Shippers are increasingly pulling their logistics providers into blockchain as they employ the technology to form networks with business partners and tech providers.
Walmart is very much in the vanguard, having set up a blockchain-based freight and payment network in Canada and about to launch a pharmaceutical utility network.
According to Walmart and technology provider DLT Labs, the network is the largest “full production blockchain solution for any industrial application” on the planet.
It tracks deliveries, verifies transactions and automates payments and reconciliation between the retailer and the truckers hauling inventory, to more than 400 retail locations across Canada. All data are integrated and synchronised in real time on a shared ledger, which participants access through a web portal and a mobile application interface.
The system, which integrates seamlessly with their respective legacy systems, performs all the calculations for real-time invoicing, payments and settlement.
John Beyliss, senior vice-president, logistics & supply chain of Walmart Canada, said the network, which covers over half a million loads a year, brings “extensive cost savings”, expedites payments, eliminates disputes and allows for better budgeting and planning.
The retail giant, together with IBM, KPMG and Merck, recently completed a pilot project, overseen by the US Food & Drug Administration, and is now preparing for the launch of the Pharmaceutical Utility Network.
This uses blockchain technology to store pharmaceutical product profiles and trace them at the serialised unit level.
The project was run in preparation for the Drug Chain Security Act legislation, which is due to become law in 2024 and requires supply chain stakeholders to digitally track and trace certain prescription drugs.
Rob Carter, executive vice-president FedEx Information Services, expects blockchain to gain traction in supply chains. The ability to extend visibility all the way along the supply chain has huge promise for the food industry, he believes, allowing farmers to certify their product and consumers to check for aspects like meat produced from free range, hormone-free-fed animals.
In November, UPS delivered blockchain-verified beef from a US farm to Japan in collaboration with agri-tech solutions provider HerdX. The integrator created a visibility tool that could plug into HerdX’s blockchain technology to provide live updates along the journey.
According to Forrester Research, companies have begun to advance in the blockchain trials from “speculative proofs of concept” to pragmatic approaches that represent “serious enterprise endeavours”.
Market intelligence firm International Data Corporation predicts that, by 2023, 85% of global container shipping will be tracked by blockchain.
Other pundits are less exuberant, however. Supply chain and logistics analysts at ARC Advisory Group agree the technology offers promise for supply chains, particularly for pharmaceuticals and the food and beverage sector, but at this point they rate blockchain as hype, rather than a hot technology that is gaining traction.
They noted that many fledgling providers of blockchain solutions have disappeared within a year, and those that are around rarely can identify clients that are using their technology on a daily basis as part of a new way of doing business.
In some cases, this latter shortcoming might be the result of a lopsided approach. Gartner recently warned that 80% of blockchain initiatives in the supply chain would still be stuck at the proof-of-concept or pilot stage by this year. Rather than try to use blockchain to address issues, many projects start with the technology looking for solutions, it diagnosed.