In order for blockchain to succeed on a global scale to enable greater transportation and logistics data transparency and security, an open source standard will be required, according to a FedEx executive who heads up an alliance working toward that goal.
Dale Chrystie, a business fellow and blockchain strategist at FedEx and chairman of the Blockchain in Transport Alliance (BiTA), said a of lot people including FedEx Chairman Fred Smith believe blockchain will transform supply chains worldwide.
“We look through a telescope and get caught up in the hype, envisioning this wonderful city of blockchain in the future,” Chrystie said. “But when you put the telescope down, you realize we’re standing envisioning the city but we’re separated by a canyon.”
FedEx recently participated in the Blockchain Revolution Global conference in Toronto, participating in a panel discussion with representatives from UPS and DHL moderated by Don Tapscott, executive chairman of the Blockchain Research Institute. All agreed on the need for uniform, open blockchain standards backed up by national governments, as a way to reduce friction and remove barriers to global trade.
Chrystie said he believes open source standards will eventually bridge across that canyon. There are several proprietary blockchain initiatives, including a new platform from Microsoft build on its Azure cloud services with JP Morgan’s distributed ledger technology, and IBM Hyperledger.
“Of those trying to make a proprietary play across the canyon, some will fail and some will succeed,” he said. “But the broader business model will be built on global blockchain open source. A number of companies are coming together to identify data elements, and those will become standards. BiTA is helping design standards, we’re not building the bridge – that will take a bigger open source effort, with many people contributing for the good of all.”
BiTA has nearly 500 members including UPS, Uber Freight and Ryder and major retailers Target and Home Depot, along with Google, Whirlpool and Procter & Gamble. It also includes many other 3PLs, carriers, delivery services, brokerage and freight forwarding companies, software firms, supply chain solution providers and manufacturers.
“Our members represent $1 trillion in global commerce, and scale is important for this to succeed,” Chrystie said. “There are key members on the standards council from UPS, Daimler and Salesforce, both large and small enterprises. Those are the kinds of people at the table working through these issues. Where we can agree, all will benefit from lower barriers to trade.”
BiTA’s first standard and framework, published in March, deals with shipment tracking and location. It was drafted, reviewed and approved in six months, lighting fast for standards organizations.
Chrystie said part of the work of BiTA and other open source groups is countering the hype around blockchain, which first came to light as a way to securely manage cryptocurrency transactions.
“We spent a lot of time figuring out, it’s not magic dust,” Chrystie said. “If you pull back, what is blockchain? Honestly, it’s not very fast or scalable, it’s not the only database or the best database. However, what it does do it does really well. Where (product) authenticity and (sourcing) provenance are critical it can be transformative. Years from now it will just be the foundational layer under everything.”
UPS spokesman Kyle Peterson said the company views blockchain as an important innovation that could facilitate international trade, and is exploring use of the technology in its customs brokerage unit.
“UPS sees the need to create industry standards and protocols to enable blockchain platforms to operate together with established technologies,” Peterson said.