Consortium launches blockchain technology initiative for logistics

28 November 2016 4 min. read

More than fifteen public and private sector companies based in the Netherlands have joined forces to launch a programme that seeks to design and develop applications for blockchain technology in the logistics sector. The initiative marks, according to the founders, the first blockchain project of its scale in the logistics chain.

Blockchain – a technology which uses an open network of databases and functions as a public, digital, distributed ledger, has in recent years been heralded as one of the most disruptive technologies to hit the business landscape. The technology is in particular making an impact in the financial services industry, where it, on the back of its technological edge vis a vis existing solutions, is touted to hold the potential to reshape the face of the landscape. A recent report by Accenture for instance found that 90% of banking sector executives globally are working on blockchain plans – some more advanced than others – with payments and settlements clearing earmarked as the key areas for short term breakthrough effects. 

The power of blockchain extends however beyond the financial services realm, and across the globe initiatives are being launched to explore the potential for use cases. Blockchain has, among others, seen its entry into the consumer market space (Deloitte for example built a blockchain application that helps consumers store their guarantee receipts), the legal industry (blockchain is being used to store and identify legal documents) and real estate (startup hub CIC has developed an approach that uses blockchain to manage the process for rental contracts).

Consortium launches blockchain technology initiative for logistics

Blockchain in logistics and supply chain

Another domain that is regarded as a major opportunity for blockchain is logistics and supply chain. Benefits highlighted by experts include added transparency, traceability and security, which down the line can make the supply chain much more reliable and efficient.

In a bid to uncover the possibilities, a 16-partner consortium in the Netherlands have, under the direction of TKI Dinalog*, joined forces to study how the distributed ledger technology can advance operations to bolster efficiency and effectiveness, as well as reduce supply chain footprints. The partner group includes multinationals such as ABN Amro and Royal FloraHolland, academic institutions (e.g. TU Delft, Windesheim), major logistical players (e.g. the Port of Rotterdam – Europe's largest port in terms of cargo tonnage), professional services firms (technology firm Centric and management consultancy Innopay), and a range of other players. 

The project, which has a budget of around €2.2 million, will focus on developing the contours of a new information infrastructure based on block chain technology, uniting operational information, financial flows and contracts. If all goes according to plan, then the consortium partners expect to deliver three concrete use cases: chain financing, supply financing and circular economics. The programme will in addition concentrate on creating an open-source core business infrastructure that will make the blockchain suitable for mission critical usage.

The 16 partners of the blockchain initiative

Commenting on the launch of the initiative, Martijn Siebrand, Programme Manager Supply Chain Finance at TKI Dinalog, says, "Using blockchain technology for the financial routes in logistics is just the beginning. I see this as a stepping stone towards a logistics sector with improved collaboration throughout the entire chain."

Other organisations that are working on blockchain concepts in logistics include London-based Provenance (aims to build trust across the supply chain from the source to the consumer by deploying Bitcoin- and Ethereum-based blockchains that enable companies to be more transparent on how they build their products), BlockVerify (a firm that uses blockchain’s transparency to fight against product counterfeiting) and Kuovola Innovation (working on a blockchain solution that enables smart tendering across the supply chain).

* TKI Dinalog ('Top Consortium for Knowledge and Innovation') is a Dutch institution that focuses on structurally stimulating and realising public-private collaboration in the field of research in the logistics industry.

** The 16 partners of the blockchain initiative are: TKI Dinalog, TU Delft, ABN Amro, the SCF Community, the Port of Rotterdam, Royal FloraHolland, SmartPort, Windesheim, TNO, Centric, Exact, FBBasic & Cirmar, BeScope Solutions, NBK, Innopay and TransFollow.