FedEx is testing the use of blockchain technology to track critical cargo, hoping to improve transparency and efficiency along the supply chain.
The courier company is working with the Blockchain in Transport Alliance, an organisation of industry leaders that seeks to establish standards for blockchain within the freight industry.
A blockchain is essentially a permanent, encrypted digital record of transactions that can be used as a ledger. Each “block” in the chain represents a batch of transactions and contains a cryptographic reference to the previous block, along with a timestamp and transaction data, making it impossible to edit the data after the fact without also editing other blocks in the chain—which would require the consensus of others in the network.
Blockchains are designed to avoid the need for data to be held centrally, or by one organisation—with all the attendant security issues and vulnerabilities—by using peer-to-peer technology to distribute the blockchain across many systems and servers. They are also generally public, in that transactions are available to view by everyone within the distributed network.
For FedEx, such a ledger could potentially cut down on disputes at every stage where there is a transaction—used not only to record payments, but also for keeping track of cargo movements and receipt of parcels.
“We’re quite confident that it has big, big implications in supply chain, transportation and logistics,” said FedEx CEO Fred Smith at a blockchain conference in New York this week. “It’s the next frontier that’s going to completely change worldwide supply chains.”