Using technological devices (IoT) to monitor environmental conditions

The world of technology – The global import and export of goods at the moment is more exciting than ever, especially food items. The use of Australian beef in Japan, tropical fruit in the US or Alaskan seafood in Europe has become a very common practice. This is achieved through a smooth global logistics system. To keep food in the freshest condition and best quality, shipping companies use a special container with a cooling and ventilation device (Reefer Container). Trucking companies use Refrigerated Trucks. Goods are also stored in cold storages that ensure important environmental conditions.

The supply chain of foods or products with appropriate environmental requirements, known as the cold chain, includes products: dairy products such as milk, butter, cheese- apricot, yogurt, ice cream; seafood; meat; fruit; vegetable; fresh flower; alcohol; drugs and vaccines.

Problem

However, statistics from the World Resources Institute show that, across the entire food supply chain, up to $750 billion worth of food is spoiled and wasted every year. The main cause comes from unsafe transportation conditions, for example: temperature, humidity are not up to standard. This amount of spoiled food accounts for nearly a third of all food produced globally, or 1.3 billion tons of food annually. This amount of wasted food is enormous, and has additional environmental consequences. 3.3 Gigatons of Carbon Dioxide released into the environment from spoiled food, equivalent to 7% of global emissions – statistics by the United Nations' Food and Agriculture Organization – FAO). For other commodities, statistics also show, 10-25% of wine imported into the US is damaged due to excessive heat during transportation. 20% of the world's drugs are substandard and are destroyed because the transport process does not guarantee the temperature. In the pharmaceutical industry alone (Pharmaceuticals), losses amount to $35 billion annually. [first]

In addition to damage to the value of goods, damage to reputation is quite significant for both the shipping unit and the company that supplies, manufactures, and exports. As an example, Sorting Table, a premium wine importer in California, received a container of Italian wine that did not meet its temperature requirements in transit. Although the quality of the wine tested did not change much, the company decided to cancel the entire $200,000 shipment to preserve the company's reputation. [2]

Insurance costs for frozen products are quite high, due to potential risks from human error (not checking and monitoring continuously) and equipment failure (damage of cooling equipment, failure of monitoring equipment). ). Sometimes, the error is due to the carrier's intention to save energy. The average cost of international marine insurance for frozen meat is 2.62% of the value of the shipment. [3]

Solution

Monitoring, measuring, evaluating, finding gaps in the process, increasing monitoring are ways to reduce damage. The solution to this problem is to use an electronic device that monitors environmental conditions, with an internet connection to send data continuously to the monitoring unit (IoT Device). Data on environmental conditions during the transportation of goods is a very important and valuable digital asset.

Blockchain technology can contribute to improving IoT Devices, making information tracking more secure and transparent. Instead of just one party, for example a shipping company, collecting and managing data sent from sensors, now all stakeholders can participate in this process. Specifically, each IoT device is part of a peer-to-peer network. Data is distributed to many storage devices owned by many parties such as shipping lines, customers, insurance companies, banks.

Benefit

The benefits of applying Blockchain are:

• Increase data security: distributed, instead of stored in a single place. This makes it much more difficult for hackers to attack the system or change information.
• Reducing investment costs: investing in a highly secure system that stores data from IoT Devices is very expensive, especially when this investment comes from only one party. Investment for the Blockchain system will be much cheaper and the costs are evenly distributed among the participants.
• Shipping customers can participate in the process: customers can install their own IoT devices or contribute data storage devices to participate in a data sharing network using Blockchain.
• Increased data reliability: data on the blockchain cannot be unauthorizedly modified, and cannot be deleted. The investigation of the cause of damage to the goods will be faster and more reliable. As a result, it increases the carrier's liability, reduces insurance costs, and can be used as evidence in disputes and lawsuits. Moreover, because the data is highly reliable, it can be used in Data Analytics to help synthesize, evaluate, and analyze to increase efficiency, or as input data for artificial intelligence applications. AI in Logistics. [4]
• Reducing investment costs in refrigerated containers: there are some items, such as many drugs, that do not have strict temperature requirements, but to ensure compliance with Good Distribution Practice (GDP) laws, carriers still using refrigerated containers. If it is possible to replace refrigerated containers with conventional containers with IoT tracking and secure storage by Blockchain, companies can use conventional containers, save a lot of costs and still ensure standards. of GDP. [5]

Compare traditional data storage and tracking methods and systems using shared networks on Blockchain.

Practical application

Large and reputable transport companies have been applying this method. For example, Maersk Line has invested in equipping sensors in refrigerated containers and connecting to the internet using mobile phone waves to send data, for its 270,000 refrigerated containers.

In some countries, such as Australia and New Zealand, there are standards that require businesses in the wholesale and import-export industry to have high safety storage and tracking measures: Food Standards Australia /New Zealand (FSANZ). It is no longer appropriate to store information on paper and companies are rushing to apply digital technology to their import and export activities. [6]

SAP, a multinational enterprise software company, with offices in more than 180 countries and 97,000 employees, has successfully tested a drug distribution management and tracking solution (Pharma Supply Chains) using IoT and Blockchain. 2018. IBM, a multidisciplinary company in the technology field, operating in 177 countries with more than 350,000 employees, has developed its own service that allows to easily connect IoT devices to Blockchain [7]. Global shipping company DHL, has been experimenting with applying Blockchain to track and store information every step of the way of pharmaceutical items. [8]

Swiss Post has developed its own IoT device called ThermoCare, which is used to monitor the temperature of medicinal items. Data from ThermoCare is stored on the Blockchain, and can be tracked and audited by customers, quality control personnel, insurance companies. [9]

According to research by Deloitte, consumer and manufacturing products are leading in terms of Blockchain application. By 2020, the consumer industry will spend up to $40 billion on IoT applications, Blockchain, and technology services. Enterprises including Carrefour, Dole, Driscoll's, Golden State Foods, McCormick & Co., McLane Co., Nestlé, ShopRite – Wakefern Food Corp., Topco Associates The Kroger Co., Tyson Foods, Unilever and Walmart have formed an alliance opportunity to apply Blockchain for connecting and sharing information obtained from the tracking system.

The above figures show that the potential of Blockchain and IoT applications, especially tracking of shipping status, is enormous and is being researched and actively applied by companies.

[1] https://arviem.com/trends-food-supply-chain-practices/

[2] https://wineindustryadvisor.com/2016/07/11/heat-damage-fine-wine

[3] https://www.cargoinsurancecenter.com/cargoinsuranceonlinerates.htm

[4] https://www.joc.com/international-logistics/insurance-sensor-policy-simplifies-shipper-damage-claims_20180508.html

[5] https://www.morethanshipping.com/temperature-sensors-in-cargo-containers-making-insurance-claims-easier/

[6] https://www.supplychainbrain.com/blogs/1-think-tank/post/28629-heat-proofing-cold-chains-with-blockchain

[7] https://www.computerworld.com/article/3284024/iot-could-be-the-killer-app-for-blockchain.html

[8] https://www.logistics.dhl/content/dam/dhl/global/core/documents/pdf/glo-core-blockchain-trend-report.pdf

[9] https://www.digitalistmag.com/iot/2019/01/30/swiss-post-revolutionizes-pharma-shipments-with-blockchain-iot-06196186

[10] https://www.forbes.com/sites/louiscolumbus/2019/01/13/top-10-ways-internet-of-things-and-blockchain-strengthen-supply-chains/#68ef8d435e4e