WEF offers logistics industry-created blockchain 'toolkit'

WEF offers logistics industry-created blockchain 'toolkit'

Blockchain advocates argue technology fits well with the decentralized and multi-party nature of global supply chains, but some in the industry still view distributed ledger technology as an overhyped solution in search of a problem. Photo credit: Shutterstock.com.

The World Economic Forum (WEF) on Wednesday has pulled together more than 100 supply chain organizations and experts — including the world’s largest ocean carrier, a host of global ports, and a handful of shippers — to build what it calls a “toolkit” to help companies manage the complexities of deploying blockchain technology.

The toolkit, which WEF project lead Nadia Hewett referred to as a living document, is intended to help supply chain stakeholders that feel overwhelmed by the proliferation of blockchain-based solutions coming to market. Blockchain, also known as distributed ledger technology, is a heavily encrypted and decentralized database designed to provide greater levels of data trust.

Inclusivity through information

Blockchain advocates have posited that the benefits of the technology match well with the decentralized and multi-party nature of global supply chains, but blockchain has also been viewed skeptically by some of the industry as an overhyped solution still in search of a problem.

“This is designed to cut through the hype and help organizations responsibly deploy blockchain,” Hewett told JOC.com. “We’re not creating another standards association or technology solution.”

Among the organizations participating in the development of the toolkit are Maersk Line, Hitachi, Mercy Corps, Korea Customs Service, supply chain planning software provider Llamasoft, and the ports of Los Angeles, Oakland, Valencia, and Rotterdam.

The broader goal of the project, called Redesigning Trust: Blockchain for Supply Chains, is to democratize access to information typically confined to larger organizations with the budget to hire consultants to counsel them on developing technologies, Hewett said.

“Companies are volunteering their expertise to benefit everybody,” she said. “Part of this is to get to a place where we can be more inclusive as to how the technology is used. The aim is to create guidance for companies that typically wouldn’t be able to afford the consultants to help them understand.”

That’s important, as the value of a given blockchain grows as more parties participate. Other bodies that have emerged in the past year — such as the Blockchain in Transport Alliance (BiTA), the UN Centre for Trade Facilitation and Electronic Business (CEFACT), and, more recently the ocean carrier standards-focused Digital Liner Shipping Association (DCSA) — are trying to build consensus around blockchain data models to help foster that critical mass.

“Our focus is not on recreating that work,” Hewett said. “The nature of the technology is that it’s distributed. More than any other technology, that scale and network effect is much more important. If you’re so hyper focused on your own efficiency gains, you can be hurting the efficiency of the ecosystem.”

Consorting with competitors

Another way to boost that network effect, which the WEF group is also targeting, is by helping to build intra-industry consortiums, similar to one that emerged in 2018 between four of the world’s biggest agricultural shippers.

“Deloitte [which is participating in the WEF project] said last year you’ll see more and more industry-led coalitions,” Hewett said. “How do you ensure it’s mutually beneficial and well-designed? It’s not easy to come together as competitors.”

In terms of specific areas in which the framework is intended to aid supply chain stakeholders, she pointed to guidelines the group has developed around system interoperability, data privacy, data security, and inclusivity of solutions (meaning that the solutions allow other parties to participate). WEF also highlighted the geographically dispersed nature of the project participants to ensure the guidelines don’t have a purely Western focus.

The project has already released two white papers: an introduction to the initiative and another focused on digital identity verification. WEF said it plans to release monthly papers highlighting different aspects of blockchain in supply chain deployments.

Contact Eric Johnson at eric.johnson@ihsmarkit.com and follow him on Twitter: @LogTechEric