SmartLog speeds up logistics with Blockchain

European Union-funded project aims to show how blockchain technology can create a platform to improve logistics and bring benefits across the whole industry

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SmartLog speeds up logistics with Blockchain SmartLog will create a blockchain-based platform that all stakeholders in logistics can benefit from, says Lammi.
By  Mark Sutton Published  May 5, 2018

Blockchain technology is being investigated across almost every sector today, with public and private sector alike looking for ways to leverage the potential of distributed ledger technology. Across every type of vertical there are projects coming together to utilise blockchain in ways that can bring massive improvements in efficiency, or change processes altogether.

Many of these ideas will be on show in the Future Blockchain Summit in Dubai in May, including a project from the Baltic region, funded by the European Union’s Interreg Central Baltic program, which aims to increase efficiency and automation in logistics and supply chains for the benefit of the whole sector.

The SmartLog project has been created as research and a proof-of-concept into how blockchain can enhance the information flow around supply chains, and remove inefficiency, to ultimately reduce cargo transport times. Six organisations from four countries are involved in the project — Kouvola Innovation Oy as the lead partner from Finland; Tallinn University of Technology, Valga County development agency and Sensei OÜ from Estonia; Örebro Region from Sweden and Transport and Telecommunications Institute from Latvia.

Mika Lammi, Head of IoT Business Development for Kouvola Innovation Oy, explained that the project came about from early discussions on how the concept of blockchain could be applied to IoT. For the SmartLog project, the aim is to address “enormous” inefficiency in supply chains.

“Cargo units are moving as efficiently as the surrounding infrastructure allows them to move. The information pertaining to the moving of the units, as we discovered, is moving very much less efficiently, and the possibilities to affect that are very much less costly and time consuming,” Lammi said.

The information challenge for the logistics sector is not that the information doesn’t exist, but that there is a lack of communication between logistics providers. Each logistics provider has its own highly-fragmented silos of data, but there is little communication between stakeholders, and the situation is further complicated by their use of different standards, different channels of communications and different EDI formats.

The concept behind SmartLog is to create a platform on blockchain which will be able to store all of this logistics data, down to the level of individual containers, and then process the data in a secure fashion which allows the relevant parties to see the data, while hiding it from other parties who it is not relevant to.

“The benefits involved with sharing your operational messaging flows through blockchain are various, and depend much on the company’s role in the supply network,” Lammi said. “For example, the end customer, towards whom the goods are being transported, will have enormous benefits based on the advance information on when the goods arrive — be they for manufacturing or retail purpose goods. Another kind of benefit can be realized by the actual operational transport companies, who using the same kind of enhanced advance information can manage their assets and resources with much greater accuracy.”

The SmartLog platform uses the Hyperledger 1.0 framework as its codebase, and can accept inputs in Universal Business Language (UBL 2.1), a standard for XML data for business documentation, or through conversion from common EDI standards. The messages which are being entered into the blockchain will primarily focus on the movement and status of the transport containers as they pass along the supply chain. By adopting this framework, any provider who has existing logistics systems utilising UBL 2.1, or the de facto industry standard EDIs, can easily connect to the platform and share and access the data related to their shipments, creating an additional flow of data across the whole supply chain. Messages will be encrypted before the writing process initiates, with decryption restricted to only the relevant stakeholders for each part of the process — if a shipment is not related to the user, the data will not be visible at all. Data is primarily intended for machine-to-machine (M2M) rather than human use, although tools will be built to allow human reading and interaction of the data.

Lammi explained that it is important to understand that the SmartLog blockchain is not intended as a product or service to benefit one commercial user, but more as an industry platform that creates a trusted source of data that can be used by all participants for their own purposes.

“The way we have started to view the SmartLog blockchain is that it is much more a component of platform ecosystem, than it would ever be a product or service as such. This positions it as a radically new way of distributing and consuming meaningful information, and not as such easily comparable to information management systems used by large logistics companies.

“Our blockchain’s core functionality is to act as an information faucet, to which those systems and many more can connect to, and utilize the much vaster sea of data available through it. Everything else — the additional value generation based on the actual message content — is something which will be handled by third party software attached to it, not as a part of the blockchain itself.”

This approach of using all existing infrastructure will extend to including data from whatever devices are being utilised in the logistics infrastructure, such as GPS locators and RFID sensors, within the limits of UBL 2.1-based data model.

Lammi added that the project will increase the quality of information across every level of the industry, by supporting UBL as a standard.

One of the biggest potential benefits that SmartLog will provide is that by providing stakeholders with real-time or near real-time, trusted, and structured data, stakeholders will be able to develop a much greater degree of automation of processes. Users will be able to create smart contracts, where once the data signals that certain conditions have been met, then other predetermined actions can be triggered automatically, resulting in much quicker processes.

“Once you can trust the integrity of the information, you can start acting on it without too much amount of human intervention or supervision,” he said.

The SmartLog project is well underway, and the team has learnt a lot about developing blockchain applications on top of the Hyperledger Fabric 1.0, Lammi said. As the project aims to ramp up with more companies involved in testing, he expects the platform will be able to scale and to allow for near-real-time performance metrics. The SmartLog project is also looking to expand to investigate how artificial intelligence can be used to extract value from the very large volume of data that the platform is expected to generate.

The initial goal for the project is to speed up throughput of the Baltic transport corridors by 5%, and Lammi said that the expectation is that the benefits will go beyond just faster cargo movement: “Time reduction can be seen as an added value factor by some, where time accuracy is more critical to others. What we want to do is to provide a platform which can be used to add value to most if not all processes — by the way of enhancing the way which messages are relayed and processed.”

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