain standards for use in the freight industry.
Increased Transparency, Reduced Time Delays, Costs, and Human Error
Blockchain has many possible uses within the logistics world…here are a few areas of potential improvement:
Recording the quantity and transfer of assets – like pallets, trailers, containers, etc. – as they move between supply chain nodes and ultimately to a consumer. No more proprietary feeds that can’t be shared.
Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents.
Certifying properties or conditions in a meaningful and trackable way. An example is determining and guaranteeing whether a food product is organic or fair trade.
Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc.
Sharing information about manufacturing process, assembly, delivery, control, and maintenance of products with suppliers, vendors and consumers.
An underlying theme of all of these improvements is a core aspect of blockchain, Transparency and Security. The ability to record this disparate information in a way that can be trusted to have not been altered or manipulated is key to blockchain’s appeal for logistics uses.
Use Case: Transparency for a Better World
Dr. Jutta Steiner, chief operating officer of Provenance, a technology company that empowers brands to take steps toward greater transparency by tracing the origins and histories of products, wrote for Business of Fashion that blockchain can provide consumers confidence around key attributes of purchased goods — such as ethical standards, origin and authenticity.
“If we are to avoid the mistakes of the past that have led to the ongoing environmental and societal atrocities caused by opaque supply chains, ‘Made in’, ‘Made with’ and ‘Made by’ must all become the values by which products are judged,” said Steiner.
On January 1, 2021, the Conflict Minerals Regulation law will come in effect across the European Union. The regulation will require companies to publish more information about their supply chains, specifically related to use of tin, tantalum, tungsten, and gold because the trade of these minerals sometimes finance armed conflict and they are often mined using forced labor.
Steiner says blockchain technology in this instance would ensure the authenticity and transparency of a product’s chain of custody and help companies be in compliance with the new law.
Carrier Agnostic, Common Template, Common Architecture
Forward-thinking shippers are finding ways to leverage blockchain to increase profits and strengthen relationships across the supply chain. They’re partnering with forward-thinking service providers who value transparency and innovation, and who understand blockchain’s potential.
In 2016, the world’s largest mining company, BHP Billiton, began using blockchain to record movements of wellbore rock and fluid samples, and better secure the real-time data that is generated during delivery.
The company worked with blockchain startups BlockApps and Consensys to develop these solutions.
BHP Billiton geophysicist R. Tyler Smith told CoinDesk that with blockchain, BHP would share data between the vendor and itself and have a constant understanding of where it is.
“BHP relies on vendors at nearly every stage in the mining process, contracting with geologists and shipping companies to collect samples and conduct analyses that drive business decisions that occur with parties distributed across continents,” said Smith.
Jared is VeriShip’s Chief Operating and Technology Officer.