Executive Briefings

Opinion: There's Too Much Hype Surrounding Blockchain in the Supply Chain

In logistics, the best known blockchain pilot program involved Maersk and IBM. It centered on creating a digital distributed ledger to create a single electronic place where all the myriad documents related to a shipment could be housed.

Blockchain is the technology behind Bitcoin and other crypto currencies; it's a protocol for a digital ledger that enables proof of ownership and the transfer of ownership from one entity to another without using a trusted third party intermediary (like a bank). The value that is transferred can also move through an extended supply chain while ensuring that what occurs at each point in the chain can be chronologically recorded.

In one projected pilot by a company called T-Mining, the blockchain will give clearance for personnel — like a truck driver — to pick up a load. One of the key advantages of blockchain is that it is much, much more secure than traditional IT solutions. A relatively recent trend in logistics is fictitious pickups. These occur when con artists show up at a shipper’s dock, provide fabricated insurance documents, DOT numbers for trucks, and pickup documentation. It is argued that blockchain could help prevent these kinds of thefts.

On organization called Kouvala Innovation has an even more audacious vision. Pallets with RFID tags would communicate their need to get from point A to point B by a certain date. Carrier “mining” applications would bid for the right to move that load. The RFID tag would award the business to the carrier that bests meets a shipper’s price and service needs. Then as the move progresses, the blockchain would continue to track the shipment.

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Blockchain is the technology behind Bitcoin and other crypto currencies; it's a protocol for a digital ledger that enables proof of ownership and the transfer of ownership from one entity to another without using a trusted third party intermediary (like a bank). The value that is transferred can also move through an extended supply chain while ensuring that what occurs at each point in the chain can be chronologically recorded.

In one projected pilot by a company called T-Mining, the blockchain will give clearance for personnel — like a truck driver — to pick up a load. One of the key advantages of blockchain is that it is much, much more secure than traditional IT solutions. A relatively recent trend in logistics is fictitious pickups. These occur when con artists show up at a shipper’s dock, provide fabricated insurance documents, DOT numbers for trucks, and pickup documentation. It is argued that blockchain could help prevent these kinds of thefts.

On organization called Kouvala Innovation has an even more audacious vision. Pallets with RFID tags would communicate their need to get from point A to point B by a certain date. Carrier “mining” applications would bid for the right to move that load. The RFID tag would award the business to the carrier that bests meets a shipper’s price and service needs. Then as the move progresses, the blockchain would continue to track the shipment.

Read Full Article