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Lawmaker predicts 2019 “the year of blockchain”

U.S. REPRESENTATIVE TOM EMMER. CREDIT: JOHN GALLAGHER/FREIGHTWAVES

U.S. REPRESENTATIVE TOM EMMER. CREDIT: JOHN GALLAGHER/FREIGHTWAVES

On the first day of this year’s DC Blockchain Summit in Washington, D.C., concern that a heavy-handed approach from the federal government could stifle blockchain innovation in the United States was lessened by the regulators themselves, who told attendees that they generally support allowing the technology to flourish.

That message was reinforced on day two of the conference, when U.S. Representative Tom Emmer (R-Minnesota), a lawmaker who has taken on blockchain as an issue on Capitol Hill. Emmer, who co-chairs the Congressional Blockchain Caucus, predicted that 2019 “stands to be the year of blockchain, the year we separate hype from reality, and begin harnessing blockchain in the right-use cases to lower costs and increase efficiency,” he told attendees on March 7.

But he also emphasized the need for coordinated government oversight. “Congress has a clear role: we must insure that regulation is simple and precise,” Emmer said. “If a patchwork of regulations emerges, the industry will suffer, and prove government to be ineffective. This confusion will undoubtedly lead to more regulation, which will only stifle the innovation and potential application of the technology.”

The financial stakes were highlighted during the conference when it was noted that there’s $130 billion in value currently being stored in public blockchain networks, and that 10 percent of the world’s GDP is expected to be stored by 2025.

Emmer commended the Chamber of Digital Commerce for releasing its National Action Plan for Blockchain, which calls for a pro-growth regulatory approach to developing blockchain technology in the U.S. The document specifically mentions how the technology is already being applied in supply chain networks for tracking food safety.

“The National Action Plan also provides a needed call for clear regulation before enforcement. Although regulators of blockchain and cryptocurrency have been significantly restrained and have allowed innovation in this space to flourish, we’re currently operating under ‘regulation by enforcement.’ Regulators must provide clear rules of the road to ensure that even the smallest start-up with a brilliant idea can become a major enterprise.”

Emmer said he’s doing his part to speed the growth of blockchain in the U.S. through his Blockchain Regulatory Certainty Act, a bill he introduced in January. The legislation ensures that blockchain developers that never take control of consumer funds do not need to register as a money transmitter in the states in which they operate.

“Money transmitter laws were enacted to ensure the protection of the consumer entrusting another entity with their funds in order to transmit them. If no funds are being entrusted to another, it should be certain that these regulations do not apply,” he said.

Emmer also gave a favorable outlook for cryptocurrencies – the existence of which is enabled by blockchain technology – despite the surge, and then plunge, of bitcoin value over the past two years.

“Many, including those in this town, would like to focus only on blockchain and ignore or criticize cryptocurrency,” he said. “They will tell us the bitcoin is used by criminals, and the blockchain is the real innovation. It’s true there are illicit transactions. But that should not be reason to totally dismiss cryptocurrency.”

He pointed out that bitcoins represented the first use of a network open to the public and capable of letting two participants interact with no middleman.

“This is the revolutionary aspect of this technology, the idea that we can develop an open network in which we control our own data, while freely interacting with each other, and without having to trust gatekeepers. That idea could be one of the major breakthroughs of our lifetime.”

BLOC pioneers blockchain-based biofuel supply chain tracking for the maritime industry

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Though the potential of blockchain technology has captivated the logistics and transportation industry, it has remained a technology that has struggled to make it past the research desks across several niches. Then again, the maritime market has shown a positive reception to blockchain, with large container lines and related startups looking to create blockchain platforms – primarily for container track-and-trace within its supply chain.

Blockchain Labs for Open Collaboration (BLOC) is a startup that is working diligently to provide blockchain-based solutions across different verticals, with the primary goal of bridging the gap between the digital and the physical world. BLOC recently collaborated with mining company BHP, Japanese shipping company NYK, and biofuel company GoodFuels, to deliver sustainable biofuel to the BHP-chartered, NYK-owned bulk carrier – all via BLOC’s blockchain fuels assurance platform.

“We are funded by Lloyd’s Register Foundation to build blockchain prototypes in the industry within the area of risk and safety. Together with the industry, we look to build consortiums in each of the areas we are focusing on,” said Deanna MacDonald, the CEO of BLOC. “Our first prototype is in bunker tracing. We are essentially looking into how we can provide quality and quantity metric associated with bunker deliveries before 2020, and also help with traceability and transparency within the supply chain.”

The year 2020 is crucial, because next year is when the International Maritime Organization (IMO) sulfur-cap regulation comes into effect. The rule states that the bunker fuel that container lines use must not have a sulfur content that exceeds 0.5 percent – a number that is seven-fold less than the current limit. Biofuel produced by GoodFuels is one of the many ways for container lines to navigate IMO 2020 limits, because the sulfur content in biofuel is under the authorized limit.

By tracing and delivering biofuel through its blockchain platform, BLOC has achieved an industry-first, as information of the whole transaction remains embedded within the system. “While working on the pilot, we had numerous challenges coming in from the industry at-large,” said MacDonald. “We were trying to push forward the boundaries of sustainable fuel sources, and furthermore measuring decisions based more than just on the price trend, but also with regard to compliance.”

Supply and demand sustainability of biofuels is critical to keep the transactions flowing, as in its absence the application would fall through the cracks. MacDonald explained that there were challenges with bringing fuel to the terminal and into the container ship – mostly to do with coordination at the terminals, transporting fuel containers to the barge and then transferring it to the vessel operators.  

“We also had to make sure container lines were willing to restructure their ships to suit biofuel. We trained the personnel who would be utilizing the system, those that are essentially performing the bunker fuel delivery,” said MacDonald. “We have not changed the process of bunker fuel delivery nor have we changed the human processes involved in it. It is just about putting the physical process in a digital form, and also ensuring that the information being put in the system is correct.”

Verifying data is difficult, because there can be garbage-in-garbage-out instances where false data can be fed into a blockchain system making it immutable. BLOC had to work on identifying the different information sources and delete results that were riddled with inconsistencies to ensure a seamless end-to-end transaction process.

MacDonald spoke about the need to create a standardized framework for regulating data collection, ensuring its sources have integrity, and also on fixing regulations for the utilization of gathered data.

This is a place where the open standards developed by the Blockchain in Transport Alliance (BiTA) would hold meaning, as the designed framework would act as a bedrock for several blockchain pilots that look to track shipments across different modes of transportation, including the maritime industry.

MacDonald contended that standardization was essential to induce trust in the system. This is particularly true in regard to the ability to judge the security of the system and to exchange data and assets across supply chains with unwavering faith. “That being said, I don’t think there will be a standard one-size-fits-all model that we can use to exchange data across the supply chain. Each of the applications that are developed now needs us to dive deep every single time, to define each of the features,” she said.

Columbia Transport joins BiTA

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Columbia Transport s.r.l. has joined the Blockchain in Transport Alliance (BiTA). An Italian full-service international freight forwarder serving all major worldwide destinations, Columbia Transport assists product movement from and to Italy.

BiTA is dedicated to developing best practices and standards for blockchain in the transportation industry.

Blockchain is an open, distributed digital ledger that can record and share transactions between two or more parties efficiently, securely and permanently. Blockchain enables transportation companies to more accurately track shipments, routes and trucks while providing a highly secure platform that permits faster processing and payments.

Managing Director Enrico De Luca explained that “Columbia Transport joined BiTA because we believe that the use of blockchain in the transport industry will become more and more prevalent in the years to come.” DeLuca added, “Columbia Transport has always been very responsive to the evolution of new transportation industry tools, and the company wants to take advantage of the opportunities that new technologies can offer to improve the efficiency of the processes and quality of our services.”

Oliver Haines, BiTA Vice President for Europe, stated, “On behalf of the Alliance and its members, I welcome Columbia Transport to BiTA. Columbia Transport is BiTA’s first member headquartered in Italy – and we hope it is the first of many, because blockchain technology is a global tool.”

About Columbia Transport

Columbia Transport was founded on 1982 by Giovanni De Luca, who was inspired by the Columbia Space Shuttle, the first orbiter to fly into space in 1981. The company is now led by his son, Enrico De Luca, who has 30 years of freight forwarding industry experience with the company. Enrico, together with an experienced and motivated staff, work to ensure that Columbia’s customers get the personalized service they have come to expect from the firm.

FedEx executive Dale Chrystie elected first chairman of BiTA Standards Council

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Dale Chrystie of FedEx (NYSE:FDX) was elected as the first chair of the Blockchain in Transport Alliance (BiTA) Standards Council (BiTAS), during its February Board of Directors meeting.

Chrystie, Business Fellow and Blockchain Strategist at FedEx, has been a tireless advocate on behalf of BiTA since its founding in August 2017. He will continue to help navigate the organization through its next major stages of development and growth.

“It’s an honor to be elected to this position of first chair for the BiTA Standards Council, an alliance of 500+ members,” said Chrystie. “We can all appreciate the unique moment in time we are in to capitalize on this emerging technology, blockchain. To ensure we stay focused during the next two years we will aim to publish standards in the transport space and align those standards into the full supply chain and beyond. There has been a great deal of work done to get us to this point, and I look forward to continuing our success in my role as chair.”

Chrystie has been with FedEx since 2006, holding many key roles and bringing more than 30 years of experience from the transportation and supply chain industries. Currently, Chrystie’s focus is on the utilization and optimization of blockchain technologies in the areas of strategy, business applications and aligning of companies.  

Arlen Stark, BiTA’s chief of staff, said, "I am very excited to have Dale as Chairman of the BiTA Standards Council and look forward to working closely with him during his two-year term.”

“Dale brings the broadest perspective from a transportation provider I can imagine, since FedEx has such a broad range of both services and customers, everything ranging from parcel, less than truckload and expedited to global transportation management,” said Ken Craig, Vice President of Special Projects at McLeod Software and a member of the BiTAS board. “His personal and professional insights will be beneficial for the goals of BITA. We are fortunate to have a leader with his perspective and industry breadth. Plus, he is just a great guy to work with!”

About BiTA

Founded in August 2017, BiTA has quickly grown into the largest commercial blockchain alliance in the world, with nearly 500 members in more than 25 countries that collectively generate over $1 trillion in revenue annually. BiTA members are primarily from the freight, transportation, and logistics industries. The Alliance was formed by experienced technology, transportation, and supply chain executives to create a forum for the development of blockchain standards and education for the freight industry. BiTA members share a common mission to develop a standards framework, educate the market on blockchain applications and encourage the use of those applications. For more information, please visit the BiTA website at www.bita.studio/.

ShipChain and Scanlog partner over blockchain-based track-and-trace platform

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ShipChain, the blockchain-based end-to-end logistics startup, has announced the integration of its platform with Scandinavian logistics company Scanlog, to help with the track-and-trace of Scanlog’s freight moving across the company’s global logistics network. The importance of transparency in supply chains can never be stressed enough, with businesses that deal with cargo movement across international borders particularly interested in having eyes on their freight in real-time.

Scanlog, which has been rapidly expanding its global reach, finds relevance in the ShipChain platform, because it can help monitor Scanlog’s trucks – from the pickup point to the destination. ShipChain uses blockchain technology at its core and its flagship solution – the smart contract – helps bring transparency and visibility to supply chains, with the company running a successful pilot trial program partnering alongside Perdue Farms. ShipChain’s software can be fully integrated with most of the transportation management software (TMS) systems in the market, and can seamlessly track freight across any mode of transportation.

“Our customers expect us to deliver their physical goods on time and in perfect condition, but this is only one part of our job as international transport specialists. Today the flow of information connected to the physical supply chain is of such magnitude and such importance that it requires advanced process management to deal with it timely and accurately,” said Mattias Ljungberg, the CEO of Scanlog.

“Since the inception of Scanlog six years ago it has been focused on using the latest technology to assist our co-workers with this task. The agreement with ShipChain is the newest example of our dedication to using state-of-the-art technology to create customer value, and I am very much looking forward to working closely with ShipChain to deepen our partnership further,” he continued.

ShipChain’s location sensors would be stuck to the cab of Scanlog’s participating trucks, sending out real-time encrypted GPS data to Scanlog’s on-site office, generating unique data signatures that would be stored on the Ethereum blockchain. ShipChain’s smart contracts would also be useful, because they will remove the need for a third-party to act as an intermediary for contracts struck between Scanlog and its shipper clients. The blockchain at the heart of these smart contracts etch regulations in code and store them within a blockchain framework, making them immutable and transparent to all stakeholders in a transaction.   

“ShipChain’s advanced blockchain-based logistics visibility system perfectly fits with Scanlog’s supply chain, providing visibility to Scanlog and its clients along the full journey of a shipment,” said John Monarch, the CEO of ShipChain. “We are excited to be entering the European market, and with Scanlog’s reach and volume of shipments, and our technology, we see the prospects of this collaboration as beneficial all around.”

The partnership with ShipChain apart, Scanlog has been busy adding technology to its operations. In October 2018, the company inducted ProcessRobot software from Softomotive to its back office, helping to expedite its order booking process and developing a smarter workflow. The software reduces the time spent by personnel on repetitive tasks, with ProcessRobot automating mundane operations, helping the workforce spend their time on more worthwhile tasks.