UPS is the latest in a string of global corporation to file a patent for a blockchain-based platform. The massive logistics firm may be planning to use a comprehensive blockchain platform to allow its counterparties to be paid directly, and to monitor shipments in real time. UPS isn’t alone in locking down blockchain technology with patents.
Many large companies are looking to blockchain for increased efficiency, especially in the logistics space. The patent that UPS filed last Thursday looks like it was designed with a new delivery network in mind. UPS’s patent also describes the use of a digital currency, though no specific crypto was mentioned. UPS was already a member of the Blockchain in Trucking Alliance (BiTA), though this patent appears to have a much wider reach than simple overland logistics.
UPS Gives Blockchain Autonomy
In some cases, UPS has to use the services of a third-party for their global parcel platform. Their new patent seems to address this aspect of their business. Ensuring that packages are delivered and received from third-party service providers is a lot of work. Extensive records need to be kept, and payment made for services rendered.
UPS seems to think that blockchain could address this issue, and make dealing with third-party service providers a lot easier. Their patent appears to propose a blockchain system that would pay third-parties once a package was delivered, and perhaps even make that payment with a cryptocurrency.
Micro-payments are one of the major advantages that cryptos and blockchain offer companies. Instead of having to deal with a bank, blockchain makes electronic payments simple and cheap. Other companies like Walmart have patented blockchain platforms that would take advantage of micro-payments, and boost efficiency across an electrical grid.
Logistics are a Huge Market for Blockchain
UPS is one of many firms working to find ways to utilize blockchain in the global logistics space. IBM and Maersk were some of the first to begin experimenting with blockchain technology for logistics. They began working with new forms of sea-borne shipment tracking in 2014, and today their TradeLens platform is one of the most advanced systems for logistics companies that want to tap into blockchain’s potential.
Read: Blockchain & Supply Chain Management
Commonwealth Bank of Australia is another player in the global blockchain logistics game. They recently debuted their new blockchain platform with a test run of almonds that were shipped from Victoria, in Australia, to Hamburg, Germany. By all accounts the new platform worked well, and slashed the amount of paperwork needed to perform a routine shipment.
Centralized or Decentralized Platforms?
One of the common criticisms that is leveled against a platform like TradeLens is that it really isn’t decentralized. TradeLens operates on IBM’s cloud, which makes it something of a centralized platform. This is a mixed bag for users, though having a centralized system behind a logistics platform isn’t all bad. There is no reliance on “miners” to make the platform work, but on the other hand, one massive company is in control of the entire network.
For companies that want a bit more autonomy, start-ups like Fr8 Network, dexFreight, Block Array, ShipChain and Slync are all working on blockchain-based logistics platforms that are more decentralized. All of these smaller companies are members of the Blockchain in Transport Alliance, and they all have different products to offer the global shipping sector.
In a recent interview with FreightWaves, the CEO and cofounder of dexFreight, Rajat Rajbhandari, had this to say about how his company approaches the blockchain-logistics space,
“The end goal for ShipChain, Fr8 and us is very similar: bring down cost through high automation with blockchain. — We come from more of the broker perspective—we look more at workflow, because if the tech is going to drive middlemen away it needs to be able to do everything a typical broker does,” and continued, “What we ultimately want to do is have companies transact directly without the platform at all: they’ll be running their own nodes in a truly decentralized way.”
New Horizons for Blockchain are Everywhere
It is remarkable how quickly blockchain technology is being developed by some of the world’s largest companies. UPS seems to be taking an open system approach to its new blockchain platform, which incentives their partners to adopt its use. Third-party service providers would receive instant payment once their job was done, which is a big plus for any business.
Like many of the patents that have been announced recently, there are a lot of unknowns surrounding the technologies that will eventually emerge. UPS is probably on the right track when it comes to developing a blockchain-based platform, and if it is designed correctly, it could help save UPS millions of dollars annually.
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