The transport and logistics sector is becoming increasingly digitised as supply chain management and visibility remain as important as ever, and both are key areas that can be improved by blockchain.
This feature will explore in detail the various use cases that blockchain brings to transport and logistics.
One general benefit that blockchain provides is transparency across supply chains, from production to distribution.
“For consumers, the provenance of goods is becoming increasingly important,” said Jue. “They want to know where the products they choose have come from, and whether they have been produced and transported in ethical and/or environmentally sustainable ways.
“This is where blockchain comes in. Producers can use this affordable technology to address consumers’ requests for transparency, providing comprehensive information on the origin, production methods, supply chain journey and environmental footprint of their products.
“For example, IOHK is currently working with Wyoming-based Beefchain, whose blockchain-based software for supply chain traceability of beef products ‘from ranch to plate’ is the only US Department of Agriculture approved software of its type. Beefchain has worked with IOHK to harness our proprietary blockchain, Cardano, to trace the origin and movement of beef from farm to table.
“Through blockchain, consumers can access significantly more detail than ever before, from where and how a calf was raised – even down to who fed a cow on what day, though to how both the cattle and the beef was transported.”
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“Provenance uses a blockchain to register every step of the production process,” he said. “This ensures that the transfers of ownership are explicitly authorised by their relevant controllers without having to trust the behaviour or competence of an incumbent processor.
“For the different participants in the supply chain, different software solutions exist to access the blockchain, to extract the relevant information for this participant and to confirm the step in the production process. Afterwards, the buyer can scan the product, whether this be via a QR-Code or NFC, and access the information from the blockchain to check every step of the production process.”
Bridging the gap between smaller and larger vendors
In addition, Jue went on to explain how blockchain can level the playing field across sections of food and beverage logistics.
She said: “If we think about the coffee industry, for instance, smaller coffee farmers in countries like Ethiopia may lack the capital to invest in the traceability solutions needed to complete traceability from source to supply. This is not the case for larger coffee producers, who not only have access to more resources, but also to the latest technologies.
“While larger farmers are able to use their access to secure certificates concerning the sustainability, traceability and provenience of their coffee beans, smaller farmers lack access to the technology needed to store these records, but without them multinational companies are unlikely to select them as suppliers. As a result, the space is dominated by a few large suppliers.
“By using blockchain in sectors like coffee and agriculture, all farmers need to access traceability solutions is a basic GPRS-enabled mobile phone, of the type that have been available for 20 years. With one of these, farmers can become part of a global network.
“Blockchain, by enabling them to evidence the transportation and traceability of their products via a phone app, therefore ensures the removal of layers of proverbial middle men. This connects SMBs with major supply chains in a secure, transparent manner that fosters economic growth.”
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Logging and authenticating goods
Blockchain within transport and logistics can also be used to settle agreements between vendors and distributors, without the need for paperwork.
“Blockchain has been used to log and authenticate goods, shipment receipts, and other aspects, which in turn triggers payments,” said Thethi. “If a component has GPS capabilities, location enforcements can be in effect, just as other means of enforcement are possible using various sensors.
“Through the blockchain-based platform, they can access and act upon relevant information. Shippers, freight forwarders, ocean carriers, ports and customs authorities can be future participants.”
For distributors, knowing where their products are at any one time is vital, and this is another area where blockchain can be of assistance.
“Adding location intelligence to blockchain provides numerous benefits for transport and logistics,” said Di Paola. “By layering reliable location data with the intrinsic security of the blockchain distributed ledger function, it provides 100% certainty that an asset is being used at the right place, at the right time, by the right person.
“In the context of a large-scale shipping operation, for instance, there may be thousands of containers filled with millions of packages or assets. Using a system that can track every asset with full certainty, any concerns can be eliminated about whether the items are where they are supposed to be, or if anything is missing.”
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Lastly, blockchain can be utilised within fraud detection practices, with it being able to help distributors determine the legitimacy of delivery details.
“Layering mapping capabilities and rich location data to a blockchain record also enables fraud detection,” continued Di Paola. “Without blockchain, it cannot be certain that the delivery updates provided are in fact accurate.
“Blockchain makes transactions transparent and decentralised, enabling the possibility to automatically verify their accuracy by matching the real location of an item with the location report from a logistics company.
“As every computer in the network has its own copy of the blockchain, this helps to eliminate a single point of failure or fraud.”