New Kids on the Blockchain: Effect on perishables market

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As beneficial as blockchain is likely to be in the logistics arena, there are clearly limits to the alleged miracles it is said to perform by overheated marketing departments. “Blockchain can only be a tool to a bigger solution that replaces a legacy system,” Kuhrt said. “It’s not a general magic that will solve everything that is wrong with the industry.”

So what has to happen in airfreight before blockchain can become common? Mario Loupa, executive partner and industry leader for Europe IBM, Global Travel and Transportation Industry, warned that there are many infrastructure details that must be ironed out, including further adoption of e-AWBs and deciding what kind of “backbone architecture” will be used to convey the information. “We are aware of a lot of discussions about blockchain in the air cargo community,” he said. “But before you can apply blockchain, you have to get access to the data. There is still a lot of paper being used in the industry.”

Compared to seafreight, the problem is “much more fundamental” with air cargo, Loupa said, where there is a more diverse community of forwarders, ground handlers and airports, many of which rely on their own technology and legacy systems. “Anyone that ships could say, ‘We don’t want to own the platform,’” he added.

But increased future use of the technology may help. Kuhrt said that Walmart plans to leverage its distributed ledger technology, also based on Hyperledger Fabric, to track and trace pork in China and produce in the U.S. — “two high-volume product categories with large markets.”

Maersk has finished its initial pilot project, but “will await pilot results before going into further details – probably by the end of the year,” said Mikkel Linnet, press officer for the Danish maritime giant.

For those impatient to see some concrete results from blockchain-tracked air cargo shipments, Kuhrt said the pace of development will mostly depend upon the will of the vested interests to commit to a new framework and relinquish control over its use. “We have the parts developed, we have the technology,” she said. “Solutions for other industries are really there. However, the question is, how long would it take for the industry to adapt it? That’s a question of incentive.”

IBM’s Loupa speculated that development of blockchain in air cargo might move forward in a two-step process. “In the near term – maybe one to five years from now – we may see the first few specific-use cases going to blockchain, in airfreight and the passenger side, as well,” he said. “In the longer term – by maybe the 10-year mark – we could start seeing traditional lanes being taken over by blockchain.”

At Hyperledger, Kuhrt added, the group “aims to provide tools for communities to build their own chains, rather than driving everyone to one chain.” She said she envisions a world of many chains – some public, like the crypto-currencies, and some “permissioned,” likely in healthcare.

“By developing a common distributed ledger technology that is shared, transparent and decentralized,” she added, “the possibilities are endless.”

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