Proving the Business Case for the Internet of Things

IBM uses blockchain to improve logistics in Columbia

Steve Rogerson
July 5, 2017
IBM is using blockchain to help Colombian logistics company AOS keep track of its lorries.
Built on IBM Blockchain and Watson IoT on the IBM cloud, the system is designed to enhance efficiency in the logistics and transport industry throughout the country.
Blockchain works as an immutable ledger that records transactions between members of a business network. In the supply chain, this creates visibility for all permissioned members into the exchange of information throughout the transport cycle, enabling greater transparency in the registration of data and trades.
Traditionally, supply chain transactions are completed manually, creating delays and a higher risk for recording error, which can cause differences between what was recorded and what was actually loaded. By digitising this process using blockchain and the IoT, the relevant information is captured directly from the sensors placed on the lorries, and entered onto the blockchain, creating a single, shared repository that all authorised participants can access and which can only be altered with consensus from all parties.
With this, once the lorry leaves the distribution point, an automatic message is sent to the customer, informing them about the load, weight and estimated time of arrival. If part of the delivery is returned, the invoicing can be automated depending on the actual load delivered.
Also, through the sensors located on the trucks, an information repository is generated using the IoT and blockchain, which tracks all the exchanges, stops and transactions made by each lorry and its respective load, from the distribution point to the final customer. This heightened level of transparency can help increase accountability between shippers and their customers, promoting the flow of business.
For AOS, this project is of great relevance for the entire logistics industry in the country.
"The proper handling and use of information on transactions and exchanges related to cargoes is key to the logistics and transportation industry," said Ricardo Buitrago, director of innovation at AOS. “Therefore, our main objective with this is to provide transparency and security throughout the transport cycle. Today, it is available as a functional prototype on the IBM cloud, for companies in the logistics, supply chain and transportation sectors throughout Colombia."
The service also integrates Watson IoT, designed to monitor what is happening with the lorries. For example, it captures the input and output weight to define available capacity as well as in which silo and which person will carry the load; and those data are also correlated to external information, such as weather, humidity, temperature and driver’s data, to estimate delivery time to customers.
“One of the biggest challenges in the logistics and transportation industry is the protection of its assets and cargoes, as the correct monitoring and tracking of all transactions involving such charges,” said Jorge Vergara, IBM Colombia CTO. “That is why the implementation of this type of blockchain and IoT in the cloud is an opportunity to access critical data on-demand and make more informed decisions for the benefit of business.”
In the future, it is expected to include functionality such as an electronic seal mechanism for land cargoes control and monitoring.