Rob Carter, CIO at FedEx called on the government to commence the process of implementing blockchain for international shipping standards for the shipping industry. This took place during a panel discussion at the Blockchain Revolution Global in Toronto, Canada.
Carter believes that integrating a general blockchain system will help tackle the problems of counterfeit and illegal goods. Blockchain technology provides a means for tracking these items back to their source of origin.
Stopping Counterfeit Goods
For a long time, the maritime industry has battled the plague of counterfeit and illegal products. Despite the implementation of due diligence recommendations, these measures have not been able to eradicate the problem, as smugglers always find loopholes around them. This is the reason why Rob Carter is pushing for a systematic blockchain for international shipping which is global and mandatory, as it will help digitize the information paper trail and improve traceability.
Speaking on the matter, Cater further explained that:
“There is an incredible amount of information moving with an international package. An incredible amount of paperwork [such as]certificates of origin and certain commodities require specific licenses. That information moves sometimes in digital forms and sometimes paper forms. As we move toward a more digital world, blockchain is where you piece all that together.”
UPS and DHL Join the Push for Blockchain for International Shipping
FedEx is not the only shipping company interested in the creation of a mandatory blockchain for international shipping, UPS and DHL Express have also voiced their interest in this initiative. These three shipping giants are presently working together under the umbrella of the Blockchain in Transport Alliance (BiTA); an organization with more than 500 members committed to building blockchain protocols that will help secure global supply chains.
The Complex Global Supply Chain
Global supply chains are somewhat complicated because one company cannot single-handedly complete the supply chain. Different companies handle different facets; one company may handle the shipping of parts, another company may be in charge of assembling these parts while a separate company packages and delivers the final product. This division of labor helps make the work faster, but in the absence of standardized procedures, it could bring about other inefficiencies including the trafficking of illegal or substandard products.
However, with a mandatory standardized blockchain system, all supply chain participants, including shippers, packagers, and even the government will enjoy seamless product tracking and flow of information. This helps bring about a cheaper, transparent, highly secure and trustworthy shipping process.
How Soon will Government Setup Mandatory Blockchain Standards?
Although blockchain technology seems like the best solution for the shipping industry, it appears to lack governmental support. Many experts suggest that this is because the government feels the technology is still not reliable.
Richard Smith, FedEx Logistics CEO seems to disagree. Speaking at a panel held to discuss methods for combating the trafficking of pirated and counterfeit goods. Smith quipped:
“You’re the government. You can mandate that it’s widely adopted.’ Why not plant a flag in the ground and say in the next five years all importers have to be up on blockchain? It’s the only way you’re going to be able to do it without slowing commerce to a crawl.”
This lukewarm approach towards blockchain integration by the government may change quickly. Additionally, more leaders within the shipping industry call for the implementation of standardized and mandatory blockchain protocols.