As digitisation cuts through a multitude of industries, disrupting some for the better and eliminating old traditions in its wake, the freight transportation industry has not been left out.
Enigio latest partnership with Scanlog – Scandinavian Logistics Partners, a leading logistics solutions provider, is evidence of the digital wave that is now changing the logistics business. The partnership is set to create a business documentation technology in the form of a digital CMR document (dCMR).
The dCMR will cut operational costs and speed up the entire process of transporting goods from source to destination. Through the use of blockchain technology and Ricardian contracts designed by Enigio, Scanlog’s customers will be able to track their cargo along the supply chain and easily acquire evidence for insurance claims in case of damages or loss.
As Benjamin Fossum (Head of Digital Transformation & IT at Scanlog) puts it,
The dCMR will open up a lot of new insights to the supply chain by modernising the way we administrate. It will cut down the physical paperwork of cargo transportation and by doing that streamline the handover of goods.
Challenges in freight transportation
Shipments go through multiple handlers before arrival at the final destination. Throughout the shipping process, documentation is required as it helps identify the shipment’s condition, its content, and its quality even as it changes hands from one handler to the next.
There are a wide variety of documents involved in the shipping process. For many shipping and logistics companies, dealing with all the necessary documents required to achieve trust and accountability in the supply chain can be quite a challenge.
Scanlog offers a complete suite of logistics solutions that applies to all modes of transportation. Scanlog boasts of an extensive and experienced staff that can offer customised freight forwarding solutions for Scandinavian exporters and importers.
When it comes to road freight solutions, Scanlog uses documentation to achieve cost-effective and timely delivery of freight to customers and suppliers. Using documents based on the CMR standards developed by the International Road Transport Union, Scanlog can comply with the legal requirements of cargo transportation by road across European states.
What is a CMR document?
The CMR Convention which in full stands for the Convention on the Contract for the International Carriage of Goods by Road as agreed upon by the United Nations Geneva convention in 1956 is a set standard for the presentation of transport documents.
Therefore, throughout the transportation of cargo by road, copies of the CMR document are left at each handover point and the original is used as a point of reference on the arrival of cargo at the destination. Also, this document is checked by customs and police and during transportation and has legalistic requirements. Also, Scanlog designs its CMR documents to establish trust and accountability as the shipment moves from one handler to the other.
Given the complex nature of road transport, cargo handlers are required to accurately give a report on the condition of the cargo and sign in agreement of taking over responsibility for the cargo’s safety.
For example, if a shipment of wine bottles is required to move from point A to point D, the first handler (e.g. a trucking company) will be accountable for the safety of the cargo starting from point A to B.
When the second handler receives the cargo at point B, a detailed report of the condition of the cargo must be given and any damages or losses must be reported before the start of the second journey to point C. If the second freight handler does not report those damages, the third handler will record that the goods were damaged or lost while in the care of the second handler.
Therefore, handlers must give an accurate report as the cargo goes through the handover process from point A to D.
With accurate CMR documentation by the handlers, it will be much easier for Scanlog to pinpoint the handler responsible for damages or losses since the original CMR document is used as a point of reference.
However, the cumbersome nature of dealing with physical paperwork during the handover process makes the entire supply chain costly and inefficient.
The use of physical CMR documents makes it difficult to accurately pinpoint exactly what happened to the shipment or to even determine who is responsible for the damages. Physical paper documents are not only prone to damage but can also be manipulated to convey the wrong information with ease.
Enigio’s solution
Cue the partnership between Scanlog and Enigio. With a team of senior developers, with long experience in archival science, Enigio offers a reliable and safe document digitisation process using its innovative trace:original technology.
Through this new partnership, Scanlog’s CMR documents will be transformed into their digital equivalent while maintaining the same quality as the original paper document. Instead of having multiple copies of the original CMR document left behind at every point of handover, a single digital CMR document will be used throughout the supply chain.
To create a traceable document that is resistant to manipulation, Enigio uses blockchain technology to create distinguishable digital original documents.
Using Ricardian contracts on the blockchain, Enigio can create an original digital CMR (dCMR) that can be transferred safely along the supply chain without the risk of manipulation from human freight handlers. Furthermore, the dCMRs can be appended from one user to the next giving an accurate accounting of the cargo’s condition.
How the dCMR transport-chain works
The dCMR is a digital equivalent of the physical CMR document.
Designed as a Ricardian contract, the dCMR has references to the current holder’s signature, and that information is logged on the blockchain. This enables traceability and accountability with every signature along the supply chain.
Even though the dCMR has references logged to the blockchain (a public ledger), the details of its content are private as the blockchain only stores the cryptographic references and signatures.
Therefore, a bad actor along the supply chain will have to change the cryptographic references logged on the blockchain before having access to the details of the digital original. Blockchain’s immutability makes this a nearly impossible task.
As various cargo handlers add their signature to the dCMR, the dCMR acts as an active document collecting data and only allowing approved individuals to edit its contents. Fossum says,
By gathering the information about the transport and giving admittance to the parties involved there will be no more questions about what happened when during a transport, saving a lot of time and money,
Through this technology, Scanlog can streamline the handover of cargo from one freight forwarder to the next. Furthermore, by its use of digital CMR documentation, Scanlog is also able to cut operational costs associated with cumbersome physical paper documents.
The purpose
The purpose of documentation during the process of cargo transportation is to identify shipment and its content, obtain regulatory compliance as the cargo moves from one jurisdiction to the other, and make insurance claims in case of loss or damage. While this entire process has mostly been conducted with a physical paper document, the challenge of tracking the cargo and accounting for damages or losses remains prevalent.
With the partnership between Enigio and Scanlog, this problem can be solved by the use of digital CMR documents in the form of Ricardian contracts logged on the blockchain.
According to Mattias Bergström, the creator of the dCMR prototype,
The new dCMR technology will make the documentation of Freight Transport increasingly traceable through digitised transport documents.
Bergström adds,
This will in turn increase the trust between logistics partners and cut unnecessary costs for transporting goods.