UPS blockchain

Century-old delivery giant United Parcel Service (UPS) believes that blockchain technology could help streamline package delivery logistics across a global supply chain.

According to documents published by the US Patent & Trademark Office (USPTO) on Thursday, the Georgia-based UPS has applied for a patent that utilizes blockchain and distributed ledger technology (DLT) to route packages throughout an international supply chain that may include multiple carriers.

The patent application, which UPS originally filed on Feb. 16, explains that while shipping logistics providers have become quite adept at optimizing package routing to increase efficiency and minimize costs, it is still difficult to coordinate logistics for shipments that involve more than one logistics service provider transportation network.

As the authors explained:

“[T]here may be scenarios in which it is advantageous for various logistics service providers to transport the shipment unit along different legs/segments from its origin to its destination. However, it may be difficult to coordinate the transportation of the shipment unit through the various logistics service provider transportation networks. Moreover, if there are special handling requirements for transporting the shipment unit, it may be difficult to ensure that the special handling requirements are carried through by each of the various logistics service providers that may assist in transporting the shipment unit.”

UPS aims to tackle this problem with an autonomous system that, in some embodiments, uses an immutable blockchain ledger to automatically route packages through multiple logistics service provider networks.

Once a package has been scanned into a packaging facility, the system will automatically select a route based on the service offerings of network-connected shipping providers. As the package travels to its destination, information about the shipment will be recorded in the blockchain ledger, allowing the system to rate whether service providers are meeting the obligations of their respective service offerings.

The patent authors note that, in some forms, the system could be built to accommodate interlocked DLT networks that use smart contracts to pay various parties within the supply chain as they fulfill their obligations within a particular leg of the shipment. If built on top of a public blockchain network, that system could even use decentralized cryptocurrencies like bitcoin or ether to handle those value transfers.

“Accordingly, various embodiments may comprise and/or utilize digital currency/assets represented by ledger entries,” they wrote. “Such digital currency/assets (e.g., Bitcoin, Ether, and/or the like) may itself have value that may be exchanged for various shipment units, services, and/or the like.”

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