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Blockchain in Logistics


How can we achieve improved reuse of freight packaging in a world devoid of incentives and transparency? That is one of the questions teams will tackle during the Odyssey Hackathon in Groningen, the Netherlands. It is as good as certain that the use of blockchain will be part of the answer. Container Centralen, connected with the Hackathon in its capacity as expert, participated in a GS1 project in 2018. This project consisted of analysing the use of blockchain in logistics flows. What outcomes can we contribute to this event?

Gert Aagaard, Head of Technology: “Blockchain is a topic that is often discussed, but usually in a general manner. At the time, GS1 wanted to use its project to make the discussion more specific by entering into talks with other companies to get a better grip on what blockchain is and what it can mean for our business.”

Blockchain was tested in an existing logistics flow, namely the exchange of pallets. For two weeks, manufacturers, logistics service providers, and retailers exchanged pallets in an existing supply chain by means of blockchain technology. In addition to these 600 transactions, a stress test simulated 3,600 exchanges per hour (approximately 90,000 exchanges daily).

This text revealed that blockchain can make a significant difference. The exchanges were processed faster, the administration required much less time, and the reconciliation of balances is now automated. On the basis of this practical test, GS1 Duitsland created a list of recommendations for parties that want to begin working with blockchain. CC is presenting a selection of these tips in the run-up to the Odyssey Hackaton.

What do I want to solve?
Blockchain is not a panacea. It is the objective in itself. Always ask yourself the question: does database technology make sense for the situation that I want to solve? Processes and procedures must be clear before you start building. It is not ‘plug and play’. Moreover: no data, no blockchain! However, data must be available, as blockchain will not solve that for you.

With whom will I work together?
The core question is not what technology to choose, but rather the one pertaining to governance: who can participate in your blockchain and on what conditions? Who sets up the network and are they really a neutral party? Hence, blockchain technology is not the largest cost item per se of your project. Digitisation and the effort devoted to aligning partners with each other can quickly boost costs.

Do I actually want this?
Blockchain creates transparency by ensuring that shared data can no longer be changed. But do we actually want that? As a company, you must always evaluate what you want to share. The collaboration will also involve technology and the organisation. This requires an open mind.

The fear of new technologies being introduced ultimately constitutes the most significant challenge in that regard. Aagaard recognises this: “You see that the blockchain hype in the logistics industry seems to have reached its peak. Companies now seem less inclined to adopt it or even to experiment with it. In fact, Container Centralen deems it important to remain open to new technologies in the fields of digitisation and transaction sharing. We might namely become part of multiple blockchains in the future. We therefore continue to monitor the developments, e.g. by participating in the Odyssey Hackathon!”

The full report is available in the German and English languages on: website GS1

What is blockchain?
Blockchain makes it possible to record and share data, without the intervention of a central authority. One example is Bitcoin, which enables payments between parties without a bank’s intervention. This principle also has applications in logistics: blockchain can make possible a transparent supply chain in which all participants are clear on which goods are under whose management at any given point in time.

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