Recently I have started my new business, Dappros, a software consultancy focused on helping enterprises leverage blockchain technology. Blockchain can create added value and enable new ways of doing business in many verticals including finance, healthcare, e-commerce, gaming etc. Looking for first contracts I’ve held a number of conversations with potential customers from all of these verticals but whether by coincidence or not, multiple discussions have pointed to logistics space.
In my company we are also working on internal product, a platform that helps enterprises to track assets using blockchain and IPFS. In software platform business it is important to pick a relevant niche or vertical in order to build up domain expertise and use cases which helps make your product and services more relevant to the customers.
Hence my desire to look a bit closer into current state of the market around initiatives and applications of blockchain in logistics.
I was expecting a few ICO-funded startups and a small number of industry led activities, but after initial research it is clear that dozens of players in logistics space have kicked off 2018 in anger, launching at least over 20 partnerships and initiatives.
Perhaps this isn’t a coincidence as blockchain technology is a natural fit for logistics applications as it enables immutable tracking, reduces friction and paperwork, enables better deal-making and insurance contracting leading to numerous short-term and long-term benefits.
Anyway I outline the current state of the market below along with some comments from my own and links to relevant websites. I hope this will be of use for anyone researching this topic and I’m going to come back to this post later to compare notes and track progress of these initiatives.
First I would like to kick off with the report from DHL and Accenture which is highly recommended. It’s titled “Blockchain in Logistics. Perspectives on the upcoming impact of blockchain technology and use cases for the logistics industry”. Download PDF here. The publication starts with introduction into blockchain and examples of its use across industries. Alternatively you could jump straight to logistics use cases from page 12. After reading the facts and examples provided it is clear why blockchain makes so much sense in logistics. Report explains what successful application are and what is being currently done in the space. It is fascinating how much impact technology can have onto global economy:
Achieving new efficiencies in trade logistics is likely to have significant impact on the global economy. According to one estimate from the World Economic Forum, reducing supply chain barriers to trade could increase global gross domestic product (GDP) by nearly 5% and global trade by 15%. — Blockchain in Logistics report by DHL
Importantly, DHL report outlines success factors that contribute to organisations’ willingness to form partnerships, alliances and consortiums around blockchain in logistics, which explains somewhat surprising abundance of activity I’ve discovered when researching this area.
Global alliances and initiatives
In this section I include groups and alliances that are open for joining.
BiTA is being mentioned quite a lot especially in US, with numerous large players in logistics sector having joined the alliance according to press releases. According to https://www.winnesota.com/blockchain,
[BiTA members] account for about 85% of all truck-related transactions in the U.S. With nearly 1,400 pending applications as of February 2018, this number is sure to grow.
Upon subscription to BiTA newsletter it currently redirects to https://www.transrisk.com/ a website that does not open for me at the moment. According to Linkedin page however TransRisk “address one of the most significant problems in the $726B trucking and logistics industry today — price transparency and discovery” so it seems logical that TransRisk / FreightWaves it is the founder organisation behind BiTA. Both are based in Chattanooga, TN.
BiTA invites members from logistics industry, technology vendors, startups and academy to apply for membership.
Automakers such as BMW, Ford, General Motors, Renault, alongside with partners from the blockchain and other industries launched the Mobility Open Blockchain Initiative (MOBI), which aims to explore blockchain in order to make transportation safer, more affordable, and more widely accessible — Cryptonews
As explained in news coverage and at MOBI website itself, the initiative is a non-profit organisation that aims to make mobility “more efficient, affordable, greener, safer, and less congested” through the use of blockchain and distributed ledger technologies.
There is currently a “get in touch” form at MOBI website that allows organisations to contact MOBI to join the initiative.
Platforms and protocols
This sections lists blockchain platforms and protocols that are targeting logistics.
#1, Fr8 (U.S.), founded: May 2017
Fr8, reading as “freight” puts the problem and solution this way:
THE GLOBAL LOGISTICS PROBLEM
Valuable cargo races through a global network of antiquated and disconnected systems.
OUR SOLUTION — THE FR8 PROTOCOL
All shipments share common components throughout their lifecycle. The Fr8 Protocol is designed around these core requirements, meant to cover any shipments specific needs.
Platform website, Fr8.network goes on to explain the protocol stack architecture, showcases the team and partnerships. Both seem very solid with partnerships including numerous Fortune 500 companies involved with global shipping as well as important ecosystem technology players such as OpenPort, CargoChief, Ecogistix, Cargomatic and Roambee.
18 employees on Linkedin currently. It seems the team is planning to launch an ICO in September 2018. They run a public Telegram group which seems quite lively at the moment. 9,796 members as of now:
Interestingly there is another company called fr8 which also provides technology for logistics industry. It is India-based and targets Asia-Pacific region. I have not found any reference to blockchain at their website.
#2, VeChain (Singapore), founded: 2017
VeChain claims to be the following:
VeChain aims to connect blockchain technology to the real world by providing a comprehensive governance structure, a robust economic model as well as advanced IoT integration, and pioneers in real world applications.
and is not strictly speaking a logistics platform, however according to CoinTelegraph article of June 12th 2018:
The Vechain Foundation claims that the DApp is the first ever implementation of blockchain for supplier management purposes:
“In the future, the system and its related applications can potentially evolve into a platform [that is] widely shared and co-constructed by a broad range of logistics service providers.”
I enjoyed the futuristic video VeChain has put on their homepage. The platform is live. VeChain also has an active Telegram channel but from what I saw in latest discussion in their English-speaking channel it seems to be mainly populated by traders, perhaps because it’s at post ICO stage. 28,996 members as of now.
Currently VeChain seems to be mainly Asia focused and they have launched a partnership with DB Schenker, the transport and logistics division of Deutsche Bahn targeting China’s logistics industry. 76 employees on Linkedin.
#3, ShipChain (U.S., Los Angeles), founded: May, 2017
ShipChain is another platform that focuses on solving current problems and disrupting the logistics industry.
The ShipChain’s “Old way vs New way” infographics is a great summary of current problems in logistics and how blockchain can solve them, it is worth a look:
ShipChain doesn’t hide behind marketing text and carries on explaining in plain English how their platform is built — it uses Ethereum blockchain and a sidechain to track encrypted geographical waypoints. Interpretation is only accessible to parties involved in the shipment.
ShipChain also provides roadmap until Q1 2020 which includes some ambitious plans such as acquiring a small carrier “for internal testing”, sponsorship of community open-source projects and establishment of relations with government regulators.
Also lively Telegram channel here, 26,786 members as of now. 30 employees on Linkedin.
#4 CargoX (Slovenia), founded: 2017
CargoX is a Europe based player which came up in my research as they have announced a partnership with European logistics leader Milsped Group of Serbia. Also announced are partnerships with OceanX and Fracht AG.
CargoX provides a blockchain-based “Bill of Lading” solution which essentially is an inventory list or a receipt for cargo received for shipment. They are a member of BiTA alliance.
According to CrunchBase, CargoX has raised $7m in funding through ICO. Their token, CXO, has a market cap at $4.9m, down from $16.9m post ICO in February 2018 but this seems to be a common trend among early stage post-ICO businesses these days:
Time and market validation might improve situation for CargoX token in future, and it seems their team is working towards this goal.
13 employees on Linkedin. CargoX Telegram channel — 5,459 members.
Announcements and launches
In this section I provide a list of ‘partnerships’ and similar announcements that are worth mentioning in blockchain logistics space. Typically this involves a well-known FTSE500 company and sometimes a less known blockchain technology platform or systems integrator.
Same as with two sections above, these come in no particular order.
1. Maersk-IBM partnership (blockchain in cargo delivery)
Maersk Line, the world’s largest container-shipping company, has already teamed up with IBM to apply blockchain to track its cargo shipments in order to reduce the mountains of paperwork associated with each shipment.
Note that article above talks about UPS announcing its move into blockchain and joining BiTA but I’ve not found what specifically UPS is doing with blockchain so we’ll keep an eye on updates from them for future reports.
IBM and Maersk have already carried out a test case using a batch of avocados shipped from Mombasa to Rotterdam. The calculated costs of the shipping container itself is more than $2,000. The cost of associated paperwork comes to $300–15% — 20% of total costs. These costs can be reduced to zero by distributed ledger technology. The final savings for the industry are calculated with due regard to the fact that annual global traffic is about 70 million containers.
2. Walmart — IBM partnership (blockchain food tracking from supplier to shelf)
Walmart has partnered with IBM to work on the Hyperledger Fabric blockchain, for example, to track food staples from supplier to shelf.
3. Accenture — DHL partnership (blockchain in pharmeceutical supply chains)
In March 2018 Accenture linked up with global logistics operator DHL to work on a blockchain implementation for pharmaceutical supply chains.
I have already mentioned the DHL report above, prepared in cooperation with Accenture. It seems they have established a strong partnership and are strongly bidding on blockchain tech.
4. Lufthansa — Blockchain for Aviation initiative
Lufthansa Industry Solutions has launched the initiative Blockchain for Aviation (BC4A). The goal is to bring together all fields of expertise and to collectively sound out the potentials of blockchain technology. Potential participants include, for instance, software developers, aircraft manufacturers, MRO service providers, logistics providers, lessors and regulators.
It is my opinion that immutable blockchain tracking should be compulsory in such industries as aviation, spacecraft and medical machinery. Everything that has to do with human lives and/or expensive equipment. We are also getting clear signals from the industry this is a welcome innovation on their side. Aviation, for instance, will strongly benefit from blockchain powered aircraft parts tracking, both during shipping and during service.
5. Mobility Open Blockchain Initiative (MOBI)
[..] automakers such as BMW, Ford, General Motors, Renault, alongside with partners from the blockchain and other industries launched the Mobility Open Blockchain Initiative (MOBI), which aims to explore blockchain in order to make transportation safer, more affordable, and more widely accessible.
I’ve mentioned MOBI above.
6. CargoX — Milsped Group, blockchain for transmission of trade documents
the independent developer of a blockchain-based Smart Bill of Lading platform that offers low-cost, safe and reliable transmission of value-carrying trade documents, has partnered with European logistics leader Milsped Group of Serbia, to jointly test and evaluate CargoX’s blockchain-based Smart B/L solution.
CargoX and their Bill of Landing solution also mentioned in the platforms above.
7. Port of Rotterdam — CargoLedger, blockchain for cargo tracking
The blockchain system will record and process data from labeled shiploads, which can be scanned by receivers in Rotterdam’s ports in order to gain immediate insight into the conditions of the load, such as its temperature and humidity.
8. Deutsche Bahn — VeChain
Deutsche Bahn’s global transport and logistics division revealed it was partnering with blockchain startup VeChain (VEN) on a decentralized application (DApp), which can be used to score third-party logistics partners based on an evaluation of services such as packaging, transportation, and the quality of goods.
See VeChain platform description above in the Platforms section.
9. Transport Ministry of Malta — Omnitude
The Transport Minister of Malta has announced a partnership with UK middleware blockchain startup Omnitude to improve the Maltese Public Transport Service
10. Finland government — Esentia.One
This time around, Esentia.One is working with ‘Traffic Lab’, a government organization that securely logs information associated with end-to-end deliveries. The plan is to build a system in which the information, which would include delivery contents and contact information, is easily accessible by permitted parties.
11. Scandinavian Logistics Partners AB — Enigio
Scandinavian Logistics Partners and Enigio have signed a cooperation agreement to develop blockchain solutions for logistics.
12. Denmark — EU blockchain logistics partnership
The union will include giant logistic companies such as FedEx, Uber Freight, and Bridgestone. All will be utilizing the blockchain technology to register ships in the national registry and to allow secure storage of importing data.
13. ShipChain — CaseStack
The pilot program will integrate tracking and tracing on ShipChain’s blockchain based platform.
See ShipChain covered above in Platforms section.
14. Hortonworks — Trimble
Together with Trimble’s new blockchain network, Hortonworks DataFlow (HDF) and Hortonworks Data Platform (HDP) have enabled Trimble’s customers to increase efficiency by modernizing transportation industry systems
15. PNP Logistics Network — Blue Whale foundation
Some of the problems that the duo plan on tackling includes increased costs, the lack of an efficient system, failure to incorporate technological advancements into delivery procedures and most importantly, working towards reducing missed parcel deliveries.
16. OpenPort, Canoe Mining and Heawyweight Group
As of now, the partnership’s goal is to provide an integrated system that can manage the logistics chain from top to bottom with traceability and verification in mind. The partnership intends to focus on two major verticals, fast-moving consumer goods and mining.
17. DB Schenker — VeChain
This solution tracks their third-party logistics partners performance, on top of other supply chain offerings. The partnership involves the development of a supplier evaluation system on the VeChain platform.
(ShipChain is also described in Platforms section).
18. Tencent — China Federation of Logistics & Purchasing
The two parties will collaborate to build a blockchain electronic record platform, a transportation management system and warehouse management system, a temperature controlled pharmaceutical logistics tracing platform, a logistics and procurement financing platform, and a logistics insurance platform.
19. One Network — Imperial Logistics, blockchain in medical supply chain
By managing the entire medical supplies distribution process, One Network’s Real Time Value Network (RTVN) serializes, tracks, and authenticates drugs, safeguarding the medication’s distribution
20. Bank of America Merrill Lynch (BofAML), HSBC, and the Infocomm Development Authority of Singapore — blockchain powered Letter of Credit
Bank of America Merrill Lynch (BofAML), HSBC, and the Infocomm Development Authority of Singapore (iDA) recently announced that they have jointly developed “a prototype solution built on Blockchain technology that could change the way businesses around the world trade with each other.”
21. MOOG — ST Aerospace — NCMS — Microsoft — Siemens
Moog Inc. and NCMS have signed an 18 month contract to perform co-funded work in support of applying Moog’s VeriPart™ solution, adapting blockchain technology for additive manufacturing. This agreement will allow Moog’s VeriPart™ solution to be demonstrated via Microsoft Azure Blockchain. NCMS will provide project and contract management while leveraging this project to enhance Department of Defense’s (DoD) knowledge of blockchain technology. The project will allow DoD to evaluate blockchain adaptability to additive manufacturing and digital data supply chain processes for mission critical and obsolete parts in a secure environment. The full collaborating team is comprised of NCMS, Moog, Inc., Microsoft, Guardtime Federal, Identify3D and Siemens Product Lifecycle Management Software, Inc.
Sources: https://www.3ders.org/articles/20180503-moog-teams-with-st-aerospace-ncms-to-create-blockchain-based-veripart-for-3d-printed-parts-tracking.html and http://www.moog.com/news/operating-group-news/2018-2017/ewrfwerwe.html
I was pleasantly surprised with the results of this research. Blockchain for logistics is booming, at least in terms of investment, discussion and partnerships being announced.
Upon deeper immersion into subject however this is no random coincidence. Logistics is a lifeblood of modern economy while blockchain technology provides the missing pieces making it a perfect match.
Personally after diving into this topic I am energised and determined to keep focusing on logistics vertical. There are a lot of solutions being developed. Surely there is going to be fragmentation, confusion and loss of interest. Many of initiatives and integrations won’t achieve much post initial PR buzz. They might end up integrating some superficial blockchain ‘tracking’ solution without going the last mile and delivering real value to stakeholders. This is fine and to be expected. In any case there is going to be a huge demand for professional solutions architecture and systems integration in this area. In a while, production tested platforms and technologies will emerge that are going to upgrade the economy globally. We are going to be a part of this transformational change.
P.S. It is granted that the list of platforms and initiatives provided here is not exhaustive. Please do suggest anything worth mentioning in the comments section below. I welcome any of your comments and feedback. Thank you for reading!