Threats and challenges for logistics: the contribution of the blockchain

Genoa - . Land, sea and air transport operators, network and terminal infrastructure managers, consolidators, insurance agents, brokers, shippers, customs authorities, etc.

The growing weight of international and intercontinental flows in the mobility of goods is not a phenomenon of today, but it appears in the long run a still very strong trend. And this despite some not negligible risks (from Brexit to the new customs duties policies of the US government), which, by the way, will be addressed in a specific session at this year’s Forum. The total import / export of goods grew from the sharpest year of the crisis (2009) to 2017 by + 60% for EU countries, + 84% for the US and + 110% for the BRIC countries despite the difficulties of Russia and Brazil. During the same period, the share of non-EU flows in maritime traffic to / from Union ports also increased slightly, from 64% to 65%, a sign that the development of traffic took place more markedly on long-haul traffic. Today 2 out of 3 tons unloaded / loaded in the ports of the 28 countries have their origin or destination outside the EU. As well known, the lengthening of the logistics chain determines the involvement of a large number of operators, in addition to the economic entities who send and receive the goods. Land, sea and air transport operators, network and terminal infrastructure managers, consolidators, insurance agents, brokers, shippers, customs authorities, etc.. This complexity has generated a number of data exchange procedures, gradually characterized by a growing level of digitalisation in order to ensure a more efficient tracking. However, this happened with the rise of a multiplicity of systems often developed only for a part of the logistics chain, with a great variety of solutions, sometimes of a proprietary nature, and influenced by the requirements imposed by the regulatory and customs authorities of the various countries. Ensuring a complete and (relatively) simple tracking of the goods exchanged along the chain, without losing information assets and without risking errors for the exchange of data from different systems, is the goal to be taken in the development of new digital solutions for the management of freight flows. By the way, as already noted in our contributions to the previous Forums, digitization takes an essential value for the integration between the different mobility solutions. At the 2017 Forum, in particular, we recalled that according to the Issues Papers prepared by the Coordinators of the European Corridors of the Core Network TEN-T, “The individual transport modes should be effectively interconnected at the appropriate nodes, physically and digitally”. The same goal of intermodality, therefore, is no longer seen through the lens of the physical connection, but also through the digital dimension. This challenge, however, faces some risks, and must therefore find suitable technological solutions to deal with them. Among such risks, we can mention:

•the multiplicity of actors involved, with non-homogeneous levels of digital “maturity” and with investments already made in the development of specific platforms or in the training of their employees in the use of them;

•the constraints imposed by the requirements defined in the individual countries / markets by the sector authorities, only partially mitigated by the action of international sector bodies;

•the need to protect against attacks from cyber-terrorism, which can find an objective of great strategic value in the end-to-end digitization of logistics processes;

•the need to develop open standards also in order to avoid the creation of new oligopolies around the technological solutions developed, for instance, by major operators or industry alliances, which may become new barriers to entry into the logistics market. In this context, blockchain technology has recently established itself as one of the most promising developments to tackle, among other things, the challenges of supply chain traceability, mitigating, at least potentially, the above-mentioned threats. The blockchain allows, in fact, the creation of a digital ledger of transactions, accompanied by a set of rules defining the methods of updating, which can take place exclusively through a mechanism of consent distributed among the participants in the system. Therefore allows the management of the so-called smart contracts that allow guaranteeing and tracing the contract between all the contractors. So there are many applications that can be developed for logistics, such as between the heights:

•Traceability and certification of the origin of products and of the whole production chains;

•Booking, management and tracking of complex services such as the E2E logistics chain, involving a large number of actors, also to correctly distribute the remuneration of the services provided by each one of them;

•Certification of transport information (e.g. for e-invoicing, customs processes, security checks, payment, financial, credit and insurance services);

•Reservation, management and tracking of limited availability resources such as vehicle and infrastructure capacity of the transport modes involved in the logistics chain. Given this promising scenario, there are some issues to keep in mind, to avoid that a technology that is born as highly interoperable and “open”, and more secure than other contract & data management systems, instead becomes a new barrier to entry into the market of logistics. As correctly highlighted in the recent report of the International Transport Forum Information sharing for efficient maritime logistics (2018), these issues mainly concern the risk of a data management market on logistic flows dominated by a few subjects - perhaps linked to the great oligopolistic transport alliances maritime systems - which could develop proprietary systems allowing the reinforcement of their oligopoly. Developments such as blockchain require significant investments in technology and training of resources, so that not everything can be conceived as based on “open” solutions. However, there is a balance to be found between open standards and proprietary systems, as the ITF report itself points out appropriately.