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Shipping Giants Employ Blockchain Technology to Manage Supply Chain Logistics

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There’s growing interest in the use of blockchain in the supply chain sector. The secure digital ledger technology can be shared among partners to track cargo, shipments and parcels, ensuring all handling requirements are met.

Two of the largest U.S.-based shipping companies, UPS and FedEx, are making blockchain technology a priority in their efforts to solve supply chain challenges.

UPS Files Patent Application

Earlier this year, UPS filed a U.S. patent application, for which details were just recently made public. It involves a technology that would use blockchain and its shared distributed ledgers to more efficiently track and manage packages shipped worldwide within and outside of its network.

The patent application outlines a need for verifiable shipping and tracking visibility systems for units handled by a single carrier’s network and between multiple carriers when necessary. Using the new technology, shipment units would generate transportation data that is stored on blockchain. This would allow easily sharable tracking data, so that different parties along the supply chain, including handoff of overseas shipments among different providers, could make sure that special handling conditions throughout the journey from seller to buyer were met.

Using a capability called “automated determination,” when a UPS package is scanned at any point, the blockchain system can automatically determine the best or most efficient route by drawing on data from all the connected carriers. The blockchain ledger can also record when the package arrives, allowing the system to rate whether a particular carrier met its service level agreement.

The system could tap into interlocked distributed ledger technology (DLT) networks — the basis of blockchain — and smart contracts to automatically transfer value among multiple parties within the supply chain.

UPS spokesman Kyle Peterson says, “We continuously look for ways to improve the efficiency of our operation. We believe blockchain is a disruptive technology that has potential to change many facets of life and global commerce.”


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Fedex Launches Pilot Project

FedEx also believes the blockchain will be transformative for the industry and has been very active in moving the use of blockchain technology in the supply chain forward.

FedEx has a pilot project under way using blockchain to share shipment information among suppliers, FedEx and retailers, and determine what data needs to be stored in a permanent ledger to ease customer disputes. The company is developing blockchain platforms that would allow customers to more efficiently track packages, not only while they are in FedEx’s possession, but also before and after the company picks them up.

“We have millions of records a day in our system, and we think of blockchain as a secure chain of custody that could transform the logistics industry,” says Dale Chrystie, FedEx Vice President of Strategic Planning and Support. “We believe it holds a lot of promise in that space and would streamline all that data exchange in a very secure way.”

According to Kevin Humphries, Senior Vice President of IT at FedEx Services, FedEx is developing a few pilots to make sure it has an edge in the blockchain technology. Additionally, these programs will help the company grow its knowledge on technology implementation across different platforms and also in understanding its scalability and performance characteristics.

He says one of FedEx’s focuses “has always been to find innovative ways to provide the kind of visibility that our customers need to get all the information up and down the supply chain. And blockchain is opening the door to that by giving customers even more visibility to their package before it gets in our hands and after it leaves our hands.”

Moving Forward

UPS and FedEx are both members of the Blockchain in Trucking Alliance (BiTA), an industry standards council invested in advancing use of the technology in supply chain networks. Blockchain holds significant potential for advancing supply chain logistics, and for disrupting several other industries as well.

Learn more during Advanced Blockchain for Enterprise, a two-day live virtual event taking place December 4-5, 2018. Attendees will gain valuable insight into the future of this innovative technology in the healthcare, energy, supply chain, Internet of Things (IoT) and finance sectors.

Resources

O’Brien, Mike. (10 Jul 2018). FedEx Active in Blockchain Initiatives Tying in Supply Chain. Multichannel Merchant.

O’Brien, Mike. (21 Aug 2018). UPS Looks to Solve Supply Chain Issues with Blockchain Patent. Multichannel Merchant.

De, Nikhilesh. (1 Feb 2018). FedEx Moves Forward With Blockchain Logistics Plans. Coin Desk.

Custodio, Maricel. (1 Feb 2018). Blockchain Trial Started By Shipping Giant FedEx. BlockTribune.

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