Month: July 2020

DHL Global Forwarding (OTCMKTS: DPSGY) has opened a 20,000-square-foot, temperature-controlled facility in Indianapolis that will cater to pharmaceutical and medical product shippers.

The $1.6 million facility has variable temperature capabilities to process all types of pharmaceutical, biotech or medical products that require strict temperature control, the company said.

The Indianapolis facility is one of eight “Certified Life Sciences Stations” that support DHL’s Thermonet service for temperature-controlled airfreight transport. Thermonet uses shipment sensors and an IT platform to provide customers with in-transit temperature visibility.

The site is ideal because many large pharmaceutical companies are located in Indianapolis and it is next to the airport, David Goldberg, CEO of DHL Global Forwarding USA, told American Shipper.

DHL Global Forwarding is exploring the development of a dedicated life science freighter service linking Indianapolis with Europe, the Middle East and Africa, Goldberg said.

He said the ongoing investments by DHL Global Forwarding into its North American life sciences and health care logistics network is timely, since the coronavirus pandemic will likely result in more reshoring of pharmaceutical production to the region.

DHL and other larger third-party logistics companies have invested heavily in logistics services that cater to shippers in the life science and pharmaceutical fields.

Its contract logistics unit, DHL Supply Chain, in mid-July announced a 10-year service agreement with Siemens Healthineers (OTCMKTS: SMMNY) to oversee its product distribution in North America.

Siemens Healthineers will occupy about 260,000 square feet of a 422,000-square-foot, DHL Supply Chain-owned facility in Memphis, Tennessee.

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Aircraft manufacturer Boeing (NYSE: BA) is experiencing an uplift in business to convert former passenger planes for all-cargo operations.

“Strong demand is driven by customers transitioning to newer-generation freighters and choosing a Boeing converted freighter (BCF) as a cost-efficient alternative that can be modified with approximately a 90-day turnaround time, regardless of the conversion facility,” spokeswoman Laura Fenton told American Shipper.

Sustained e-commerce growth and an abundance of affordable aircraft to convert to freighters is driving this demand, she added.

German courier DHL Express (OTCMKTS: DPSGY) recently contracted with Boeing to convert four 767-300 passenger planes to freighter operations. The express carrier said conversions are part of an effort to modernize its long-haul intercontinental aircraft fleet.

“We have operated the 767-300F model across our global fleet for many years and look forward to continue investing in the platform by adding more 767-300BCFs,” said Geoff Kehr, DHL’s senior vice president of global air fleet management, in a statement.

The website Plane Spotter says DHL Express currently operates a fleet of 34 767-300 freighters.

According to Boeing, the 767-300BCF has the same cargo capacity as the purpose-built 767-300 freighter, with about a 50-ton payload and a 3,000-nautical-mile flight range.

In another recent announcement, Boeing said it will convert two 737-800 passenger planes to cargo operations for Aircraft Finance Germany (AFG), an aircraft brokerage firm.

The 737-800 cargo plane can carry up to 24 tons of freight per payload and with a 2,000-nautical-mile flight range is best suited for regional express services, Boeing said.

Boeing delivered its first 737-800BCF in 2018 and now has 10 airline customers that utilize the cargo aircraft. The company said it has ramped up production of 737-800BCFs with 132 aircraft orders. So far, Boeing has delivered 34 of the converted planes.

Boeing did not disclose financial terms of the aircraft conversions for DHL and AGF.

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A huge flow of all-cargo aircraft flown by independent operators combined with heightened activity from integrated logistics providers UPS and DHL, pushed Brussels Airport’s cargo volume into positive territory in June after three months of steep declines caused by the coronavirus pandemic.

It’s a positive sign for a hub airport that normally depends on passenger traffic.

Brussels Airport Co., which operates the airport, reported Wednesday that cargo volume increased 4.8% in June, year-over-year, despite a 91% drop in cargo volume carried on passenger aircraft. Most large passenger airports that also serve as international cargo hubs have been deluged by freighter traffic, but it has not been enough to offset the loss of shipments carried in the bellies of passenger aircraft grounded by COVID travel restrictions.

Freighter volume in June jumped 71.5% above the June 2019 level, while volumes from express carriers/integrators grew 29.5%, according to figures from the airport. It handled 1,738 cargo flights, a 46% increase, while passenger moves fell 94% from 18,107 to 1,146.

First half results showed a 4.6% drop in cargo volume to 235,729 tons, with belly cargo tonnage down 50.7%, freighter tonnage up 27% and integrator volume up 9.7%.

Airport officials said heavy demand for personal protective equipment and other coronavirus supplies led to a huge surge in freighter operations, including from airlines that never before flew there and passenger planes temporarily converted to fly dedicated cargo services. 

New airlines that have called at Brussels Airport since the start of the pandemic include Miami-based all-cargo carrier Amerijet, Silk Way Airlines and Virgin Atlantic.

Express carriers UPS and DHL are integrated logistics companies that run their own airlines and control the shipments that ride on board. 

Amsterdam Schiphol Airport earlier reported a 13% decline in June cargo tonnage despite a 124% increase in full freighter flights (2,473), with volume down 14.5% to 656,000 tons for the first half of 2020. The Hong Kong Airport Authority said cargo throughput decreased 7.7% to 357,000 tons in June versus 2019 primarily due to the decline in transshipments from reduced belly capacity on passenger flights. 

“One of the strengths at Brussels Airport was the sense to tackle the rapid capacity reduction from a community standpoint. Different parties worked together reaching out to their network to get the traffic flows moving. This coordination and active facilitation between shippers, forwarders, handlers, customs and airlines truly made a difference and was already part of our earlier success. In these times of crisis, we could even leverage this with these volumes as a result” said Steven Polmans, director cargo and logistics at Brussels Airport Co., in a statement.

Polmans this month announced he will resign his position at the end of 2020 after 10 years with the airport operator.

Officials said the highest import growth came from Africa and Asia,  with export volumes mainly growing towards Asia and North America. Export to Africa is still below pre-Covid levels due to the grounding of home carrier Brussels Airlines, but is slowly recovering as more and more carriers resume flying.

The airport said it has continued to work on infrastructure upgrades and is currently working on a runway renovation. Construction will have a marginal impact on freighter movements during the six-week project, it said.

Click here for more FreightWaves/American Shipper stories from Eric Kulisch.

@ericreports / LinkedIn: Eric Kulisch / ekulisch@freightwaves.com

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The coronavirus pandemic has made the schedule-driven ocean container carriers seasick. To counter decreased U.S. import volumes and maximize vessel operations, these companies have resorted to the use of “blank,” or canceled, sailings.

Shippers and non-vessel-operating common carriers have struggled to manage their own fragile supply chains against hundreds of skipped-sailings announcements in recent months.

While blank sailings offer ocean container carriers a means to economize their capital-intensive vessel operations, the U.S. Federal Maritime Commission (FMC) said it will continue to closely monitor this activity for anticompetitive behavior.

Under the Shipping Act, ocean container carriers may use blank sailings to reduce capacity in response to low demand. The FMC, however, has an obligation to ensure that the capacity reductions are not unreasonable and do not cause unreasonable increases in transportation costs for shippers.

The FMC generally requires notice from the alliances before blank sailings are implemented and no later than 15 days after any such changes are agreed upon. Alliances may request a waiver from the FMC if they are unable to make a timely filing.

“The unusual circumstances and challenges created by the COVID-19 pandemic, together with trade agreement changes, have heightened the FMC’s scrutiny of capacity reductions by global alliances,” FMC Chairman Michael Khouri said in a statement.

The FMC monitors this activity through the ocean carrier alliance agreements filed with the agency.

“The FMC receives exhaustive information from regulated entities, in this case, parties to an ocean carrier alliance agreement,” Khouri explained. “That information is carefully analyzed, along with other information that permits FMC staff to determine trends in the marketplace and the potential for illegal behavior.”

To monitor ocean carrier agreements, the agency uses a “red-yellow-green scale,” with red signifying higher-profile agreements.

“All global carrier alliances are categorized as red agreements,” Khouri said. “These agreements have the highest potential to cause or facilitate adverse market effects based on the agreement’s authority and scope in combination with underlying market conditions.”

Specifically, Khouri said the FMC staff monitors key economic indicators and changes in market conditions for all global alliance agreements “to detect any joint activity by agreement members that might raise and maintain freight rates above competitive levels.”

The FMC follows these analyses with detailed quarterly reviews, which are periodically presented to the commission with recommendations.

Under the FMC’s “four-tier” approach to monitoring alliance agreements, blank sailings are closely analyzed:

• The first tier involves an immediate review of advance notifications of canceled alliance sailings or changes in vessel capacity that affect the supply of vessels of any individual alliance service by more than 5% of average weekly vessel capacity.
• The second tier includes a deep-dive review of minutes submitted by the carrier management in charge of making vessel deployment decisions in the alliance. This information helps the FMC assess medium- and long-term outlook for capacity levels and how that impacts freight rates.
• The third tier of review covers service changes in individual alliance members’ vessel capacity, capacity projections and how that relates to changes in freight rates.
• The fourth and final tier consists of reviewing and analyzing confidentially filed carrier data submitted by the alliances for completeness and accuracy and to spot “potential red flags.”

If the agency detects carrier behavior that violates the Shipping Act, it seeks to address these concerns with the carriers first and, if necessary, can go to federal court to seek an injunction to enjoin further operation of the alliance agreement, Khouri said.

Khouri said, however, the FMC is receiving notice from ocean containers in both the trans-Pacific and trans-Atlantic trades that some blank sailings will be withdrawn.

The FMC is also monitoring the impacts of the COVID-19 pandemic on the U.S. container shipping industry through its Fact Finding 29 investigation, which is being led by Commissioner Rebecca Dye, and making recommendations to ease marine terminal inefficiencies.

The agency on April 27 issued an order to temporarily allow service contracts to be filed up to 30 days after they take effect to provide relief to shippers and ocean container carriers impacted by the coronavirus pandemic. This relief will remain in place through Dec. 31, the FMC said.

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The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.  

On a tonnage basis about 70% of U.S. exports and imports travel by ocean vessel. Volume-wise it is the most important mode of international trade. When merchandise trade is focused on Canada and Mexico, as members of the United States-Mexico-Canada Agreement (USMCA), the motor carrier sector dominates in U.S. export flows. Since March 21, 2020 border crossings among the three USMCA nations have been restricted to essential workers due to concerns over the spread of COVID-19. This restriction has been reviewed on a month-by-month basis. As of today, it will remain in place at least until August 21.

There is also fear of further spread of COVID-19 by disembarked crews from the world’s ocean vessels and cruise ships. This has kept about 200,000 crew members in limbo since March. While these crews are still being paid for their work, they have been stuck aboard vessels with little to do other than work or sleep. Contracts for crews are under one year in duration in order to comply with the 2006 Maritime Labor Convention. Vessel companies pick their crew members up and drop them off at major ports of call. Beyond that, crew members typically fly to and from their home countries. The International Maritime Organization (IMO), which regulates international waters on behalf of the United Nations, estimates that only 20% of crews scheduled to stop work and leave their vessels during March have been able to do so. On any given day there are about 60,000 cargo vessels involved in commercial activity around the world. They are crewed by about 1 million people.

The nature of the ocean vessel sector has exacerbated the current problem. About half of the world’s commercial vessels engaging in international trade fly so-called flags of convenience (e.g., those of Panama, Vanuatu, etc.). This serves to keep operating costs and taxes down. Also, crews can be made up of citizens of practically any country. In contrast, U.S.-flagged vessels require the crew to be only U.S. citizens – and, therefore, subject to U.S. employment laws (see 46 U.S.C. §8103 (a) and (b)).

Under these circumstances it is easy for a country to deny entry to a crew member who has finished out his contract because he is already on a conveyance capable of taking him elsewhere. However, other ports of call can act in the same way. The number of commercial flights to the crew member’s home country may be reduced and may not depart from an airport near a vessel’s scheduled port of call. Putting all these possibilities together creates a dicey situation for all those who have been working well beyond the official close of their contracts. On the other side of the coin, the drop in flights due to travel bans has left those crew members who were scheduled to work stuck at home since March.

Why not designate these crews as essential workers as was done for others in the transportation industry? Well, these were government pronouncements applying to their domestic workers and to foreign workers entering their countries on a temporary basis in order to make export or import deliveries. By contrast, ocean vessel crews can remain confined to their vessels while cranes and drayage vehicles do all the loading and unloading. 

Certainly, boredom and fatigue can take their toll on crews and their vessel captains. Mistakes at sea and at port can be costly. Therefore, it makes sense for the international community to come together to work out a solution. In that regard the IMO has been urging its 174 member states to allow crew members ashore who simply wish to return home. So far 13 nations have signed the IMO’s pledge. These are Denmark, France, Germany, Greece, Indonesia, Netherlands, Norway, Philippines, Saudi Arabia, Singapore, United Arab Emirates, United Kingdom and the United States.

The importance of the ocean vessel sector to international trade cannot be overstated. It is a global industry requiring global solutions whenever problems arise. The maritime sector is also a reminder that supply chain management is just as much about the efficient movement of people as it is of raw materials, sub-assemblies and final goods. Transportation makes or breaks international trade. Well-rested crews contribute to the quality of transportation.

Click here to see other commentaries by Darren Prokop on American Shipper and FreightWaves.

Within the global food supply chain, seafood logistics are among the most compromised, due to the widespread misuse of labels and direct seafood fraud. Marine conservation non-profit Oceana published a report on the extent of seafood fraud within North America. Its research showed that the U.S. was particularly vulnerable, as 90% of all the country’s seafood is imported – often from Southeast Asia. 

Unisot, a Norwegian blockchain-based company, is working to bring visibility into global seafood supply chains. Unisot’s platform is powered by blockchain and provides all parties within the network a ‘universal source of truth’ to the end-to-end movement of shipment – from origin to the end customer. 

“We have technology like electronic data interchange (EDI) and email in use right now, but they are old and inefficient technologies. This results in companies not exchanging enough information with each other,” said Stephan Nilsson, the co-founder and CEO of Unisot. “Companies collect tons of data and store them in their data warehouses. They only use it internally, creating closed data silos inside their organizations. That’s a big problem, and we are tackling that.”

Trust is a deciding factor in data exchange, which the technology of blockchain can provide via its secure and decentralized ledger system. Nilsson explained that Unisot realized early that supply chains could benefit tremendously by adopting blockchain across their ecosystems.  

Due to its Norwegian roots, Unisot chose the seafood supply chain to pilot its blockchain technology, as the fishing industry is one of the largest contributors to Norwegian exports. Unisot created the Seafood Chain, which is a vertical built over its blockchain platform. The company is currently working with two pilot customers in Norway – one being a fish producer and the other a seafood distribution business. 

“By working with these two customers, we can cover the whole seafood supply chain – right from fish eggs to breeding and then the distribution that goes all the way to restaurants and end consumers,” said Nilsson. 

He contends that the COVID-19 situation has exacerbated the need for implementing such technology within supply chains, as they depend heavily on a human workforce to run logistics operations. 

“When you have people staying at home due to the pandemic, it disrupts the supply chain. Automating simple things such as order and delivery messages can help save a lot of time,” said Nilsson. “We’ve built the blockchain data interchange (BDI) that is just like EDI, but with blockchain as the communication layer. Instead of going via third parties and EDI providers, we do it peer-to-peer via the blockchain and have a secure, encrypted and cost-efficient network.”

The end-to-end visibility into supply chains will mean complete provenance tracking for end consumers. Nilsson explained that consumers would only have to scan a code on the seafood product they buy at the market to get details on the type of fish, the fishing company, fishing location, the time and place of its processing, and the time to reach the supermarket shelf. 

The transparency also allows seafood producers to seek feedback from end consumers directly. Unisot has developed a feedback process that works similarly to that of Uber or Airbnb, in which consumers can leave a rating between one to five on the product they consume. This rating would reach the producers, helping them improve their seafood quality based on real-time feedback.

With data stored within an encrypted and secure network, companies can now start sharing information with businesses of their choosing. Companies can also monetize data, with critical data put behind a paywall and charged for according to its market need. 

“Our customers only pay for what they use and do not need any understanding of blockchain to work on our platform,” said Nilsson. “Most blockchain companies only provide APIs for companies to build integrations, making it very complex and time-intensive. We mitigate that, making it very easy and low cost for companies to start using a blockchain system.”

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Global freight forwarder Kuehne + Nagel Group (OTCMKTS: KHNGY) used its “agile structure, rigorous cost management and high-quality service offerings” to counter potentially devastating financial impacts from the coronavirus pandemic during the first half of the year, said CEO Detlef Trefzger in a statement on Tuesday.

The Swiss company recorded a first-half, pretax profit of CHF 419 million ($449 million), down 18% from the same period last year.

“We took the right measures early on and successfully managed Kuehne + Nagel under these difficult conditions,” Trefzger said.

Kuehne + Nagel breaks down its logistics business across four segments: ocean, air, road and contract.

Turbulent seas

In its ocean transport segment, the company handled 1.1 million twenty-foot equivalent units (TEUs) of containerized freight during the second quarter of 2020, an 11.7% drop compared to the same period last year. This resulted in a second, pretax profit of CHF 88 million ($94 million)for the segment, down 29% compared to the same period in 2019.

Kuehne + Nagel said its first-half, pretax profit for the ocean transport segment was CHF 167 million ($179 million), down about 29% compared to the same period last year.

The company said it gained some traction in container traffic through pharmaceutical, refrigerated and e-commerce cargoes, but this volume was not enough to offset the “significant decline in the high-yielding SME customer portfolio.”

The forwarder’s second-quarter pretax profit from airfreight registered at CHF 110 million ($118 million), up 17% compared to the same period last year. It handled about 315,000 tons of airfreight during the second quarter, down 22% from the same period in 2019.

Air traffic control

Kuehne + Nagel attributed its second-quarter airfreight profit to the high demand for goods to fight the coronavirus pandemic, which required the purchase of all-cargo charters and space on certain passenger-to-cargo flights.

“With the gradual resumption of passenger services since June, a slight normalization of the general market conditions is visible,” the company said.

The company’s second-quarter success in airfreight generated a 4% increase in pretax profit for CHF 181 million ($194 million), compared to CHF 174 million ($186 million) for the first half of 2019.

Over the road

Between April and May, Kuehne + Nagel said it experienced a “significant decline” in its over-the-road business in Europe and North America during the second quarter, but since June has seen demand from European shippers increase to pre-COVID-19 levels.

“In North America, demand for all product segments — with the exception of pharma and e-commerce — was significantly lower than in the previous year,” the company said.

Road logistics services for the second quarter generated CHF 9 million ($9.6 million) in pretax profit, down 57% from the same period last year, with a first-half pretax profit of CHF 26 million ($28 million), down 42% compared to the first half of 2019.

Contract logistics

Kuehne + Nagel sustained a second-quarter pretax profit within its contract logistics segment of CHF 28 million ($30 million), down only 9.7% against the same period last year.

The company said a more significant reduction in demand for contract logistics services was “mitigated by stringent cost management.”

Contract logistics accounted for CHF 26 million ($28 million) for the first half of the year, down 42% compared to the same period in 2019.

COVID uncertainty

Kuehne + Nagel, which has more than 80,600 employees worldwide, said its goal is to ensure continuity of its business operations for the remainder of the year, including monitoring the business results of its recent acquisitions.

“We expect the second half of the year to continue to be marked by major uncertainties,” Trefzger said.

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Schiphol Airport in Amsterdam witnessed a nearly 50% rise in freight flights for the first half of the year, but this traffic was not enough to counter the dramatic drop in cargo transported in the bellies of passenger planes grounded by coronavirus travel restrictions.

Despite a 12.4% increase in all-cargo volume to 463,679 tons, the Amsterdam airport said Monday that cargo throughput had fallen 14.5% because passenger traffic virtually disappeared in March when COVID-19 surged in Europe. The number of passenger flights with lower-deck cargo dropped 51.6% compared to the first six months of 2019, wiping out 46% of passenger cargo.

Inbound cargo volumes fell 11.5% to 341,130 tons, and outbound cargo volumes fell 17.6% to 314,812 tons, the Dutch airport authority said on Monday.

Schiphol was the fourth-largest airport for cargo in Europe during 2019, according to Airports Council International.

Business to all regions was impacted by the coronavirus outbreak. North American airfreight was down about 17% in both directions.

Airport officials are not sure how Schiphol’s cargo prospects will change during the second half of the year with the COVID-19 pandemic affecting overseas markets differently.

Shanghai remained Schiphol’s single largest cargo destination during the six-month period.

“The COVID-19 pandemic has also led to a shift in cargo flows and some usually high-volume verticals have decreased, such as the import and export of flowers,” said Bart Pouwels, the airport authority’s head of cargo.

Airport officials say they are seeing passenger flights increase as Europe begins to reopen its borders, which means more cargo opportunities for shippers.

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In the last-mile segment of logistics, delivery route planning and schedule optimization are predominantly human-driven tasks. Organizing workforce and determining delivery routes of the day is an exhaustive process, which can negatively impact bottom lines if handled inefficiently.

OptimoRoute, a route planning and schedule optimization platform, bridges this gap by leveraging technology. “We help companies organize their mobile workforce, building routes and schedules for them to increase the number of deliveries or services performed with their existing workforce,” said Marin Saric, the CEO and co-founder of OptimoRoute. 

Saric explained that by reducing the unnecessary consumption of resources, companies can grow their revenue. Case studies of companies using OptimoRoute have shown them to increase activity by nearly 30% via intelligent management of schedules and reducing fuel expenses through dynamic route planning. 

“Logistics is not just happening in big warehouses and on trucks moving between cities,” said Saric. “Logistics is every time you call a plumber to your house. Logistics is a pharmacy trying to quickly organize medicine deliveries to homes during the pandemic. OptimoRoute pushes a product that provides the most advanced logistics planning possibilities into everyone’s hands.”

OptimoRoute currently has over 1,000 businesses using its platform, from small neighborhood businesses to large multinational corporations generating hundreds of millions of dollars in revenue every year. COVID-19 led to an explosion of interest in OptimoRoute, especially among last-mile food delivery businesses. Food delivery orders placed monthly with businesses using OptimoRoute rose 151% month-on-month in April, compared to 19% the month before. 

Saric called the last-mile route optimization issue a particularly complicated example of the “traveling salesman problem” where salesmen selling across several cities would have to find the shortest possible route to visit every city and return to their origin city. A major chunk of all routing-related technology currently in use today is several decades old. Saric contends they are inefficient and not adaptable to real-time changes in logistics needs.

Today, companies across a myriad of industries work with OptimoRoute to get their workforce schedules in order. “For example, the Southern Star Central Gas Pipeline runs pipelines that cross several U.S. states and lay thousands of miles. Over 300 people are maintaining it, and they are organized every day using OptimoRoute,” said Saric. “We are also used by a huge number of small business services, that do anything from pool services to meal-prep kit delivery services.”

The company raised $6.5 million in a Series A funding round earlier this year, led by Prelude Ventures and with participation from other Silicon Valley-based venture capital firms and angel investors. Saric explained that OptimoRoute was particular in raising investment from Silicon Valley, as the high standards set by investors from the region would help validate their technology prowess. 

“OptimoRoute allows companies to plan across large time scale horizons. We provide multi-day work schedule planning tools to businesses for as little as $100 per month. This is because of the fundamental breakthroughs that we’ve achieved over the years,” said Saric. “Our solution automates even the most detailed decisions that are usually left to a logistics manager today. Timely delivery percentages go up considerably, and companies save substantially on fuel.”

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The BiTA Symposium @HOME on June 10 saw speakers present blockchain use cases and possibilities across various verticals within the supply chain industry, elucidating ways to leverage blockchain to bring in more transparency and visibility into logistics operations. In a series of two digests, FreightWaves outlines key aspects of those talks individually. For the first part of the discussion, check here.

Specright empowers Salesforce blockchain customers to create trusted supply chains

Customer relationship management (CRM) software company Salesforce is currently working on a closed blockchain pilot program, initiated based on customer interest in cross-company collaboration. Dan Harrison, emerging technologies architect at Salesforce, explained that such collaboration is more important than ever, whether to simplify supply chains or to track the provenance of products.

“In Salesforce blockchain, we focus on a couple of things from a value perspective. It’s the ability to, in a few clicks, be able to deploy a network. We give our Salesforce admins the tools to manage their blockchain, exactly the same way they manage their current Salesforce projects,” said Harrison. “So now, you have a huge number of people that are able to create, deploy and manage a blockchain network.”

Harrison contended that for the blockchain network to be a success, it was important to gain widespread adoption, as that would bolster the network. Salesforce has built its blockchain network on the Hyperledger Sawtooth, but the company also encourages businesses to bring their own blockchain networks. The Salesforce blockchain sits inside the Customer 360 platform.  

Specright comes into the picture with its already existing blockchain network with a large number of businesses adopting it. Specright is pioneering “specification management,” which deals with managing the most granular details of products and their packaging. The company digitalizes these specifications and places them on a single source of truth via its blockchain network. Being a decentralized network, it equally allows all users to track changes as products move across multiple stakeholders. 

Interoperability innovations: Addressing the cross chain challenge

Dean Tribble, the CEO of Agoric, spoke about driver credential verification that uses a secure and immutable blockchain network. “A low-hanging fruit for blockchain in freight is the high-assurance chain of custody, which requires driver authentication,” he said. Such networks also help realize payment automation, as processes can be set to automatically issue payment out to intended recipients as and when freight custody changes hands. 

However, the issue with structuring such a system is that data is spread over several networks and they would need to be interoperable for seamless operations. Data privacy is another parameter that needs to be addressed, as companies would need to disclose private data for credential verification. 

Agoric is building a next-generation platform for smart contracts, for public, private and consortium chains alike. This allows millions of developers who are familiar with JavaScript to write smart contracts. 

Smart contracts are an arrangement between multiple parties that can be expressed in software code, where the behavior of the code enforces the terms of the contract. Such smart contracts, when built within a blockchain network, can realize integrity within computing. 

Interoperability between independently functioning computers becomes easy, as smart contracts provide high assurance across multiple machines, increasing trust across ecosystems. 

Using Routeique to ensure touchless collection in a post-COVID world

Mike Allen, CEO of Routeique, a cloud-based order and delivery management platform, spoke about the changes that can occur in the way records move through the supply chain in the post-COVID world. 

Though paper documents were already waning in popularity as a means of communication, the pandemic has forced companies to adopt digitalization faster. Allen explained that putting together a road map on what to do right now and planning for a couple of years into the future will help companies stay on track toward getting their processes digitalized. 

Allen spoke of how Routeique would be part of a larger ecosystem and of the need for accessing data, ingesting and broadcasting it to all parties that need it — securely via a blockchain network. “It is about making sure the data we’re ingesting is making the algorithms smarter and trustworthy,” he said. 

Today, blockchain ecosystems are about having a descriptive model that shows stakeholders the current state of the supply chain, giving an accurate picture of what is happening. However, Allen explained the need for switching to prescriptive models that can help predict bottlenecks within the ecosystem before they occur. 

“That is where things are headed with smart contracts within blockchain networks. It’s about where we can get to, beyond just reporting and analytics. It is about actually improving the bottom line using those metrics, as opposed to just reporting on them,” said Allen. 

Delivering supply chain transparency using a turnkey, configurable blockchain platform

Sergei Beliaev, the CSO of DLT Labs, a blockchain-based distributed data management platform, spoke about how the company established a single trusted version of truth that is truly shared between participants in real time. “If there are no multiple views of the world, there is nothing to reconcile,” he said.

DLT Labs has partnered with Walmart Canada to create a blockchain solution for the latter’s supply chain to improve efficiency, reduce costs and increase control over operations. Pete Gowanlock, vice president of freight at DLT Labs, explained how a single version of the truth would reduce the number of steps in a process from 11 to five. 

“A freight invoice is complex. In our scenario, we have one invoice per shipment. Each contains a lot of information with many data elements associated with it. The invoice is the first step in the process. The Internet of Things (IoT) data will be collected from this point forward. GPS tracking helps track shipment delivery. It can help find if there were wait times at the distribution center loading docks and if the shipment incurred any damage,” said Beliaev. 

The next step would be for companies to have an additional review of the transportation provider and other assets that are not necessarily tracked by GPS. Walmart as the shipper will have full visibility into all the information being added in real time. 

“Everything going through the smart contract process within the platform is being tracked. It is visible and is approved as you go through each step. So when the final invoice is submitted, there will be no reconciliation needed,” said Beliaev. 

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