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Infra, logistic firms take to blockchain to automate processes

Disrupted digitally, global and national infrastructure and logistic firms are dipping into block-chain technology to ease supply-chain complexities and cut inefficiencies.

Indian logistics players Mahindra Logistics and JM Baxi Group have partnered with IBM to develop blockchain technology. While global ports and shipping conglomerates like the Belgium-based Antwerp Port and the Denmark headquartered Maersk have already invested in the technology, home-grown Essar Ports is exploring the option.


These businesses invariably involve highly complex transactions between multiple stakeholders, involving contracts that could stretch to months or years. Blockchain technology is proving to be a game-changer in this space as it enables smart-contracts between players automating the processes of purchases, cutting time and cost. Storing all product information at a single ledger also dramatically improves transparency, cutting inefficiencies and risk of tampering, challenges the supply chain industry is so prone to.

Mahindra, IBM tie up

Mahindra Logistics, which is using blockchain technology to authenticate businesses of auto components and spare part suppliers for Mahindra’s automotive division, wants to expand it to spare parts suppliers of other companies.

“To start with, the technology is only for Mahindra and Mahindra vendors, but we want to bring in other auto component/spare part vendors as well. We are doing it as a project with IBM” Pirojshaw Sarkari, CEO of Mahindra Logistics, told BusinessLine.

Explaining an instance of how the technology works Sarkari, said “There are auto component manufacturers, who are supplying to Mahindra’s auto division; Mahindra Finance is financing them (part suppliers) and Mahindra Logistics is picking up goods from the auto component vendors and delivering to Mahindra’s automotive division. The vendors get paid only once the products get delivered. When we pick parts, how are we to check whether they have a proper business? Blockchain helps us authenticate faster.”

In fact, fraud, fictitious pick-ups and cargo thefts are fairly common in the supply-chain industry and have only risen in the last few decades since trade and commerce have become more globalised in nature. While there is no exact estimate of how much business is lost to cargo theft globally, industry experts peg it in the range of staggering $30-56 billion. Such losses might be making the end consumer cough up 20 per cent more.

Marc Van Peel, Chairman of the Antwerp Port Authority, which has invested in a blockchain technology platform called NxtPort, said that several logistics players are taking part in its project. “It requires a lot of trust of the stakeholders as they have to share data about the whereabouts of cargo in the supply chain. The port has to assure the players that competitive data will not be available to participants,” he added. Essar Ports Managing Director and CEO Rajiv Agarwal said that blockchain is the new buzzword in the industry and they are open to it.

Global trade body

The technology has become large enough to have merited a global trade body named Blockchain in Technology Alliance which strives to develop common standards in blockchain use.

Early this year, AP Moller Maersk partnered IBM to build a blockchain technology-based trading platform.

Source: The Hindu