Blockchain expands role in global trade and logistics
Blockchain technology can make global trade and supply chain processes more transparent, reduce inaccuracies, and digitise information, said Jack Muhs, regional president of FedEx Express Middle East, Indian Subcontinent and Africa.
Most importantly, he noted that with consumers becoming increasingly concerned about where, how, and when products are manufactured and delivered, blockchain technology can provide proof of authenticity and reduce counterfeit items. This helps to build trust between industries and their customers.
“Today we see companies across industries introducing different blockchain systems with their own protocols,” he said. “The UAE can participate in, and advocate for a consistent approach to enable these systems to ‘talk’ to each other, as interoperability between different systems is key to unlock the potential of blockchain technology in global trade. The lack of common industry guidelines and rules have become a challenge for widespread adoption within the logistics and transportation industry.”
Additionally, Muhs noted that participating in global blockchain programs and initiatives with other countries will create and encourage adoption of standard policies to govern the use of blockchain. This will help the logistics and transportation companies in the UAE test the use of blockchain in areas such as managing payments, settling trade claims, automation of contract terms between exporters and importers, which will help make global trade entirely digital, much more simple, and time and cost efficient.
FedEx is part of the Blockchain in Transport Alliance, and is closely working with industry leaders to create standards for blockchain use in the logistics and transportation sector. FedEx also launched a pilot program to use blockchain technology for storing data which will help with dispute resolution. Blockchain technology additionally helps in verifying the origin and quality of products, and the information cannot be edited or replaced. It can be used across industries, from retail to healthcare, and finance to media. According to a report presented in May 2021 by Reportlinker, the global blockchain technology market size is expected to reach $72 billion by 2026.
“Blockchain is not used to buy goods, but to capture, store, and share information,” Muhs exlained. “For example, imagine how Covid-19 vaccines are manufactured in one country and shipped to another. In this scenario, there are multiple parties involved – including the manufacturer, the logistics service provider, and the healthcare facility. Given the temperature sensitivity of the vaccines, and to ensure its quality and safety is not compromised from production to delivery, a blockchain system will create a transparent connection among the parties involved through exchange of information.”
He added that all parties are responsible for recording information from the type of ingredients used, production processes and dates, storage temperature, to shipping details, in one central digital location. Every piece of information uploaded to the blockchain system is time-stamped to maintain its accuracy. This information will help the healthcare facility to track the status of vaccine batches as they pass through the custody of the manufacturer to the logistics services provider and is finally delivered to them.
“All parties involved can be part of different blockchain systems provided they follow the same rules and are interconnected, which is necessary to store, access, and verify information related to the authenticity and credibility of the vaccines,” Muhs said.
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