Decentralized logistics company dexFreight announced Wednesday the completion of its first blockchain assisted shipment using smart contracts to supply payment.

The shipment was part of a pilot of its new platform designed to show the efficacy and capability of distributed ledger technology. It took 5,320 pounds of frozen foods from Preferred Freezer Services LLC in Medley, Florida, and delivered it to Manny’s Enterprises Inc. in Sunrise, Florida, on Oct. 15.

To complete the trip, dexFreight joined with Netuno USA Inc., a fast-growing seafood wholesaler, trucking company Arel Trucking Inc. and blockchain smart contract service provider RSK Labs.

For some years now, distributed ledger blockchain technology has been put to pilot and experimental uses to track shipments, provide transparency into supply chains and automate logistics transactions. By their very nature, blockchains provide a cryptographic and trustworthy historical record of all transactions processed on them, this has been sought after to increase efficiency by reducing paperwork and errors.

“This is a huge milestone toward an imminent transformation of the logistics industry through the adoption of blockchain technology,” said Rajat Rajbhandari chief executive and co-founder of dexFreight. “Our platform aims for a truly decentralized model, open to all the stakeholders, and allowing for a new world of services that will bring much-needed optimization and liquidity to this industry.”

DexFreight’s use of RSK’s blockchain platform allowed the company to mark and record the vital stats for the seafood shipment onto the cryptographic ledger the moment it was placed on the truck.

Funds for the transaction were then held in escrow using smart contracts, programmable rules-based contracts executed by the blockchain only once certain criteria apply — in this case, the presentation of multiple cryptographic keys at the completion of the delivery.

To track the shipment, a quick response or QR code was placed on the parcels in the truck and registered in the system as the truck was loaded. Thus operators at dexFreight could see its progress tracked on the blockchain – and the same QR code would be scanned at the destination as well as paperwork acknowledging delivery. Once the delivery completed, the blockchain smart contract released the funds from escrow to distribute the payment.

“With the use of smart contracts, companies like dexFreight can transfer value and assets between parties on our platform,” said Diego Gutierrez, chief executive of RSK. “With a defined set of rules, in this case for logistics, all participants know that their business needs will be fulfilled without anyone altering their agreement or changing the rules.”

With dexFreight’s blockchain shipment platform, the company expects to add an accountability layer to shipments that feature blockchain-based verified identity and objective reputation system derived from smart contract data and performance indicators. These indicators include data such as on-time pickup and delivery, on-time payments, loading and unloading times, freight claims and similar information. With this data available to shippers and third-parties, it will be possible for them to best streamline carrier onboarding and reduce liability risk.

The platform will also include up-to-date profiles, including all required and relevant documentation such as licensing, insurance safety, performance records and credit history. The reputation system will allow all parties involved to set roles and rules for which contracts can go to whom, including a system that flags potential dangers when transaction qualifications fall below certain thresholds.

“DexFreight solves the issue of false documentation by making our transactions with shippers completely transparent, and so we can get paid for the service we provided,” said Robert Julia, chief financial officer at Arel Trucking.

Image: dexFreight