Proving the Business Case for the Internet of Things

IBM backs Dubai blockchain-based cargo delivery project

Steve Rogerson
December 5, 2017



The Dubai National Air Transport Association (Dnata) is working with IBM to use blockchain technology to improve cargo service delivery. Also involved with the project are the Emirates Innovation Lab and Flydubai Cargo.
 
The value proposition for cargo service delivery through the use of blockchain technology aims to eliminate redundant data and improve visibility and transparency for all stakeholders. As a result, processes could be more streamlined and simplified right from the origin to the final destination.
 
“Dnata has always been at the forefront of innovation, and the success of our study to use blockchain technology in our operations means greater security, efficiency and cost savings to our customers,” said Kevin Ennis (pictured third from the left), vice president for Dnata’s UAE cargo operations. “We are on the cusp of revolutionising the way we operate, and the success of this initiative with our partners will give the industry a real boost towards seamless service delivery. ”
 
Blockchain technology is a secure, public electronic ledger and peer-to-peer network that can be managed autonomously to exchange information between different parties.
 
In cargo, for example, much of the processes is traditionally paper based, which requires multiple sign-offs by inspectors and receivers before goods can be delivered. Even when the system is electronic, it still requires multiple parties to sign off on cargo shipments, creating a lengthy administrative process.
 
To try to streamline this process, blockchain technology can be used to manage and track the paper trail of cargo containers by digitising the supply chain. In such a scenario, what makes blockchain infallible is that no one party can modify, delete or even edit any one of the blocks without the consensus from others on the network.
 
Flydubai Cargo and Dnata, in collaboration with Emirates Innovation Lab and IBM, jointly developed a logistics platform in which blockchain infrastructure was implemented for supply chain transactions from a purchase order from the origin to delivery to the consignee warehouse at its destination. Through PoC (proof of concept), Flydubai Cargo, Emirates Innovation Lab and Dnata were able to identify issues from various perspectives such as technology, security, operation and legal perspectives, and were able to realise new supply chain services including digitalisation of documents.
 
“Blockchain technology has great potential to exponentially improve efficiency and transparency of business networks, especially in cargo and logistic flows,” said Neetan Chopra, senior vice president of Emirates Group. “However neither the technology nor the potential is easy to understand or appreciate. Hence it is imperative to carry out such business experiments and trials so that participants can experience the benefits of breakthrough technologies in a live environment. I am delighted with the success of this trial. The Innovation Lab will now work with our partners and stakeholders to prepare the scale out plan of this innovation to the larger cargo ecosystem."
 
The blockchain technology for Dnata’s cargo operations is a secure way to share information between parties. It creates a permanent, digital public ledger of transactions that can be shared among a distributed network of computers. The sharing possibilities of this technology create opportunities for logistics and supply chain applications. These include improvements of transparency and data sharing across the supply chain, better tracking of orders, reducing errors and better fraud detection.
 
“Blockchain technology is able to transform sectors far beyond financial services,” said Mohamed Hassan (pictured fourth from the left), vice president of Flydubai Cargo. “It improves the way we work together in providing reliable and convenient airfreight as it provides end-to-end services. As a result of this collaboration, Flydubai Cargo has become the first airline to complete a PoC using blockchain technology in airfreight transportation. We would like to thank all the stakeholders involved who have contributed to this milestone, and we look forward to the benefits that this technology will bring to the industry. ”  
 
Amr Refaat (pictured far right), general manager for IBM in the Middle East and Pakistan, added: "Blockchain technology is bringing a whole new meaning to the cargo and logistics industry’s value chain. Whether it involves raw materials, manufacturing, or distribution to retailers and customers, the technology is smarter, faster, and is creating a new trust-based digital economy that allows all members of the ecosystem to join new business networks based on accountability and transparency to conduct transactions.”
 
The picture shows from the left: Sathish Jeyakumar, principal architect at the Emirates Innovation Lab; Srividhya Rangarajan, process and governance manager at the Emirates Innovation Lab; Kevin Ennis; Mohamed Hassan; Sam Chacko, manager of cargo operations for Flydubai Cargo; Shaju Chacko, manager of cargo revenue optimisation at Flydubai Cargo; and Amr Refaat.