Dive Brief:
- As of this week, any shipper or carrier submitting verified gross mass (VGM) data to Kuehne + Nagel's (K+N) VGM Portal is using blockchain technology to do so, the freight forwarder announced Monday.
- The technology was built as a partnership between the freight forwarder's seafreight team, its internal IT team and "resources from one of our strategic IT partners," Karl Olaf Petters, K+N's head of corporate communications, told Supply Chain Dive via email. It will handle 800,000 transactions per month.
- K+N said this is part of a number of projects testing blockchain as a solution for various industry challenges. Petters declined to provide a list of these projects, citing non-disclosure agreements. However, previous reports note one of these projects involves using blockchain to exchange electronic bills of lading.
Dive Insight:
The new technology is an update to the VGM solution K+N first launched in 2016 to help shippers comply with new regulations (SOLAS) that required shippers to, for the first time, submit the weight of their shipment before it was loaded into a vessel.
At the time, the rules seemed onerous. It requires coordination between shippers and their upstream partners to determine the exact weight of shipments from the moment they leave a facility to reach a port. The data, once determined, must then be provided to the freight forwarder or logistics provider responsible for the shipment.
The rules, meant to improve the safety of vessels at sea, required a new level of data exchange and transparency within the supply chain. Blockchain, in hindsight, seems like a natural fit.
"The list of promises related to the use of blockchain in the logistics industry is long, but actual real-world applications are hard to find," K+N CIO Martin Kolbe said in a statement.
Building blockchain technology into the freight forwarder's existing portal provides an opportunity for K+N to test the technology in-house and with a high number of transactions and players involved.
"We selected VGM because it is a reasonable use case; there is security-related information that multiple parties have to trust and work with, e. g. carrier, terminal, and for worst cases even insurance and legal authorities," Petters said.
All the players are highly sensitive about the security of their data, adding an opportunity to show blockchain can be used in a way that both protects private information and adds transparency into the supply chain.
"The second argument for selecting VGM is that the currently existing blockchain technology is mature enough to capture the underlying complexity and volume in an existing real-world production environment," Petters said.
