Today, the technology of blockchain has gained a firm foothold in the logistics and supply chain industry. Several blockchain pilot programs have been initiated across the ecosystem by companies that are looking to improve transparency and visibility in their supply chains – a sign of healthy cynicism to have front-row seats on the blockchain bandwagon.
Though this could be assumed to be an extension of the eternal fascination that companies have towards increasing operational efficiency and the decisive fear of missing out (FOMO) factor on futuristic technology, it is essential to define blockchain’s capabilities within the industry, rather than to fall back on bland rhetoric of textbook merits and theoretical possibilities.
The Blockchain in Transport Alliance (BiTA), an association comprised of hundreds of stakeholders within the transportation and logistics sectors, was founded to comprehensively answer a simple question that has puzzled the industry for a very long time – “where is my shipment at?”
The idea of BiTA is to create a set of open blockchain standards – a framework that would act as a springboard for companies within the industry to develop blockchain-related applications. “Logistics processes are no longer within an enterprise or just within a few partners – they now span a whole network of participants across the transportation and supply chain industry. And the current systems and standards of these networks were never designed for the scenarios or are quite antiquated to cope,” said Ben Kothari, Chair of the BiTA Tracking Document Data Component Working Group.
To monitor the real-time movement of a shipment through blockchain, it is critical to define a whole array of components within supply chain entities, while also initiating stable relationships between different parties. Defining the core set of entities and creating contracts that they will work on is instrumental in helping businesses manage operations in a more streamlined and efficient way.
Kothari contended that defining every element within a transaction was critical to see progress, and that BiTA was on track to create deeper and richer definitions for entities over the course of this year. BiTA standards will help businesses understand, at a broader level, what the processes look like, the entities that operate within these processes, and the smart contracts or agreements that are built on top of them – helping companies operate without friction in a network.
“Once the definitions emerge, we’ll be able to create a foundation in terms of how these entities help in conducting transportation business, thus eventually answering the question of where a shipment is in real-time. Shipments traverse across multiple carriers, modes and channels, and creating industry standards are integral to addressing the tracking problem” said Kothari.
Kothari explained that BiTA standards are relevant to the industry, as it was the first of its kind in the blockchain space, standing alone without banking on antiquated and legacy standards. BiTA has created a niche within the shipment tracking segment by focusing on solving issues related to transportation, rather than making the standards generic to suit every industry.
“There are several standards that are very broadly defined, thus ending up losing focus on the specific set of problems that need to be solved. BiTA comes into the picture with a laser-focus on the transportation industry, which makes it distinctive,” said Kothari.
Even with tailor-made standards for the transportation industry, there have been differing opinions on the need for “openness” in such standards – such as the proprietary blockchain platforms that the maritime industry is witnessing through TradeLens, a joint venture between Maersk Line and IBM.
Kothari insisted that creating proprietary blockchain-related applications – though are valuable to the blockchain movement at-large, is not solving the issue with transparency across the ecosystem. In the end, a proprietary blockchain network owned by Maersk would be hard pressed to serve the container line’s interest, thus defeating blockchain’s promise of equal ownership and transparency among network stakeholders.
“When you restrict participation in a blockchain program, what you essentially have is a distributed or point-to-point messaging platform. That does not add any new value to the system. All you create is another siloed environment that works on integrating and translating different messaging platforms and protocols,” said Kothari. “With proprietary programs, you will not be solving any problem, but will only end up introducing an extra component to the problem.”
BiTA’s roadmap this year involves building on the foundation it laid out last week through its blockchain standards. In essence, the overall intention is to progress to the point where the industry would see sense in permanently phasing out legacy EDI systems and depending on blockchain-based solutions for tracking shipments.