How will blockchain impact hazmat? Transparency 18 offered exciting clues.

Last month I had the pleasure of attending the Transparency 18 Summit in Atlanta. FreightWaves, the event’s host, offered an unparalleled opportunity to learn what’s new and emerging related to technology and supply chain. Based on my experience there, I’m convinced the future of the logistics industry is as exciting as ever.

Since FreightWaves is also the founding sponsor of the Blockchain in Transport Alliance (BiTA), my main goal in Atlanta was to discover the latest advances in applying blockchain technology to the transport of hazardous materials.

Those advances may still be a year or more down the road, but I’m more excited than ever about blockchain’s potential for Dangerous Goods transport.

Blockchain standards need to be defined

This conference included a wonderful consortium of carriers, technology providers, 3PLS—even venture capitalists—who all see the potential of new technology for improving the supply chain. A lot of the sessions dealt with three ideas: What is blockchain? What are some use cases? How do we see it benefiting the industry?

Those are important discussions, since there are many moving parts to an efficient and effective supply chain—from procurement and planning to transport and warehousing. Blockchain has the potential to affect all the steps and handoffs involved in getting an item from point A to points B, C and D.

Blockchain is an infinite, open-source virtual ledger with a permanent record of every transaction that’s relevant to any given shipment. Each new entry builds on the code from previous entries and becomes part of the unchangeable chronological record.

It’s a great opportunity, but industry-wide blockchain standards and other issues still need to be defined. A recent Ernst & Young article noted that while regulatory complexity was cited as the greatest barrier to widespread blockchain adoption in the financial arena, regulatory changes were also the primary driver of broader integration.

Blockchain’s role in hazmat transport

Blockchain’s value, as we see it, is to give freight visibility and data to every participant within the supply chain. FedEx is testing the technology now to track large, higher-value cargo. Since transparency into a shipment’s contents is at the heart of all Dangerous Goods compliance, we believe blockchain technology could help make the hazmat supply chain both safer and more efficient.

Every time a regulated item is moved, there’s a risk transfer. We believe blockchain can help make the hazmat-related information for every shipment secure and transparent to every actor in every link of the supply chain: manufacturers, 3PLs, freight forwarders, drivers, warehousing, retailers, even emergency response personnel.

We picture each stop on a regulated item’s journey—from raw material sourcing to manufacturing plant to forwarder to carrier to end user—getting added to an immutable record that verifies compliance every time the item changes hands. And anyone in the supply chain can call up that record if they have access to the blockchain.

Think about all the paperwork, manual research and duplication that takes place every time a hazmat shipment gets handed off: DG documentation, proper shipping name, packaging components, acceptance and validation of contents, information to remediate, etc. What if all that information were available at every step along the trip?

That day may be a long way off, but we want to help make it happen.

Blockchain’s potential impact on hazmat logistics

BiTA has outlined several supply chain enhancements blockchain can bring about. I foresee specific ways each of them can impact Dangerous Goods transport.

Performance history. Parties can see solid and definitive evidence of past performance in all relevant metrics. In hazmat, that would mean identifying (and possibly avoiding) shippers with multiple DOT fines and ERIP inquiries.

Quality assurance. Everyone involved in a transaction has access to data from every point, reducing the likelihood of unsubstantiated disputes. In hazmat, that could mean lithium battery manufacturer testing, packaging certification and testing, MSDS and proper shipping name data.

Compliance. Electronic logging devices can send a nearly endless stream of data to the blockchain in real time, allowing for up-to-the-minute re-routing. For hazmat shippers, this data could extend to packaging and documentation to ensure a truck’s route doesn’t affect compliance with local regulations.

Capacity monitoring. The transparency of blockchain reveals openings in capacity, letting supply chain partners take advantage of shifts in demand. Imagine the benefits this transparency could create for the reverse logistics of regulated items such as recalled lithium-ion battery devices.

Fraud detection. When every transaction is visible to everyone in the chain and nothing can be removed, fraud becomes less likely. The same transparency can also reduce or eliminate misclassification of Dangerous Goods.

Blockchain solutions are already transforming logistics in the finance, food, mining, energy and retail supply chains, among others. We believe it’s only a matter of time before this technology makes an impact in Dangerous Goods, as well—and we’ll be at the forefront helping define many of the standards needed to support the hazmat industry.

Have questions about blockchain? Have ideas? Is your organization exploring blockchain applications? Please contact me, and let’s figure it out together!

Robert Finn is Labelmaster’s Vice President of Marketing & Product Management.


Labelmaster is a full-service provider of goods and services for hazardous materials and Dangerous Goods professionals, shippers, transport operators and EH&S providers. See our full line of solutions at labelmaster.com

Dangerous Good Symposium, September 5-7, 2018, Rosemont, IL

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