Page 29 - Linkline Yearbook 2018

There are a growing number of private blockchains that are poised to deliver greater visibility, transparency, integrity, control, over supply chain and logistics operations.
The immutability and transparency provided by blockchain, the data integrity and the robustness of the system has lead Roberto Fernández Hergueta, Head of Emerging Digital Business in Everis to state that “blockchain will improve the supply chain sector due to the availability of pre-transaction information for all the involved players, the immutability of historic data, the reduction in errors in payment processing and auditing and the real time visibility across the whole supply chain, resulting in a real time Feedback from customers” (Hergueta, 2017).
Those convinced of the merits of blockchain, otherwise known as blockchainers, are paying keen attention to the importance of smart contracts, which are agreements between parties executed automatically once a pre-defined trigger point has been reached, or once the conditions that have been predetermined by the contractual parties are met. This concept is revolutionary in the legal world because it makes the breach of the clauses of the contract practically impossible, thus avoiding trials, injunctions, seizures, etc. Therefore, we will see an increase in efficiency and a consequent fall in costs, in certain operations that are eligible to be automated.
For example, the first blockchain-based insurance policy for marine cargo insurance certificates has been successfully tested by Tokio Marine & Nichido Fire Insurance and the NTT DATA Corporation. According to Tokio Marine, the certificate of insurance, the bill of lading, letter of credit and commercial invoice were all stored and transmitted on the blockchain, "It was actually proven that the blockchain based system will cut 85% of the shipper's time of data inputting work in order to receive an insurance certificate....When one block was attacked and rewritten, the tampered block was not distributed to other nodes and it became obvious that there was inconsistency compared to the other nodes. It also showed that the whole blockchain system still worked with the legitimate data even though one node was attacked," Tokio Marine explained (Allison, 2017).
With respect to blockchain implementations in the pharmaceutical sector (Blockverify and BlockRx, for instance) that aim to prevent from illegitimate pharmaceuticals from reaching patients and causing harm. Dioni Nespral says (translated by Spanish to English by Ignacio Lopéz del Moral): “Each time a drug is manufactured, a hash is generated, which allows to authenticate the origin of this item. This hash provides all the information related to its manufacture and components. In addition, each time an agent interacts with that drug, another hash is linked to the previous one with more information, with total traceability” (Preukschat, 2017).
Are there any working blockchain implementations in supply chain logistics?
Yes. There are a number of very interesting blockchain implementations in the transport, logistics and supply chain sector, presented below:
Blockfreight is a new end-to-end blockchain system for global cargo shipping. It is the product of an Australian- based research company, tasked to develop a solution to the primary pain points in cargo shipping that requires the manual matching up of bill of lading with letters of credit and other settlement mechanisms. Blockfreight’s solution consists of three (it’s the magic number) key elements:
• Smart contracts to securely, permanently de ne the bill of lading, terms of payment and other key elements to a completed cargo shipment, built on the Ethereum blockchain.
• A tradeable token built as a counterparty asset, which is secured by the bitcoin blockchain. This token pays for the transaction fees and e ectively eliminates spam on the decentralised system.
• Storage of the bill of lading and other documents too large to t into a bitcoin block using the IPFS (Inter Planetary File System) protocol (Blockfreight, 2017)
Hijro is the financial operating network for global trade powered by distributed ledger technology. Built on distributed ledger technology, the Hijro Network acts as a global “fabric” for trade; it provides partners and network participants with a secure and efficient way to move value and assets around the world by tokenisng, transferring, and trading different types of digital assets between financial institutions (Hijro, 2017).
The CharTered InsTITuTe of LogIsTICs & TransporT 29
BLOCKCHAIN