FedEx partners with BiTA to create transparency and security through blockchain
Blockchain for logistics is the talk of the town, with multinational corporations pushing for pilot programs and undertaking initiatives to gain leverage in the market space. FedEx, being a global leader in logistics and as a company known for its eagerness to innovate and stay ahead of the curve, has joined Blockchain in Transport Alliance (BiTA).
FedEx has its reasons to keep a tab on technologies that can usher greater transparency and data security to logistics processes. The company comes into the blockchain sphere in the wake of a high-profile cyber attack on its TNT express branch in Europe last year. Reports indicate that the integration of TNT into FedEx operations would cost the company a whopping $1.4 billion over the next four years – a number that was revised from an initial forecast of $800 million.
FreightWaves spoke with Dale Chrystie, vice president of strategic planning & analysis at FedEx Freight, and Kevin Humphries, senior vice president of IT at FedEx Services earlier this week, about the prospects of blockchain and how they look at FedEx’s association with BiTA.
“We are proud to be a founding member of BiTA and the BiTA standards board, because we want to work on developing common standards around blockchain technology in the transportation industry,” says Chrystie. “We continually try to enhance the customer’s experience, and blockchain is tied to that. We try to make it easy for our customers to do business with us. Since the technology is around making data more secure and transparent, we see that it holds a lot of promise.”
“FedEx has a long history of innovation in the logistics space since the beginning,” adds Humphries. “One of our focuses has always been to find innovative ways to provide the kind of visibility that our customers need to get all the information up and down the supply chain. And blockchain is opening the door to that by giving customers even more visibility to their package before it gets in our hands and after it leaves our hands.”
By many counts, the blockchain revolution cuts parallels to the time when people woke up to the idea of the internet. Companies have realized the amount of data that supply chains create every day and the potential of the existing data pile they are sitting on. In that regard, safety and transparency of data are of utmost importance, leading to the significance of blockchain.
“We have millions of records a day in our system, and we think of blockchain as a secure chain of custody that could transform the logistics industry. We believe it holds a lot of promise in that space and would streamline all that data exchange in a very secure way,” explains Chrystie.
“The nature of the distributed ledger and having common definitions & standards is something that is applicable from origin to destination in the supply chain. So we are pretty hopeful that blockchain will have many use cases,” adds Humphries.
FedEx is also looking to work on some blockchain pilot programs, with some of them already underway. “Our early work is in dispute resolution, where we have customers both upstream and downstream from us, trying to speak back in a common language. We are trying to determine if that data is common and in some cases, we as carriers, don’t necessarily have all the data that we would like to have,” notes Chrystie. “And if we could agree on these elements and standards, we think we can drive a lot of efficiency in the process, and that’s just one example.”
FedEx is developing a few pilots to make sure it has an edge in the technology. Pilot programs help the company grow its knowledge on technology implementation across different platforms and also in understanding its scalability and performance characteristics, believes Humphries.
Although blockchain is still in its nascent stages of growth, it looks like it is here to stay. “I would foundationally go back to the fact that it is innovation,” concludes Chrystie. “Innovation is in our DNA at FedEx. We have been at the cutting edge for decades, and at this point, we think blockchain is a fantastic technology coming along, and we certainly want to play in this space.”