Leveraging blockchain technology can help improve supply chain management and shipping as well as help protect United States companies from pirated products shipped from other countries which are causing unfair competition and disrupting markets.
This claim emerged from presentations and testimonies from experts who spoke at the Congressional hearing of the United States Subcommittee on Oversight and Subcommittee on Research and Technology on Tuesday. The hearing focused on leveraging blockchain technology to improve supply chain management and to combat counterfeit goods such as medicines and children’s products.
Ralph Abraham, chairman of the oversight subcommittee highlighted in his opening sentiments that “leveraging blockchain technology” could help “improve supply chain management and combat counterfeit” goods. He said blockchain technology could benefit both the private and public sectors despite concerns around overregulation of the technology.
Said Abraham:
“We understand that the tech can benefit both the public and private sectors and seek to understand what can be done to ensure that this tech is appropriately leveraged.”
The issue of regulation and standardisation of blockchain platforms took center stage, with Chris Rubio, vice president for global customs brokerage staff at UPS saying the United States government had to “take balanced approach to regulating and allowing the technology to grow” and provide solutions to logistical and supply chain problems and challenges.
“I know the patch of global regulation that stifle innovation,” he said. “The international community must come together to ensure that there is one unified standards for blockchain.”
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The Department of Homeland Security’s Science and Technology director, Dr. Douglas Maughan highlighted that blockchain platforms were promising value solutions, underpinned by “rapid growth of interest across both private and public” sectors across the world.
Dr. Maughan said from a government perspective, blockchain technology holds the potential for enhanced transparency and auditing of public service operations. It also helps enhance “greater supply chain visibility to combat the distribution of counterfeit products and automation of paper based” processes.
Manufacturers and producers of baby care products such as Luv N’ Care are of the view that blockchain technology will help combat the distribution of counterfeit products. Robert Chiavello, who represented the company at the congressional hearing, said blockchain was the right technology solution to determine the authenticity of products from production to final delivery point.
He said:
“Today the pirated products we are facing are coming in by post with a foreign entity using e-retailers. They are copying our pics from our websites and then they use digital advertising and consumers think the products is related to us and companies then post the products straight to the consumer.”
The hearing was also told that blockchain enables collaboration in the shipping and logistics industry through ensuring the security and the flow of trustworthy of information. The industry has been pushing for standardized and collaborative blockchain approaches, with China already working on this.
This will allow participants under the platform to track and locate data on the processing of cargo and will also make it easy to access critical information for all partners to a transaction. Blockchain will help to “ensure real time visibility and enhances authentication” of transactions.
Michael White, the head of global trade digitization at Maersk, told the hearing that supply chains were critical in global trade, with 80% goods traded around the world carried by shipping companies who now need enhanced and centralised management and monitoring platforms such as blockchain.
The underlying values of deploying blockchain in the supply chain far exceeds its current limitations, although developers are continuously working on refining their platforms and applications, other members said.
“Blockchain could bring together buyers and sellers together. Blockchain could enable greater transparency and assurances that duties are paid. Blockchain can have ability to track through supply chain. We have seen the tech used to track products such as diamonds and mangoes. It ensures standards are met each step of the way,” Rubio concluded.
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