At the start of this year, it was announced that FedEx, one of the leading global logistics companies would be joining the Blockchain in Transport Alliance (BiTA). BiTA is a standards organization aiming to create a uniform and industry specific application of blockchain technology for the supply chain sector. Ever since FedEx fell victim to a cyber attack last year, they have been moving towards embracing disruptive technology like blockchain. For the supply chain sector, blockchain offers a well-needed revamp.
As Robert Carter, CIO of FedEx comments, “we definitely believe that blockchain represents a significant opportunity in the custodial control and chain of control for supply chain shipments”. FedEx hopes that blockchain will optimize the delivery process and increase the speed of dispute revolution. The FedEx IT team is actually running a blockchain pilot on the latter use case to allow companies both upstream and downstream of the carrier to communicate back in a common language and data structure.
Currently, the logistics industry is in an uncertain spot. The supply chain industry is plagued with inefficiency and is facing growing fraud, which is driving up costs for carriers and consumers alike. By deploying blockchain technology companies like FedEx are aiming to minimize their operational costs and improve the standard of service provided to the end customer.
FedEx is not alone in their mission either. A few months ago UPS announced they were joining BiTA to help implement their own blockchain solution. The logistics sector is starting to put its hopes on the digital transformation of blockchain in order to address the challenges it is currently facing.
Supply chain blockchain pilots are emerging because the underlying technology offers to bring transparency to the supply process. As a distributed ledger, blockchain can accurately track transactions and data transfers from the source right to their end location. This means a blockchain platform could monitor goods from supplier to end customer including all the intermediaries involved in the value chain.
The more transparent the supply process is, the better organizations can tailor their internal processes towards productivity. In addition to improved productivity, the verification process built into the blockchain helps to protect against outside interference and security threats that can be expensive to mitigate and can affect the company reputation.
As more and more big names like FedEx and UPS start to display their interest in blockchain, we can only expect the wider community to become more receptive too. Ultimately process inefficiency is a major paint point for the industry, and if blockchain is proved to address it, its popularity will soar and more businesses will adopt this technology.