Thursday 22nd Feb 2018 - Logistics Manager

Blockchain needs to be part of your plans

Blockchain is still more talked about than actually used in practice, but momentum is growing as more and more organisations take up the technology.

Malory Davies, Editor.

This week DB Schenker and DP World became the latest industry giants to take up blockchain technology.

A blockchain is a decentralised database of information used to record information across a large number of computers.

Given the impact of recent cyber-attacks, the fact that a blockchain database is both secure and updatable in real time, makes a it serious solution for sharing data across an extended supply chain.

“Blockchain technology opens new possibilities for industry co-operation. Our aim with forming this alliance is to reignite trust in every link in the supply chain and create a more transparent, ethical ecosystem of international trade,” says Pieter Vandevelde of TBSx3, which is providing the technology for the DB Schenker/DP World initiative.

The World Economic Forum has estimated that reducing the barriers within the international supply chain, global trade could increase by 15 per cent.

In January, Maersk revealed that it is joining forces with IBM to launch a company to use blockchain technology to offer a global trade digitisation platform. The two companies started collaborating in June 2016 to build new blockchain- and cloud-based technologies. Since then, multiple parties have piloted the platform including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, US Customs and Border Protection.

In the food sector, Unilever and Sainsbury’s are taking part in a project to trial the concept by using a shared data system for tea farmers in Malawi that supply Unilever and Sainsbury’s. The same system will also track the materials produced for the tea’s packaging, provided by global sustainable wood fibre products company, Sappi.

In the pharmaceutical sector, SophiaTX and parent company Equidato Technologies have joined forces with KITA Logistics to design and develop a logistics blockchain solution that enables multi-party collaboration across value chains.

And in British Columbia, where cannabis will be legalised in July, IBM has suggested that blockchain could be used to enable regulators to capture the history of cannabis through the entire supply chain, ultimately ensuring consumer safety while exerting regulatory control – from seed to sale.

All of this makes it sound as if blockchain is some magical all-purpose panacea, so it is worth pointing to some of concerns that have been voiced.

For example, it is generally agreed that scale is important. Blockchains need a large network of users to give the full benefit in terms of robustness and resilience. And in the early stages of use transaction costs have been significant.

Not only that, blockchain databases are as vulnerable to “garbage-in, garbage-out” issues as any other kind of database.

There is still plenty of work to be done to get the technology in shape for supply chain purposes, but as more and more industry leaders get involved the day comes closer when blockchain becomes a core enabler.