Global shipping and transport network business FedEx Corp. announced Wednesday that the company intends to work with the Blockchain in Transport Alliance to develop standards for distributed ledger technology in shipping.

An article in FreightWaves, a cargo shipping news site, reported that FedEx joined BiTA as a founding organization and has outlined plans to set standards for the use of blockchain in governing and tracking shipment transactions.

A blockchain is a distributed database capable of securing transactions in a tamperproof ledger. For the purpose of tracking shipping, a blockchain would be useful for tracking a parcel starting with its origin, from truck to truck and warehouse to warehouse, until its final destination. Each time the status of the package changes, this action can be stored as a transaction in the blockchain along with metadata about package conditions or other information.

“We continually try to enhance the customer’s experience, and blockchain is tied to that,” said Dale Chrystie, vice president of strategic planning and analysis at FedEx Freight. “We try to make it easy for our customers to do business with us. Since the technology is around making data more secure and transparent, we see that it holds a lot of promise.”

Shipping industries, in particular, have been experimenting with using blockchain technology to automate shipment tracking in order to reduce costs and increase security.

Last year, IBM Corp. began pilot programs with a number of marine freight industry businesses including Singapore-based shipping company Pacific International Lines Pte Ltd. and more recently with A.P. Moller-Maersk Group. Marine Transport International USA LLC completed a pilot blockchain for shipping port security with Agility Sciences Ltd. and Samsung SDS is building a blockchain network for the Korean shipping industry.

Blockchain programs have also been built out to secure specific supply chains, such as IBM’s work with Wal-Mart Stores Inc. and global retailers to increase food safety and De Beer’s work to use blockchain technology to provide authenticity records for diamonds.

“We have millions of records a day in our system, and we think of blockchain as a secure chain of custody that could transform the logistics industry,” said Chrystie. “We believe it holds a lot of promise in that space and would streamline all that data exchange in a very secure way.”

FedEx serves 220 countries and ships more than 1.25 billion packages annually covering 2.5 million miles traveled. It has already begun work on several pilot blockchain platforms, including one regarding dispute resolution.

Chrystie explained that with a blockchain it is possible to provide customers “a common language” with which to describe problems upstream and downstream from FedEx’s network. Currently, different distributors, shippers and receivers use different tracking systems and FedEx does not always have the data it needs to determine what happened and how to resolve it.

“Our early work is in dispute resolution, where we have customers both upstream and downstream from us, trying to speak back in a common language,” Chrystie said. “We are trying to determine if that data is common and in some cases, we as carriers, don’t necessarily have all the data that we would like to have. If we could agree on these elements and standards, we think we can drive a lot of efficiency in the process, and that’s just one example.”

By joining BiTA, FedEx is looking to get in on the ground level of the nascent blockchain shipping industry and will collaborate with other members in order to find standards that can be used for transport blockchains. By coming in early, FedEx will gain a strong voice in the shape of that industry.

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