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Blockchain Food Distribution Gains Traction

Startup logistics firm makes the case for a public option 
Ship Chain
Photograph courtesy of ShipChain

While some industry players led by Walmart are participating in a private implementation of a blockchain food safety solution run though the IBM Food Trust, there’s a concurrent opportunity in the public blockchain offering similar supply chain visibility without the same expense—or the risk of sharing data with competitors.

That could have big implications for product recalls, food safety issues and risk mitigation, as well as for reducing and resolving disputes that arise along the supply chain between trading partners, said John Monarch, founder and CEO of ShipChain, a blockchain-based logistic solutions provider with headquarters in Los Angeles. There is also evidence emerging that products with superior supply chain transparency can command premium pricing, he added.

Monarch is admittedly biased, but argues his system, which utilizes a public blockchain, is superior because its hosted environment can be utilized as a service by retailers using their own staff of software developers to build on, and they can do so without permissions of others as might be required in an administered private system. ShipChain is focused on small and medium-sized suppliers and retailers that might be challenged to afford the “six- or seven-figure” expense of an administered private system, he added.

“We’re building what we are calling an end-to-end visibility platform on top of blockchain technology,” Monarch said in an interview. “We want to use that to help provide trust and supply chain where it may be a challenge right now.”

Monarch knows of supply chain challenges. He is the owner of a third-party e-commerce fulfillment center that he said was once beset by a container of client inventory that went missing.

“No one knew where it was,” he explains. “The client is yelling at me, I’m yelling at the forwarder, and the forwarder is yelling at the carrier—only the carrier doesn’t care because it’s only one container. They’re like, whatever. Then three weeks later it shows up at our loading dock with a bill for about $11,000 to merge costs because it had just been sitting at the port.”

It was around that same time in 2016 when the blockchain computing platform Ethereum was starting to gain traction. “I put two and two together with my partners and it clicked,” he said. They founded ShipChain the following year.

ShipChain last month announced a partnership with GTX Corp., which Monarch said will provide significant implications for distribution of food, drinks, pharmaceuticals and other temperature-sensitive products that can be negatively affected by conditions in transit. Under the agreement, ShipChain will utilize GTX’s temperature-enabled near-field communication (NFC) smart tags to track temperature-sensitive shipments. The tag requires no scanners or wires, and it records temperatures based on customer-defined intervals and durations.

“Until now, availability and cost of sensors was always a stumbling block,” Monarch said, describing the tags as a “low-cost, powerful tool to give our customers even more information about their shipments. Now, we can provide new visibility into food quality, temperature history, location and handler information.”

Encrypted data collected from the tags will securely upload to the ShipChain blockchain back end, providing secure authentication and chain of custody. This Tap & Track service will enable temperature-sensitive shipments to be efficiently monitored while in transit, with the potential to manage a range of new government regulatory requirements for perishable shipments.

ShipChain is among dozens of food-related startups participating in a Silicon Valley-based incubator platform called Plug and Play. Monarch predicts widespread implementation of blockchain technologies in food logistics are on the way.

“I think that it’s time to move past the hype on blockchain,” Monarch says. “I also think that people who are exploring and watching, especially retailers, because they've heard a lot about Food Trust and IBM and all that type of stuff, are going to explore public chains. We’re seeing a lot of them move forward.”

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