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In May 2018, FedEx Founder, Chairman and CEO Fred Smith referred to blockchain as “the next frontier that’s going to completely change worldwide supply chains.” A statement like that would normally send businesses scrambling to be first to the finish line with this technology. However, it is not that easy with blockchain, and what we believe is the solution is certainly not typical, nor intuitive.
In the global supply chain space, there are tens of thousands of companies, ranging from large worldwide entities to bike messengers. Virtually each of these companies has their own databases, but they don’t talk to each other well, if at all. This presents a great deal of friction in the global supply chain industry, with friction referring to the increased time, costs and resources required to move data between databases or across borders.
Many organizations are treating blockchain like the early days of the internet–quickly bringing solutions to market, trying to be first in the space. We see some variation of this with consortium models, and there is a lot of great knowledge to be gained through proofs of concept and some consortia work. However, FedEx believes that in order for blockchain to succeed in the global supply chain space, open is inevitable. As our CIO Rob Carter has said, we don’t think we can just put a FedEx logo on this technology and have the world will come to us. We believe that wide scale industry collaboration is needed in order for blockchain to reach its full potential.
We see the potential for ‘coopetition’ in the development of blockchain solutions. While it is not taught in Business School or at your new employee orientation, if we are all essentially trying to cross a canyon between where we all are and the future land of blockchain, we think it will take all of us working together to actually build an open model in the supply chain space. This global village must also work side-by-side with U.S. Customs & Border Protection (CBP), FDA, etc. We can’t move forward without government involvement, nor can we wait for them to solve this for us. These solutions using blockchain will have to work for everyone, and, as in many other examples, proprietary solutions can sit on top, but we can’t skip this foundational step.
FedEx is a founding member of the Blockchain in Transport Alliance (BiTA) and are on the Standards Council, along with entities across multiple industries - including some with whom we compete. We are collectively working to publish data standards in the global supply chain space. The goal is neutral data standards that will benefit all within multiple industries.
Many challenges are taken on by drilling down on the issue, and getting closer to it. In this case, we think the solution only comes into focus by actually pulling back from it and looking at it from a global view. From that perspective, we can see that enterprise, government, and others only realize the benefit of this technology by working together. That realization can accelerate this technology, to the benefit of all.