UPS said Tuesday that it's joining the Blockchain in Trucking Alliance (BiTA), a business consortium that aims to spur development of blockchain technology standards for the logistics and freight industries.
Blockchain, best known as the technology behind bitcoin, is a distributed, encrypted database architecture that is considered immune from tampering. In a nutshell, a blockchain logs data on a network and stores them in blocks that are linked and secured by cryptography.
UPS posits that blockchain technology will play a key role in the smart logistics network of the future, keeping record of not only digital currencies but also physical assets like transportation containers.
However, the technology currently lacks the necessary industry standards and inter-company collaboration to make blockchain systems applicable to global trade and finance.
"Blockchain has multiple applications in the logistics industry, especially related to supply chains, insurance, payments, audits and customs brokerage," said Linda Weakland, UPS director of enterprise architecture and innovation. "The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders."
Among a bevy of use cases, UPS cited customs brokerage as one of the primary applications of blockchain within its own business. UPS is one of the world's largest customs brokers and a key objective in its brokerage strategy is to digitize transactions. With blockchain, UPS said it could improve transaction accuracy by replacing paper-heavy, manual processes, while at the same time improving security and efficiency for shippers going through customs brokerage.
In addition to UPS, current members of the BiTA consortium include telematics company Fleet Complete, P&S Transportation, Bridgestone, Convoy, and UPS subsidiary Coyote.
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