Secure and smart processes thanks to blockchain

High efficiency and precisely synchronised process chains are part of the daily business for logistics companies. Nevertheless, the literal paperwork in everyday transport is not decreasing. Quite the opposite is the case – for example, when it comes to cross-border freight transports or hazardous goods transports, countless forms have to be processed and carried along. Sooner or later, however, digital solutions are likely to take the place of paper. Blockchain technology offers all the prerequisites for this: a tamper-proof platform, legally secure transactions, real-time communication and global networking.

Since May 2020, a research team at the Fraunhofer Institute for Material Flow and Logistics IML in Dortmund has been working on the development and testing of use cases and prototypes. The goal is to establish a European Blockchain Institute in the coming years. “Blockchain devices will actively negotiate, trigger transactions and book payments via smart contract in the future. This will make every action uniquely identifiable and traceable via the network,” explains Institute Director Prof. Dr. Michael Henke. The digitisation of process and supply chains and the use of artificial intelligence will not only usher in a new era in logistics. At the same time, digitalization is making a significant contribution to a Silicon Economy.

The technologies developed in Dortmund are to be made freely available to market participants as open source applications and thus ideally form new standards, explains Josef Kamphues, team leader Supply Chain Management at Fraunhofer IML: “By focusing on the interfaces, we want to keep the barriers to entry low and thus enable high scalability.” The approach is “bring your own device”. Regardless of the hardware used, the potential of blockchain technology is to be optimally exploited operationally – regardless of whether it involves temperature-controlled transports, customs formalities or dangerous goods logistics. “We are counting on a rapidly growing community that can implement individual application solutions based on the open source software,” emphasises Dr. Maximilian Austerjost from the Blockchain Institute’s project management. “In the first quarter, we would like to release the first software components on the topic of customs. The interest is already very high throughout Europe.”

How the interaction of software and hardware in future digitalized supply chains can look like is demonstrated by the IML with two prototypes. Already last year, the researchers presented the “Blockchain Device” for monitoring temperature-sensitive goods such as food, drugs or vaccines along global supply chains. It is a completely new development, from the computer hardware to the temperature sensor software to the blockchain client. Only nine millimeters high, it can be inserted into a standard container like a plug-in card. It features 5G-compatible communications, a high-resolution e-paper display, and an array of sensors (temperature, acceleration, location). This Internet-of-Things device enables real-time data collection and autonomous real-time control of supply chains. Position and sensor data document the seamless monitoring of the transport chain, including conditions that must be adhered to. In addition, the device is “IDS-ready”, i.e. prepared for implementation in the International Data Spaces.

A second new development followed a few weeks ago, in the fall of 2021 at the “Future Logistics Congress – 39th Dortmund Talks”: the blockchain device “Dragon” can be used to organize hazardous goods transports. Around 4.4 million tons of hazardous goods travel Germany’s roads every year – and the trend is rising. However, the accompanying documents that are generated during each transport are usually not available digitally and are certainly not stored in a tamper-proof and legally secure manner. “Dragon” (“Device for reliable dangerous goods transport”) is intended to provide a remedy: For the first time, it offers a solution for the dangerous goods sector to make any mobile end devices blockchain-capable. In the future, relevant accompanying documents will be retrieved from the blockchain, events will be continuously tracked and so-called smart contracts will be triggered. This will allow recurring processes in the handling of dangerous goods to be automated and stored in a legally secure manner.

The dynamics in the development of blockchain technologies for logistics applications are high, emphasizes Josef Kamphues: “Although it is still a young discipline, it is developing very quickly. Therefore, in a few years, numerous fields of application are likely to emerge that are not even conceivable today.” The European Blockchain Institute in Dortmund is expected to play a significant role in this.