By Quinton de Villiers
Blockchain, a digital technology that underpins cryptocurrencies, such as bitcoin, has started making its way into the global transport and logistics industry.
The technology is essentially a large register of transactions that is maintained by a network of computers on the internet.
Users own an updated version of a log which they modify with agreement of the majority of the system.
These systems provide traceability and visibility through a standardised means of sharing data in trusted manner across a large network of participants.
In some instances, these networks include thousands of shippers and carriers operating on land, sea and air, in addition to freight brokers/forwarders, third-party logistics providers, insurance companies, customs agents and end customers.
Certainly, it is impossible to achieve a radical change in the way in which information is managed and recorded overnight, considering the sheer magnitude and complexity of such an undertaking.
However, significant strides have already been made by global corporate giants that point to a radically different approach to supply-chain management in the foreseeable future.
A case in point is the work undertaken by food giants, Walmart, Nestlé, Unilever and Dole, together with IBM, to improve the monitoring of food supply chains using this technology.
This focus starts at the farms and end at the merchants who sell the fresh produce to provide faster and more accurate recalls.
Meanwhile, DeBeers, the world’s largest diamond producer, has developed what is claimed to the first industry-wide blockchain that tracks gems every time that they change hands, again starting at the source – in this instance the mines from they are extracted.
Many technology-based companies have already made a sound start in the race to introduce blockchain-based systems to our industry.
One such technology creates end-to-end visibility on a single platform and spans all shipping modalities.
Notably, it is also able to execute smart contracts between shippers and carriers, using individually encrypted geographic waypoints to enhance transaction time and eliminate broker fees.
Importantly, it also aims to reduce fraud and theft, including so-called “fictitious pick-ups”, where falsified documents are presented by criminals at a dock to collect a shipment.
Cargo-related crime remains a serious concern and the extent of the challenge is difficult to monitor considering that not all companies report all of their theft or losses as it shows weaknesses in their security.
This transparent and accurate means of record-keeping will make it much easier to ascertain whether products are making their way to customers and far more difficult for cargo to go missing while in transit.
Work is also forging ahead on the development of an agnostic platform that uses smart contracts and external sensors to track environmental conditions for pharmaceutical products and to verify the execution of smart contracts.
While the company’s sensor technologies could be used in other industries, it is only focusing on the highly-regulated European Union pharmaceuticals’ sector for now.
Certainly, this is an industry where there has long been a high demand for such technology and earlier this year, DHL and Accenture announced a partnership to also develop a blockchain-based supply chain prototype for the pharmaceutical industry.
This is just one of a number of developments in line with the company’s drive to create more efficient networks” through digitisation, which includes the “serialisation of products that can be tracked through their lifecycle”.
Meanwhile, a Hong Kong-based technology using an Ethreum platform has also been developed that eliminates cargo rollovers and “no shows”.
Shippers and carriers agree to a TEU token deposit that is forfeited if either party does not meet their contractual commitments.
It may just be that we are entering a new era, defined by access to reliable information and greater trust across the entire ecosystem.
Bridgewater Logistics, which has always taken immense pride for being “disrupter”, lauds the industry for role that it is playing in breaking traditional boundaries in its pursuit for excellence!
Quinton de Villiers is the founder and managing director of Bridgewater Logistics with a long and impressive track-record in African logistics and security. Follow Quinton at #InTheFastLane for more insights and expert commentary on African transport and logistics.