Logistics firms join the fight against fake food in APAC by backing blockchain consortium

By Gary Scattergood contact

- Last updated on GMT

The technology was used to track wine from Australia to China. ©iStock
The technology was used to track wine from Australia to China. ©iStock

Related tags: International trade

Getting buy-in from freight-forwarders, ports and shipping firms is crucial to maximise the food industry potential for blockchain to fight counterfeit goods, according to one start-up, which has formed a consortium to boost use of the technology.

While there has been a huge amount of attention devoted the power of blockchain — encrypted digital records that cannot be tampered with, only added to, and updated for everyone in the network at the same time — chief revenue officer of blockchain start-up TBSx3 Pieter Vandevelde told us greater collaboration was needed to ensure its effectiveness.

“Some of the systems have been missing some key points, and that is the freight fowarders, the container ports,”​ he said.

Under the consortium, Sydney-headquartered TBSx3 has brought together logistics and supply chain giants DP World Australia and DB Schenker to use the groundbreaking technology.

Vandevelde said that 80% of the world’s consumer goods are still shipped over the oceans, meaning that buy-in from the sector was vital to fight counterfeit goods and food fraud.

The alliance last year tested and utilised technology developed by TBSx3 to complete one of the largest blockchain trials to secure cargo across a global supply chain.

It tracked the distribution of wines from Coonawarra, South Australia to the port of Qingdao in north eastern China.

The trial, verified by KPMG, used TBSx3’s blockchain logistics platform, which aims to defeat the threats of counterfeits through three layers of protection: ‘cryptographic certainty, logistics tracking backed by artificial intelligence and the immutability of blockchain technology.’

Top of the list

“Wine is Australia’s fifth-largest export​,” added Vandevelde. “Not only does blockchain help to make supply chain processes more efficient, it can also fight counterfeit goods, which is a massive problem, especially in Asia.

“Food and beverage is at the very top of the list of industries that should benefit from blockchain, because consumers are incredibly concerned about what they eat. Being able to guarantee the safety and provenance of products is absolutely essential.”

Food fraud is estimated to cost the global food industry between US$30bn to $40bn annually.

Paul Scurrah, CEO of DP World Australia, said it was time for new era of industry collaboration to fight counterfeit goods.

“The scale of the fake goods problem is staggering and our company is eager to work with TBSx3 and our industry partners to provide a lasting solution.”

DB Schenker’s Chief Information Officer, Charlie Mcdonald, added: “Data security is the core to modern business risk management and we are excited by blockchain’s potential in this area. The concept of protecting that data through a distributed ledger system holds great promise.”

Vandervelde added that blockchain had the potential to play a positive, disruptive role in the region. The most obvious financial saving for firms, he added, was around  trade documentation.

"According to the Global Alliance for Trade Facilitation, seven percent of the global value of trade is absorbed in documentation costs alone. If we assume a base scenario of saving $100 per shipped container in digitisation and efficiency gains, that is at least a hundred billion," ​he said.

"The second cost saving entails from end-to-end supply chain visibility and the impact on counterfeit, both upstream and downstream. Food provenance and authentication will increase in relevance as the relative importance of grains and other starchy staple crops is declining, while that of high-value agricultural commodities is increasing in countries with growing income levels.

"That is the reason why meat, fish, wine, tea, fruit juice and coffee are amongst the products that are most susceptible to counterfeit and food fraud. Of all technologies out there, blockchain technology is the spearhead to combat counterfeiters."

He predicted that all global trade would eventually be transacted on blockchain platforms. 

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