5 ways blockchain can be used to enhance the supply chain

Born from the obscure “bitcoin” universe as a foolproof method to keep track of transactions, and now gaining popularity in the banking and finance world, blockchain is emerging in the logistics arena. This once-little-known technology may be a potential solution to the problem of providing transparency in the supply chain while still keeping shippers’ and forwarders’ proprietary information private.

In a nutshell, blockchain automatically makes a record of every time a shipment changes hands, creating a permanent, un-hackable history that would be visible to everyone. This reduces inefficiencies, such as time delays, costs, redundant paperwork and human error that can slow down a shipment. At a glance, blockchain would allow a shipper to track the entire trajectory of a container or package, while it also keep track of vital information such as temperature deviation and shock.

In a recent survey by Xeneta, 72 percent of supply chain professions said that blockchain will eventually be applied to logistics to regulate and simplify administrative work. But here are a few uses that are taking place in logistics right now that are already making a difference to the bottom line:

POLB_Containers-crop1) Verified gross mass – A U.K.-based freight forwarder called Marine Transport International (MTI) was one of the first logistics companies to deploy blockchain as a way to track the movement of shipping containers. While this is strictly a maritime use, the same principle can be applied to ULDs in the air cargo world as well.  Since last year, MTI has been using the TrustMe public blockchain technology, along with predictive analytics tools from Black Swan Data Limited, to record the verified gross mass (VGM) of each container. “Instead of a VGM message being delivered sequentially to parties within the supply chain, our platform can provide a decentralized approach to delivering VGM messages,” said Jody Cleworth, CEO of MTI. “The sheer volume of containers processed per year means that safely decentralizing the management of these containers will radically reduce the complexities of shipping. A grass roots approach in collecting and storing information on the Blockchain is how shippers will be able to reap the full benefits of the technology.”

Gatechain2) Trade finance – During IATA’s last World Cargo Symposium in Abu Dhabi, a Zurich-based startup called Gatechain was one of the runners-up in the Air Cargo Innovation Awards program. Gatechain uses blockchain technology for trade finance, allowing for the reduction of processing time and the lowering of costs while improving cash-flow in trade, the company said. “Paper is still used as the main means to transport information and ownership across business processes,” read Gatechain’s summary statement. “Current initiatives do not tie into the processes of the airfreight customers, that simply want to buy and sell goods, get financing and transport the cargo. By using blockchain technology, the two separate streams – finance and goods – can be connected and make the transactions agile and transparent.” Gatechain, the company said, is the “first step into enabling incremental business processes across the whole supply chain.”

3) Pharma procurement — One of the pioneers in computing, IBM, is once again on the cutting edge of logistics innovation since it launched a blockchain-based financial services platform for pharmaceutical procurement, which the company said will increase efficiency, transparency and operation of supply-chain finance. Developed in conjunction with Chinese supply chain firm Hejia, pharmaceutical retailer, a hospital and a bank, the Yijian Blockchain Technology Application System will be expanded to include multiple pharmaceutical retailers, hospitals and banks later this year. Shen Xiaowei, director of IBM research in China, explained that, “blockchain can fundamentally transform businesses by eliminating inefficiencies, speeding up transactions and enabling innovative new business models,” especially in airfreight, were many companies still use paper to record shipments and transactions.

container_ship_emma_maersk_with_destination_port_of_hamburg4) Container track and trace – In another application of IBM knowledge that has implications for the airfreight business, seafreight giant Maersk recently joined forces with Chinese e-commerce conglomerate Alibaba and IBM to introduce blocktrain technology that links shippers, freight forwarders and carriers with ports and customs authorities. Based on the Hyperledger Fabric, and built by IBM and Maersk, the platform digitizes the formerly paper-based supply chain process from end-to-end for millions of ocean containers while providing secure sharing of information among key stakeholders in each shipment. Maersk said the technology has the potential to save billions of dollars in shipping costs and make corss-border trade more accessible to business in the developing world.

fruit5) Perishables safety – Since the fall of 2016, one of the largest retailers of edible perishables, Walmart, has been operating a pilot blockchain project to monitor the freshness of its produce, which feeds about 260 million customers each week, according to Bloomberg Technology. Blockchain can instantly identify older shipments and make it easier to pull food off store shelves before it goes bad. Also, if a customer is sickened by spoiled food, the perfect records maintained in the blockchain can instantly narrow down the source of the expired product – a formerly painstaking process that used to take days. So far, Walmart said it has used blockchain for tracking thousands of packages containing just two products – an undisclosed “packaged produce item” in the United States, and fresh pork in China – but eventually plans to expand the program.

4 - Readers Like This Post
Current Issue Magazine Cover
Sign Up Email List