One of the largest and most comprehensive trials of blockchain technology for global supply chains has just successfully ended with a new Australian developed blockchain security architecture. TBSx3 is has the potential to raise the global supply chain security from a standard to military grade.
The TBSx3 system uses a military 44 alphanumeric character security cryptography, compared to the six-digit public cryptography which is currently used. The new TBSx3 benchmark was successfully used on an 8,100 kilometer global road and sea supply chain stretching from the wine growing Coonawarra region of rural South Australia to the port of Qingdao in north-eastern China.
Partners included: DB Schenker (No.1 in European land transport and No.3 in global air and sea freight), DP World Australia (one of the five largest port operators in the world), Hamburg Sud (one of the world’s 10 largest container shipping lines), and Australian wine producer IUS, which exports seven product lines into the rapidly growing Chinese wine market. KPMG advised TBSx3 on the trial and verified the custodial handovers for the integrity of the product on the 8,100-kilometer land and sea journey. Furthermore, KPMG simulated the customer at the end of the trial by receiving, validating the product and checking if the system could potentially detect duplicates.
Mr. Ron Koehler CEO of trial partner DB Schenker Australia and New Zealand said, “In a globalized world the safety and security of supply chains for the medicines you buy, the food you eat, the parts that are used for your cars and the planes you fly in cannot be taken for granted. Supply chain security affects everyone: consumers, companies, communities. We welcome the opportunity to work with TBSx3 to make sure that the security of supply chains is a daily verifiable fact of life.”
The Minister for Industry, Innovation and Science, (The Hon.) Arthur Sinodinos, commented that, “Blockchain is an exciting technology with great potential for Australian businesses and SME’s. It promises to reduce costs, create new market opportunities and transform industries. Importantly the technology provides a new opportunity for Australian exporters and their customers to verify the authenticity of their products, protecting the reputations and brands of both Australia and Australian business”.
The successful completion of the 8,100 kilometer supply chain trial between Australia and China is the first of a planned series with multiple partners which, “simultaneously test the robustness of TBSx3 blockchain technology for every custodial link in global supply chains and also verification protocols for both bulk product and individual items for retailers and consumers at the end of the chain,” according to TBSx3’s Chairman, Mr. Anthony Bertini. “In terms of the numbers of partners simultaneously involved and the challenges posed for resolution of integration with multiple existing proprietary security systems we believe this can be developed to become a new security benchmark.”
“A TBSx3 research team based in Sydney managed the multiple custodial changes with multiple partners in the 8,100 kilometer journey: simultaneously a TBSx3 directed research team in both Sydney and Beijing developed consumer protocols to verify genuine product at the end of the chain in supermarkets and AR (Augmented Reality) retail centers,” Mr. Bertini said.
Verification at the retail end following constant tracking from the production source of the supply chain is critical to brand and product provenance, Mr. Sam Brand the founder and vintner of IUS Wines said. “It is a great honor to be involved with this trial and development to give our Chinese customers the assurance of integrity – and build trust.”
TBSx3 founder and director, Mr. Mark Toohey said both, “product and system agnostic so that it can have the widest possible application. We are confident that it can be integrated with any existing proprietary supply chain security system and used for any kind of product. It has been purposely designed to reduce the supply chain installation and integration cost and ensure a ‘whole of chain’ security solution which can be continuously monitored from the beginning to the end of a supply chain and whenever and wherever necessary for an incremental cost, upgraded. The TBSx3 blockchain security solution, integrated with sophisticated proprietary security infrastructures, holds the promise to significantly reduce the immense and growing traffic worldwide in counterfeit and often highly dangerous food products and fake medicines.”
The Organization for Economic Cooperation and Development (OECD) has estimated that the global trade in fake goods is now worth nearly half a trillion dollars a year: the international police agency, Interpol, has estimated that fake pharmaceuticals kill more than a million people each year. Of the one million people each year who die from malaria the World Health Organization (WHO) estimates that 200,000 die because of fake anti-malarial drugs.
“A ‘whole of chain’ global supply chain security environment that has a military precision and force and that can constantly monitor product movements anywhere at any time is an absolute necessity: – this is particularly true as in the globalized world economy more than half the active ingredients in life saving drugs are coming from countries other than where they are sold.” Mr. Toohey said.
Blockchain technology dramatically enhances the security equation for ports which now, because of their size and complexity, are “the industrial world’s city gates of continents,” said Mr. Paul Scurrah, DP World Australia’s Managing Director and Chief Executive Officer.
“The TBSx3 trial is an important step in testing how new technology may strengthen the security of cargo and we understand the scale and intricacy of the security challenge.”
“We are committed to exploring how Blockchain technology can be integrated with our deeply layered security infrastructure: the challenge and opportunity is for complete transparency-to know at any time what is in each container, palette, carton and box – to virtually the last grain of matter.”
Mr. Laszlo Peter, Director Technology Advisory KPMG Australia said the recently completed TBSx3 trial is, “an important step in developing consortia which can track product or assets and protect provenance through every part of a supply chain from factory or farm gate, across continents, by land, sea and air, all the way to the end customer.
The global supply chain network is now a constantly moving leviathan of separate, but interlocking parts including 50,000 ships registered in more than 150 nations, manned by more than a million merchant seamen and nearly 2,000 freighter aircraft, tens of millions of trucks and railroads sprawling across millions of kilometers of track on every continent on earth.
Growth in global trade has been three to five times greater than population growth since 1950, the total value of global merchandise trade has increased from $61.8 billion in 1950 to $18,827 billion in 2014 and the technological revolution of containerization has boosted international trade by more than all the trade agreements made in the past 50 years. What we need at the heart of this massive, always moving and constantly growing mechanism-is transparent, dynamic, governance.
Mr. Laszlo Peter said the development of consortia such as TBSx3, the accelerating investment of human and commercial capital globally in the continuous refinement of blockchain technology particularly smart self-executing contracts, “may be the beginning of a new age of integrity for international trade.”
“Supply chains in the future may in large part be legally governed by automated, blockchain enabled networks of machined codes built from the best of commercial practice and human behavior, which can not only verify each genuine product in a supply chain anywhere, at any time, but also hold each human actor in a supply chain to account for his or her actions, anywhere, anytime.”