The logistics giant United Parcel Service, better known as UPS, wants to rely on blockchain systems in the global mail order business. A relevant patent application has recently been released by the US Patent and Trademark Office. With the help of blockchain and smart contracts, UPS now not only wants to save administrative costs, but will also be able to catch up on lost shipments in the future. Meanwhile, distributed ledger technologies (DLTs) are increasingly proving their worth in the logistics industry.

20 million deliveries per day, 5 billion parcels and letters per year, more than 10 million customers in more than 200 countries — a look at the figures give us an idea of ​​the huge administrative burden of the package giant UPS.

The Blockchain should now help to put global logistics on a secure footing. In order for this to succeed hurdles, the company filed a patent application to the US authorities in February. These, in turn, have now published the application.

With the use of various, coordinated blockchains and smart contracts, UPS now intends to assign deliveries to specific routes from the dispatch center, taking into account the requirements of different transport service providers along the supply chain. On the way to the customer then all relevant information and interfaces should be secured and costs could be saved.

This is how the application describes the project:

“In the future, transport information and data from the shipment itself can be provided on the way from the place of origin to the destination. […] Thus an unchangeable logbook of various transport stations is kept.“

With the aid of these “autonomous service dialing systems and decentralized transport databases”, lost packets, in particular, should be a thing of the past.

UPS: Blockchain has a potential for “transparency and efficiency”

Another possible use of blockchain within the supply chain are also cryptocurrencies. According to the application, the logistics system could in the future use “bitcoin, ether and similar” to automatically pay service providers.

UPS has been open to blockchain applications in the past several times. The Group in 2017 the logistics consortium blockchain in Trucking Alliance (TAIB) was joined. In addition, it had hinted that bitcoin might be considering payment in the area of ​​parcel stations.

At the time, Innovation Leader Linda Weakland praised DLT’s enormous “potential to increase the transparency and efficiency” of the industry.

However, the patent application now published is sometimes the first serious attempt to integrate blockchain technology directly into the business.

Blockchain in supply chain systems — a proven recipe

While UPS now hopes for confirmation from the US authorities, the parcel service is far from being the first company to leverage the potential of DLT in logistics. Rather, numerous pilot projects in the past months alone testify to the possible uses of Blockchain to secure supply chains and make them traceable.

At the beginning of August, software giant IBM in cooperation with the Danish shipping company Maersk introduced the blockchain platform TradeLense. This should address specifically the problems of shipping logistics — over 90 industry organizations have already stated that they intend to use them in the future.

The success of a previous milestone in the industry, in turn, had previously announced the Australian Commonwealth Bank (CBA). With the help of an Ethereum Blockchain, the bank was able to ship 17 tons of almonds from Victoria, Australia, to Hamburg in an automated and comprehensible manner.

Another example of similar efforts is currently being pursued by the Australian Government. Since August, Canberra has sponsored a blockchain project for sustainable sugar. The focus of the technology is also here to secure the supply chain of the sweet good and so origin and quality.