What Walmart’s blockchain mandate could mean for trucking
Logistics providers told to get up to speed by September 2019.
Late last month, Walmart made an announcement that stands to move much-discussed (but not-always-understood) blockchain technology from an intriguing concept to a market reality.
On the heels of a spring E.Coli outbreak that sickened some 200 people before it was traced back to lettuce sold at Walmart, the retail giant — along with nine other food industry heavyweights, including Unilever, Nestle and Dole — announced a tech partnership with IBM to add new layers of verification to its food supply chain.
The takeaway for truckers who help deliver the millions of pounds of produce sold by Walmart each year: starting next September, submitting information to a new IBM Food Trust network built on blockchain will be mandatory for logistics companies that work with suppliers of lettuce, spinach and other leafy greens, according to a company letter released Sept. 24.
Though logistics executives have speculated in recent months about the role blockchain could someday play in the trucking industry, the conversation about how exactly to implement distributed ledger systems pioneered in the cryptocurrency world has remained largely abstract.
Now, the mandate under the “Walmart Food Traceability Initiative” to input detailed data as produce moves through the supply chain — creating an open-source record unable to be edited retroactively — could provide a larger-scale commercial test for blockchain in logistics.
“The food system is absolutely too large for any single entity,” explained Frank Yiannas, VP of food safety at Walmart, in a video posted to the company’s YouTube page. “In the future, using the technology we’re requiring, a customer could potentially scan a bag of salad and know with certainty where it came from.”
For leafy greens, the idea is that blockchain will allow farmers, processors, shippers and other custodians along the supply chain to input detailed information about variables including growing conditions, expiration dates and shipping schedules. Once that data is entered, a core principle of blockchain is that it is open for other relevant parties to access but blocked from making changes after the fact, theoretically allowing for quicker and more accurate pinpointing of problems that may arise en route to consumers.
Key to this concept is the much broader trend toward digitized supply chains. Tech giants like Intel and HP are also investing in supply chain technologies built in the “Internet of Things” mold of online-enabled sensors and other hardware. When it comes to day-to-day logistics tech tools, Vector’s LoadDocs app is a prime example of how truck drivers’ smartphones can be harnessed to scan and electronically send load delivery paperwork, expediting billing.
Still, Walmart’s blockchain bet also raises big questions that could help determine whether the technology will be destined for mass adoption.
Seeking Standards
Walmart isn’t alone in its quest to use blockchain to augment safety, transparency and efficiency. Governments, banks and hospitals are all among the early movers testing distributed systems to track their most important data.
In the meantime, however, no one-size-fits-all technology exists for blockchain, let alone a set of agreed-upon standards for how encrypted systems should work and who might ultimately be tasked with safeguarding them.
Walmart has said that farmers will “use a handheld system to capture product information that is digitized, and add it to the blockchain network.” The idea, industry publication Drug Store News reports, is to replace traditional paper logs employed by many farms, packing houses and warehouses to track production details and expedite supply chain troubleshooting.
“This previous, cumbersome process could take up to seven days for users to track down where a product came from, obtain the paper-based data, and then contact the supplier and company that imported or shipped the product,” the publication explained.
Since logistics mobile apps like LoadDocs already capture large amounts of data from the farm, plus metadata like timestamps and geolocation, there is also potential for fleet operators already employing existing technologies to link those systems with blockchain on the back end.
For Walmart suppliers and contractors, the move comes after two other recent experiments employing similar technology to track pork imported from China and mangoes grown in Mexico. Earlier this year, it was also revealed that the retailer has been quietly filing patents for future scenarios built around both blockchain and autonomous fleets.
In years past, Walmart has also demonstrated demand-side interest in earlier digital records technologies that have long held promise to increase efficiency and lower logistics costs. Some fleet owners will also remember Electronic Data Interchange (EDI), first debuted in the 1960s as a potential digital alternative to time-consuming paperwork. Since these digital systems were only designed to be shared between two parties, however, the private nature of the technology and frequent need for custom development projects has made EDI expensive and difficult to scale.
As a result, companies are still grappling with long lag times for manually filling out and mailing delivery documents, slowing both invoicing and driver payments. Communication between drivers, back office workers and customers is another pain point that our team continues to work to address day in and day out with our Vector Portals, supercharging connectivity enabled by customers’ existing TMS platforms.
With blockchain, thorny questions about who must invest to bring complete systems to life and ensure reliability — suppliers, carriers, customers, tech providers? — are also likely to move to the forefront. As the world of logistics tech continues to evolve, the big lesson blockchain might draw from EDI is that even investment from market-makers like Walmart can be stunted with a lack of standardization.
