How The World’s Largest Brewer Is Using Blockchain To Streamline Shipping

AB InBev, the world's biggest brewer is looking to emerging technologies to enable the use of better transparency in their business practices. One of the technologies they are looking into using is blockchain. Blockchain for logistics is one of the biggest use cases that has been described for the technology, as it can redefine the paradigm of how it functions today. AB InBev has jumped on the bandwagon in order to make shipping its vast amounts of beer more transparent and easy.

How Blockchain Is Optimising Logistics

Logistics involves a lot of data entry and finding a common truth to the data involved in the operation. Most of logistics is knowing where a package is at any given point in time, along with filing customs paperwork and being compliant with shipping laws. Global companies like AB InBev have already put in place arrangements to make customs and shipping activities frictionless. However, introducing the blockchain to the equation will allow for a completely paperless customs and shipping procedure. For instance, if an item is tokenised on the blockchain and then sent off to shipping, all the required data for customs will be tied to it. Whenever the item is accessed on the chain, preferably through QR/RFID code on the shipment, all the necessary documents will be presented to those requiring it. Moreover, updating the blockchain with the location of the shipment becomes easy, as all that needs to be done is add more data to the tokenized shipment on the blockchain. The shift of the shipment to a digital medium allows these changes to be made without the need for actual paperwork to be filed. Added to all of this, all participants on the network will have 24/7 real-time visibility on their shipments and products. This is due to the consensus mechanism of the blockchain that makes all transactions transparent to participants on the chain.

AB InBev Uses Blockchain To Streamline Shipping

As the world's largest brewer and parent company of some of the world's largest beers, AB InBev moves a lot of shipments around the globe. This gives them a large bill for compliance of shipping and logistics, especially considering that it is operating in the alcohol market. Alcohol is heavily regulated in many parts of the world, usually requiring a special license to ship and trade. Moreover, it also comes with a large amount of paperwork to fill out at every step of the process. To make this process more efficient, AB InBev teamed up with a consortium consisting of Accenture, APL and Kuehne+Nagal. The aim of this was to test a solution that could "eliminate the need for printed shipping documents". The system would instead rely on blockchain technology to enforce single ownership of data. This means that all relevant data is not shared physically or digitally, but on the blockchain between various parties. Reportedly, the shipping process requires around 20 different documents, which are mostly paper-based. Accenture stated that over 70% of the data in these documents can be replicated, which directly restricts the quality of data and visibility of shipments. The use of the new technology would allow the consortium to not only speed up the flow of transport documents, but also streamline regular checks for the cargo. Moreover, Accenture stated that the new system could save "hundreds of millions of dollars annually", owing to the reduction of data entry needs by up to 80%.

Successful Pilot Paves Way For Disruption

This blockchain system was tested in March of last year, and showed favourable results. The consortium represented multiple participants in the general shipping process, shipping 12 shipments to various destinations. Even across diverse regulatory environments, the system showed benefits. It was reported that it reduced operating costs and increased shipment visibility greatly across the supply chain. In this pilot, AB InBev represented an exporter, with other consortium members fulfilling their usual roles in the shipping process. The consortium found that IBM's solution worked well for their workflow, and creates a trickle-down benefit for customers. Danillo Figueiredo, VP of International Logistics at AB InBev stated on the project "Blockchain technology will be transformational to our business and the world. It reduces mistakes, digitizes information and improves the supply chain process so we can focus on our core business of brewing the best beers for consumers." AB InBev's moves are indicative of a larger shift towards utilizing blockchain technology in shipping and logistics. Other companies, such as IBM, are also focused on developing solutions for international shipping. This shows that logistics is a place that is ripe for disruption by emerging technologies that stand to redefine how the supply chain is perceived.