When firms across the globe first starting hearing about blockchain technology for integration with logistics systems, the association was with bitcoin – as a payment processor, rather than the underlying disruptive technology that could reduce costs and complexity for carriers. Once the education piece had been completed with stakeholders, it was quickly understood how logistics firms could leverage blockchain to their advantage.
There was a fantastic article from the NYT published back in March, that effectively boils down as to why blockchain can have such an impact in logistics:
At its heart, blockchain simply refers to a bookkeeping method that “chains” together entries so that they are very difficult to modify later. It provides a way for large groups of unrelated companies to jointly keep a secure and reliable record of their transactions.
Nathaniel Popper and Steve Lohr, the author of the article gives the example that a single container being shipped could require approvals and stamps from up to 30 people or authorities. These could include tax revenue authorities, national shipping and public health bodies.
We know Disney first started exploring blockchain back in 2014, and so did IBM with their Blue Coin project, that eventually become Openchain. The director of research at IBM Arvind Krishna openly admits it took him a fair bit of convincing to even properly look at the technology.
“That was the ‘aha’ for me,” Mr. Krishna said. “This was not really about digital payments, but establishing trust in transactions in general.” He called it “a technology that can change the world.”
We know now firms across the globe are heavily exploring blockchain, and IBM alone has 650 employee working on it, and they have 400 clients testing their products – one of those being Walmart. One of the largest providers of enterprise software SAP, has launched its Leonardo project to utilise blockchain, and set in it three key use cases on which to focus its efforts on. SAP asset intelligence, SAP distrusted manufacturing and SAP transportation management.
SAP is also a member of the Blockchain in Transport Alliance, who’s mission is to engage in education the transport industry, to bring about extracting the full potential of benefits that blockchain technology promises. Some of the key members of this alliance include UPS, McLeod software, FedEx, Penske, TMW systems, Convoy, and Bridgestone. Clearly, we can see large, multinational companies are taking blockchain seriously and developing systems. What will be covered now are those smaller firms based in crypto that have raised funds via ICOs, who can help to facilitate those companies seeking to integrate blockchain with their logistics systems.
VeChain has recently come to the attention of many as they have started being a bit more public with announcements, but it’s actually a bit of a slow burning project. The VeChain tech was designed back in the second quarter of 2015, and since then the team have built upon several smart contract templates, and their own custom hardware.
VeChain has developed a powerful blockchain-enabled enterprise software platform. The VeChain platform enables manufacturers to assign products with unique identities, which then allow manufacturers, supply chain partners and even consumers to interact with the product through the platform. It uses blockchain technology to ensure the security of the data collected, allocating private keys to all participants within the supply chain.
These IDs are stored on the blockchain, and physically put on the product with a NFC chip, QR code, or like WTC/Modum – a RFID tag. During further manufacturing of the unfinished product, or shipping with a carrier, or arriving at a retail location the ID can be interacted with and data updated on the blockchain.
One of China’s largest importer of fine wines (Direct Imported Goods) have already placed one million bottles of wine on VeChain’s platform in an effort to counter the import of fake wine. This could further be applied to other luxury or high spec goods that are often counterfeited.
In an important step for the company, VeChain recently became the first firm to pass PriceWaterhouseCooper’s Cryptocurrency Disaster Recovery Plan–
VeChain spearheaded the first Cryptocurrency Disaster Recovery Plan (CDRP) that meets the demands of accredited firms and approved by PwC. This is the first of its kind in the world and sets a standard for corporate level DRP and risk management of internal or external controls on blockchain solution and cryptocurrency assets both on digital and physical wallets.
While this fantastic press, it’s important to note VeChain were part of PwC’s incubation program back in May 2017, and have had their resources and research at their disposal. It’s pretty easy to pass a set of standards with a firm you have been working with for close to a year. Jay Zhang, the finance director for VeChain was also a senior manager at PwC. According to their ideas of development VeChain have also been working with PwC and the Liaoning Academy of Agricultural Sciences to develop a blockchain cloud project that is for the verification of organic agricultural projects. While I can appreciate the plan, it’s pretty easy to create positive press with this kind of clearly long term partnership.
Imagine a fully integrated system across the entire supply chain–from the moment it leaves the factory, field, or farm–to delivering the finished product to the customer’s doorstep; federated in trustless, transparent blockchain contracts.
Shipchain seeks to utilise the Ethereum blockchain, using a side-chain to track geographic waypoints across smart contracts. These waypoints will be encrypted so only involved parties can access the data, but still retaining the benefits of an immutable blockchain. This allows better communication across the supply chain for customers, carriers and creators.
As detailed in the whitepaper, Shipchain is looking to address the following issues in the shipping market:
- Bad tracking for end users
- Lack of transparency
- Poor accountability across the supply chain
- Freight broker markup
- Misaligned incentives, especially for carriers at the tail end of the chain.
The team is led by CEO John Monarch, the founder of Direct Outbound, which is currently one of the fastest growing 3PL companies in the US. Roger Crook the Global Head of Sales and e-Commerce at DHL Global Forwarding takes the Chief Strategy Office role. One of the more noted advisers is Al Pettenato, a former VP of XPO logistics and Senior VP of North America for DHL. A fairly strong team looking at the experience listed.
The ownership of the $SHIP token will bestow membership to the token holder, and will grant access to the blockchain for booking freight and tracking shipments. These transactions on the blockchain for shipments will be paid, and settled in tokens, giving a high utility factor to the token. Interestingly, there is also an incentive for the carriers at the end of the supply chain –
Tokens valued at up to 20% of each freight transaction will be given to the driver/carrier as “gamified” incentives for safe and timely deliveries, as well as environment focused such as reduced idle time. From there, drivers will either be able to sell their tokens on exchanges, or redeem those tokens via partnerships ShipChain will form for various rewards, such as gift cards, fuel discounts, and more. Q2 2018 will see the first integration with government-mandated ELD devices.
The Shipchain ICO has closed, but an airdrop is currently available at time of publish to members of their telegram group, link is here to their official site. Please check URLs, and remember to never give out your private key in case the site is compromised.
Previously two in depth articles have been published regarding this niche blockchain project seated in logistics:
Simply, Modum is a supply-chain monitor for the pharmaceutical sector, that ensures shipments are meeting temperature requirements to comply with EU law. It can impassively reduce cost per shipment for hauliers and ensures transparency/audit compliance by keeping the data from its sensors on the blockchain.
Ambrosus looks like the most direct competitor to $MOD, focusing on food and medicinal shipments. There so far has been no showcase of any sensor equipment, but according to some of their updates they also have a focus on data silos and management to speed up compliance and process analysis. In practical terms, they do seem a way behind modum with no evidence of pilots or partnerships going live, while Modum has their fourth pilot going live with their proprietary technology, and 10,000 sensors hitting mass production in Q1.
According to the Ambrosus roadmap, they are planning on releasing the full API set and dev tools in March 2018, then in June 2018 releasing the sensors for Ambrosus. According to one of the content managers Aneesh, the team are:
In the process of patenting and protecting many of the sensor technologies and the smart packaging and product capsules.
In the Food Sensors and Tracers PDF published on their site, it seems Ambrosus will first start with traditional sensors, then move forward in developing new sensors that can allow assessments of various analytes in gases, liquid and solids, including 02 and C02 levels, glucose, ammonia.
Ambrosus combines the innovations and inherent strengths of the hardware and the software parts that it is a disruptive solution. Naturally, as with every breakthrough, stakeholders also need to have a multidisciplinary comprehension to accept Ambrosus. Therefore, the design of the hardware part will be carried out incrementally. There is more than one solution to a specific case. We can start with already in-place sensors, then propose new monitoring systems, and finally fully embrace the digitalization concept by entirely redesigning the system into one using modern food tracers and biosensors.
While Modum fulfils a niche, clearly Ambrosus is looking to disrupt the whole chain of integrity across logistics. Another key differentiation from Modum is the possibility of decentralising by going down the masternode route, although not confirmed yet, is an option the CEO Angel Versetti confirmed on Reddit the team were considering.
Waltonchain is another RFID-based solution, and recently Boxmining visted Waltonchain’s reserach center in Xiamen to have a look at their product demo. Like Modum and Ambrosus, they are seeking to incorporating tracking of physical goods into the blockchain, and thus preventing counterfeiting an loss of assets during transit. WTC will have the ability to write information from RFID straight to the blockchain without any need for an API interface, as WTC holds a patent which integrates memory with RFID.
WTC also has some different token mechanics, as it has the possibility of becoming a masternode if holding 5K+ tokens. This feature coming online in Q1, possibly just after mainnet comes online and the token-swap and genesis block have been completed.
Waltonchain, out of all the ICOs in the past two years have probably the most amount of partnerships that are currently not under an NDA. An incredibly comprehensive list has been put together, and is well worth the read. A few of the highlights include:
- The Jinhu Provincial Government have contracted WTC to build a monitoring and smart air purification system connected via IoT.
- Chinese fashion house SMEN have completed a pilot RFID project with WTC.
- Direct Delivery have a partnership with Waltonchain to create automated retail stores, much like Amazon have recently opened in Seattle.
Note that many of these projects are not just limited to logistics, which could either showcase the versatility of blockchain and WTC, or could be a concern the company is overstretching itself.
Full article is linked below, but SophiaTX seeks to disrupt SAP-using businesses by integrating blockchain to increase inefficiencies between firms. They have recently signed a joint letter of interest with a Riydh based logisitics company that each year handles more than 2 million tons of cargo.
As always, do your own research, this is not financial advice.