New Kids on the Blockchain: Perishables and the need for transparency

Think about the last three seafood dinners you’ve had. Let’s say you ate fresh Coho salmon flown in from the Pacific Northwest, perhaps some tasty red snapper sourced from the Gulf of Mexico and some ahi tuna from Japan.

Chances are, however, that one of those meals was mislabeled, and you actually ate some kind of mystery fish.

Unsettling, isn’t it? But according to a recent study by the nonprofit group Oceana, the above scenario has likely been true for the last decade. About 30 percent of the time, on average, seafood shipped worldwide is mislabeled, the group found. Some popular species of fish, like snapper, perch and grouper, were wrong more than half of the time, Oceana said, with some error rates exceeding 80 percent in certain regions.

While this news may cause some consumers to skip that next California roll at their favorite sushi spot, air logistics companies are equally queasy about the prospect of getting nearly a third of its shipments mixed up due to simple clerical errors arising from a still mostly paper-based system of air waybills (AWBs) that are shuffled by dozens of human handlers.

The answer to this labeling problem, say many logistics experts, is not necessarily IATA’s electronic AWB program, although e-AWBs would certainly offer an improvement. Instead, the go-to solution among many 3PL IT departments has been blockchain technology – a cloud-based system of automatically making a record of every time a shipment changes hands, creating a permanent, un-hackable, shareable history.

Blockchain has been mentioned with eye-rolling regularity at most freight logistics conferences for the last couple of years, but it’s no hollow buzzword – it’s a technology that has paid dividends in banking business and other sectors that rely on anonymity of all parties involved, by providing a decentralized structure and airtight security of sensitive data. In a recent survey by Xeneta, 72 percent of respondents agreed that this technology will be applied to logistics to regulate and simplify administrative work.

Jody Cleworth, CEO of British freight forwarder Marine Transport International Limited (MTI), says the technology lives up to the hype. “Blockchain has the ability to empower our industry into a true digital age,” he said. “The sheer volume of containers processed per year means that safely decentralizing the management of these containers will radically reduce the complexities of shipping.”

The applications of this technology are still in the ideation phase for air cargo, meaning that there are almost no test cases to study for future uses. But a few pilot projects and tests are being conducted among seafreight businesses, including MTI, that could have some profound implications for the airfreight sector – provided they produce the results experts are hoping for.

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