DB Schenker, VeChain develop blockchain app for smart logistics
vechain and DB Schenker pioneer in the use of blockchain for the logistics industry

DB Schenker, VeChain develop blockchain app for smart logistics

DB Schenker, the transport and logistics division of German railway company Deutsche Bahn, has co-developed a decentralised application for supplier evaluation using the VeChainThor blockchain platform.

DB Schenker has been providing logistics services in China for more than 50 years and employs 5,700 specialists in over 60 cities across the country. However, the sheer size of its growing Chinese network has complicated the process of measuring the performance of third-party service providers.

Evaluating logistics suppliers using blockchain

VeChain is a blockchain platform for decentralised applications that has so far been used for solutions in the logistics, food/cold storage, and automotive industries.

Using VeChain’s blockchain platform, DB Schenker’s supplier evaluation system aims to rank and track service providers by factors such as the quality of their packaging, transportation times, and overall service.

According to a statement from VeChain, “this is the first time that blockchain has been used for supplier management purposes”.

The decentralised app will use VeChainThor to score business partners using collected data, and give DB Schenker insights into the quality of its suppliers. While on the surface this may seem like a niche application, VeChain has suggested that it could evolve into a platform used by multiple logistics service providers.

A spokesperson for VeChain said of the move that, “Technology makes us better. We believe that blockchain is able to fundamentally change the logistics industry, and we look forward to cooperating with more industry players in building a logistics ecosystem based on mutual construction, trust, collaboration, and benefit.”

Internet of Business says

No further details have been provided by VeChain or DB Schenker about the new decentralised application.

However, speaking to Internet of Business, a spokesperson from DB Schenker suggested that blockchain’s fundamentals are central to the collaboration, and that the idea of supplier evaluation is an “exploration” alongside more conventional use cases.

With disparate data points, individual packages, and countless service providers, it makes sense to track movements across supply chains on a secure, distributed ledger. Particularly when items are on the move and responsibility for them is constantly changing.

“In the logistics industry, we see benefits by using blockchain to improve the overall visibility in supply chains. Tracking and provenance of goods, as well as valid information about handling conditions, are good use cases for blockchain,” said the spokesperson.

However, even with all the insight and technology in the world, creating a smooth supply chain is ultimately about working with the most reliable providers. “As collaboration will become one major aspect of blockchain, we decided to develop a system for supplier evaluation,” added the company.

“Compared to other potential partners we evaluated, VeChain started its blockchain business early and had already implemented some successful use cases in logistics. They offered a high level of flexibility in development, which was of major importance to us.”