By Keith Norbury
Blockchain, the technology behind cryptocurrencies like Bitcoin, has the potential to revolutionize the transportation of refrigerated and temperature-controlled cargos. Its promises include verifying that temperatures remain at prescribed levels throughout the cold chain, and tracking perishables from harvest to consumption, thus ensuring sustainability. And, as with the transport of other cargos, blockchain also promises efficiency in settling disputes, processing insurance claims, and paying invoices.
“Very early days”
“There are people testing the waters, particularly around some of the retailers doing some proof of concepts on blockchain to pay vendors, and transportation providers to ensure they’ve kept things at temperature,” said Elizabeth Baker, a senior manager in supply chain, consulting strategy and operations for Deloitte Canada. “But it’s very early days.”
Those scattered proof-of-concept tests include a 22.5-mile truck shipment of frozen food in Florida last fall. Other transportation modes are also experimenting with blockchain. Computing giant IBM is collaborating with ocean carrier A.P. Moller-Maersk on a blockchain platform called TradeLens that includes Canada Border Services Agency among its partners. This March, Microsoft reported on its website that it has partnered with Cargo Community Network “to introduce the world’s first blockchain-based air cargo billing, costing and reconciliation system.” (The system was launched at the 13th annual International Air Transport Association World Cargo Symposium in Singapore.) Several railways, including Canadian National, have joined the Blockchain in Transportation Alliance, an organization of nearly 500 members in more than 25 countries, notes the alliance website.
“We’re really just in the research stage right now with it,” Kerwin Belle, CN’s commercial manager for the cold supply chain, said in an interview. The railway has assembled a team in Brampton, Ont., to look at different systems and technologies “to support the staff in their day to day operations,” he added.
CN’s ReeferTrak system already enables real-time temperature visibility inside its 53-foot CargoCool containers, a spokesman told Canadian Sailings last year. “I think that a lot of what the R&D team is doing is trying to understand how blockchain could help benefit us in being able to have that information readily available,” Mr. Belle said. For example, it might enable assessment of a product in transit, as it arrives at a customer’s dock, or even looking at the history of the product’s movement. “We’re doing it today,” he said of temperature monitoring. “Can this help us do it better?”
Canadian Pacific Railway, meanwhile, appears in no hurry to jump on the blockchain bandwagon. “Blockchain is still in its infancy,” Jonathan Wahba, CP’s Vice-President of intermodal sales and marketing, said by email. “CP would need to see all participants in the supply chain aligned behind blockchain before instituting it for TempPro services.” (TempPro is a trademarked service for perishable products that CP launched in early 2018.)
“Supply chain traceability”
Deloitte has its own blockchain group and in November 2017 published a white paper, subtitled “Using Blockchain & Internet-of-Things supply chain traceability.” The paper even provides a succinct explanation of what blockchain is and how it works: “Technically, a blockchain is a digital, distributed transaction ledger that is stored and maintained on multiple systems belonging to multiple entities sharing identical information. This creates a web that shares the responsibility of storing, maintaining, and, more importantly, validating the information present on the blockchain.”
Ms. Baker was a presenter at the Cold Chain Summit held in conjunction with the Cargo Logistics Canada Conference this February in Vancouver. She spoke about how “Internet of Things (IoT) solutions are connecting digital and physical worlds in innovative ways — with breakthrough business results.” IoT is related to blockchain because it provides the sensors that deliver the information to the blockchain to do its work.
“It was more focused on the blockchain and how the distributed ledger platform can be used to connect the Internet of Things across different users,” Ms. Baker said of her presentation. That included a discussion of the sensors used to collect the data stored in the blockchain and how those sensors are becoming much more affordable. “It’s easy to attach them to trailers, tractors, containers, and monitor temperature throughout,” Ms. Baker said. She even brought a few sensors, about the size of her hand, to the summit. They communicate using cellphone towers but can also be set up for wifi or bluetooth “depending on what the need is.”
So far, she hasn’t seen blockchain applied specifically to cold chains. However, it is starting to be used in other supply chains, such as tracking diamonds, she said. That’s to ensure the diamonds are sourced ethnically and aren’t so-called blood diamonds. Another promising area for blockchain is tracking pharmaceuticals, which do often require refrigeration or rigorous temperature control. “I think that the big piece is that there’s potential to improve supply chain transparency and traceability, and reduce costs,” Ms. Baker said. “Because if you are getting data that’s flowing from system to system, from the different players of the ecosystem automatically, then you have fewer people entering data (or) looking for data. It makes analysis easier because you’re actually analyzing data as they flow through the system, and making decisions in real time.”
One promise of blockchain for refrigerated supply chains is that “you can have it so that your system automatically pays invoices where the temperature was controlled throughout,” Ms. Baker said. “The system flags where temperature was an issue, and then you have someone looks at those elements.”
Reefer truck tests blockchain
In October 2018, a Florida company, Arel Trucking, employed blockchain in a 22.5-mile shipment of frozen food from Medley, Fla., to Sunrise, Fla. Another Florida company, dexFreight, developed the decentralized logistics platform that enabled a “smart contract” to release funds through Bitcoin upon delivery. That the cargo was frozen foods was incidental to the test. This particular proof of concept didn’t monitor any attributes of the cargo itself, said dexFreight CEO and co-founder Rajat Rajbhandari. But it could have.
“We could have monitored the temperature or the humidity or whatever the customers needed,” Mr. Rajbhandari said. That information would then have been sent to the blockchain, where those measurements would be recorded in such a way that none of the parties could dispute their veracity.
“It was not about the distance or the content or the size of the pallet,” Mr. Rajbhandari said. “It was more about understanding the workflow and where we can improve our platform in terms of how it will interact with the users on the ground.” He said dexFreight is in talks with a company that performs remote cold chain monitoring to test how to integrate its system with dexFreight’s smart contracts. However, those discussions haven’t yet borne fruit. Nor has the company done any further tests since the one in October, which Mr. Rajbhandari said was primarily about calibrating the platform. “We have other tests planned but it’ll be mostly full truckloads,” he said. His company’s platform is an application that sits atop a smart contract blockchain application from Argentina-based RSK Labs, which in turn sits atop of Bitcoin.
Layer 2 solution over Bitcoin
“The Bitcoin blockchain itself does not store the smart contract. It’s the other company. So we call that a layer 2 solution over Bitcoin,” Mr. Rajbhandari said, adding later, “We use RSK’s blockchain to send our transactions and smart contracts.”
In theory, dexFreight could be used for other modes of transport, he said. “But if you are talking about ocean carrier or air carrier, documentations and stuff like that are pretty complex compared to full truckload.” He described a smart contract as “a contract that triggers either a payment or some other asset transfer.” For example, the contract could specify that a shipment be picked up during a specific time window, delivered during another window, and that payment would be issued by a specific date. “All that would be coded in the smart contract. Then when the smart contract receives a proof of delivery, it will automatically trigger that payment to the carrier,” Mr. Rajbhandari said.
An affiliate of Ontario-based trucking company Polaris Transport Group is also getting into blockchain in partnership with IBM, which had used its use case to build a distributed ledger, said Dave Brajkovich, chief technology officer for Polaris and a spinoff firm called North Star Digital Solutions Inc. “We’re running POCs, or proof of concepts, before we launch anything new (into) production,” Mr. Brajkovich said.
Despite its cool-sounding name, however, Polaris has no reefer units in its fleet of about 135 trailers. It doesn’t do refrigerated transport. “However, we do have connections with many partners that can manage that,” Brajkovich said. While the company has some warehousing with refrigeration capabilities, Polaris primarily engages in less-than-truckload shipping, mostly dry goods and occasionally hazardous materials. It also does third-party logistics. About three-quarters of its business is in the U.S. “But we’re going into other verticals as well, utilizing technology such as machine learning, AI (artificial intelligence), robotic process automation (RPAs) and of course Blockchain, or distributed ledger,” Mr. Brajkovich said.
Shared in the cloud
He prefers the term “distributed ledger” to distinguish the technology from the blockchains associated with cryptocurrencies. Basically, the North Star blockchain utilizes tools like Enterprise Resource Planning systems (ERPs) to share information in the cloud. “So we have distributed ledgers that have smart contracts between two parties, three parties,” Mr. Brajkovich said. “Whatever parties are joining within that distributed ledger, the smart contract portion of it is basically handshaking to do the transactions in the cloud.” The idea is “to manage all of our shipments from cradle to grave, or from order to cash, throughout the distributed ledger,” he said.
Running the data through application programming interfaces, or APIs, which connect to the distributed ledger, will mitigate any human error possibilities, he said. It will also enable “interface visibility” for any partners North Star allows to access the system. Coupled with that, North Star will align IoT devices to do such things as monitoring trailer capacity, as well as safety features like brakes, lights, and tires. “Again, not monitoring temperature, although we could,” he said, adding later, “Let’s say we did decide at one stage to go into refrigeration, we could simply expand that technology and those APIs.” For example, IoT sensors could send data to the distributed ledger “and give back real-time values of temperature-controlled requirements that could potentially be hazardous,” Mr. Brajkovich said. “Or if at some point it falls below levels of acceptance, you could intercept that data before it actually reaches the destination, and already have a plan to either dispose of goods or isolate them from a containment perspective.”
“Farm to fork” tracking
It is even possible to track goods from the time of their production to final delivery — an example of which is called “farm to fork,” which is also the thrust of IBM’s Food Trust blockchain system.
In 2016, a U.K. company, Provence, ran a pilot project in Indonesia in which tuna fishers registered each fish they caught on a blockchain-based app as they soon they landed it, according to Global Trade Review. The system, because of blockchain’s invulnerability to tampering or counterfeiting, verified that the fish were caught in a legal and sustainable way. More recently, Bumble Bee Seafoods is using blockchain in the same way, Fortune magazine reported this March. “Mislabeling and fraud are rampant problems in the seafood industry,” the article noted.
Walmart and Sam’s Club, meanwhile, sent a letter last fall to their suppliers of leafy greens asking them to use Walmart’s block chain technology all the way back to the farm. That action followed a large outbreak of E. coli in romaine lettuce earlier in 2018. Walmart expects all the suppliers to have the systems in place by this fall. “First and foremost, the big driver of blockchain is traceability all the way back, and understanding where it was manufactured and where and how it travelled through the supply chain,” Mr. Brajkovich said.
TradeLens, the blockchain collaboration of A.P. Moeller-Maersk and IBM, processes more than 10 million events every week, according to the TradeLens website. Its “ecosystem” of more than 100 organizations — such as ports, carriers, terminal operators, freight forwarders — includes Port of Halifax and Agility Logistics. Canada Border Services Agency announced in October that it has agreed to pilot TradeLens. While CBSA declined an interview request, spokesperson Jayden Robertson did answer emailed questions.
CBSA testing TradeLens
CBSA expects to begin testing the platform this spring, Mr. Robertson said. “The pilot project will allow CBSA to determine what role, if any, the TradeLens platform could play in its business processes,” he said. Specific desired outcomes would be “improved data quality and security, transaction transparency, and increased availability of information,” he added.
Asked what special challenges cold chain cargos pose for CBSA officers and how blockchain might address those challenges, Mr. Roberston said, “CBSA strives to process and facilitate legitimate trade in a timely fashion while ensuring inadmissible and high-risk goods remain out of Canada. The management of refrigerated or otherwise perishable shipments is one of the challenges of logistics. Blockchain may help make information available earlier and in a more organized manner, for instance, if all related documents were to be provided on the same platform (declarations, permit, certificates, etc.). The use of blockchain by cargo handlers could help ensure the integrity of the cold chain, although it would be dependent on all trade chain members participating and providing accurate information to all downstream partners.”
In a news release announcing CBSA’s participation in the TradeLens pilot, CBSA president John Ossowski said that the system might result in “a faster and more reliable national supply chain, which could positively impact Canada’s economic output.” Asked how TradeLens would improve those supply chains, Mr. Robertson noted, “As the technology theoretically allows managed access to the ledger, its distribution, and its encryption, a platform based on blockchain technology, like the one used for this pilot, is expected to add a level of security, from a holistic perspective (i.e., taking into account all of the players in the trade chain continuum). Transactions on the ledger are also unalterable.”