Published: August 25, 2020
It’s been eleven years since Bitcoin was created, and only the last few that we’ve heard much about it in the news. Most of us understand that it’s a currency that exists only online without any type of government control. What most people don’t know is that the foundational technology behind Bitcoin, called Blockchain, has many other uses and has the potential to revolutionize supply chains.
Blockchain technology offers a digital ledger with a unique combination of transparency and privacy. Information entered cannot be altered or deleted, and all entries can be tracked by anyone. The specific entities making the transactions are private though, so only those involved know who’s who.
The other appeal of Blockchain technology is that any type of data can be recorded – documents like certificates, contracts or health records; financial records or transactions; geo-tracking data like location at a certain date and time; and on it goes.
So let’s take a peek at what could be our future with a simplified supply chain example.
A luxurious spa hotel in Mexico buys only organic ketchup, and they want assurance that that’s what is delivered. The ketchup is made in Nebraska with tomatoes from British Columbia (BC).
First, the BC farmer puts his organic certification on the blockchain ledger. Sensors are placed in the load of tomatoes and both the farmer and the driver note in the ledger that the shipment is picked up on August 20th at 7 a.m. The sensors record the temperature in the van at 17 degrees Celsius, as specified by the farmer. All of the paperwork associated with the shipment is also recorded. The temperature and location of the tomatoes is constantly tracked.
Crossing the border from Canada to the United States is a breeze, because all of the necessary documentation is readily available to the agents and fully authenticated via the blockchain.
The shipment is accepted at the ketchup plant in Nebraska after viewing the records of the tomatoes from the farmer to their location. The batch of ketchup is made and labeled with a code that shows which lot of tomatoes was used.
The load of ketchup is picked up to take it to a food supplier in Mexico. Again, crossing the border is quick and easy, with all needed documentation provided on the blockchain, and no reason to question its validity. The supplier in Mexico accepts the load of ketchup and delivers it to the hotel, where the receiver is able to trace the ketchup back to the organic farmer in BC.
Juniper Research, a company in the United Kingdom that specialises in new high growth market sectors within the digital ecosystem, forecasts that use of blockchain technology in supply chains could save $31 billion in food fraud and reduce compliance costs by 30% globally. It could also provide a much more efficient way to deal with any food recalls.
In addition to tracking shipments, “smart contracts” on a blockchain format can be written to take action if and when certain criteria are met. So, payment to the farmer, for example, could be made automatically when the tomatoes are received at the ketchup plant, and so on down the chain.
Using blockchain technology for purposes beyond cryptocurrency is still relatively new, but its potential for our industry is exciting!
Ameri-Can Logistics Ltd. is a trucking company servicing shipping ports, railroad depots, and communities throughout North America. Operating 24/7/365 with continuous dispatch services, businesses have relied on Ameri-Can to distribute their products to buyers in Canada, the United States, and Mexico, for three decades.
