Logistics Firm Kuehne + Nagel Deploys Blockchain For VGM Portal To Improve Transparency

Announcements, Blockchain, News | September 12, 2018 By:

Transport and logistics company Kuehne + Nagel has applied blockchain technology to its Verified Gross Mass (VGM) portal.

Kuehne + Nagel is a global transport and logistics company based in Schindellegi, Switzerland. It provides sea freight and airfreight forwarding, contract logistics and overland businesses, with a focus on providing IT-based logistics solutions. Its freight forwarding services, include the necessary arrangement for the transport of goods by road and rail. Its contract logistics unit offers warehousing and distribution services.

In 2016, the company launched its VGM portal to give shippers a convenient solution for filing their VGM declarations as being required for seafreight shipments in consequence of the International Convention for the Safety of Life at Sea (SOLAS). The portal is now utilizing blockchain technology to facilitate data exchange between different partners.

“Kuehne + Nagel for the first time leverages the benefits of blockchain technology in a large scale operational environment with 800,000 transactions per month while upgrading its well-established VGM Portal,” the company said. “The enhanced solution provides shippers with new features that improve the ease of doing business as well as the degree of transparency on the VGM status of all customer shipments and the history of persisted information.”

In addition to blockchain’s natural features of immutability and traceability, the logistics company upgraded the portal to strictly fulfil industry requirements of confidentiality and data privacy. All information submitted via the portal is stored on-chain, removing the need for additional off-chain communication channels.

Martin Kolbe, Chief Information Officer Kuehne + Nagel International AG, said that the list of promises related to the use of blockchain in the logistics industry is long, but actual real-world applications are hard to find.

“The Kuehne + Nagel VGM Portal solution jointly developed by our seafreight experts and our IT team allows us to get a true hands-on experience with blockchain technology in an on-premise production environment and with a high number of transactions,” Kolbe said. “Our customers benefit from a tamper-proof solution for information exchange with third parties with improved efficiency and higher transparency.”

In March of this year, Kuehne+Nagel, along with several other firms, successfully tested a blockchain solution that eliminates the need for printed shipping documents. The solution reduced the requirement for data entry by up to 80 percent, simplified data amendments across the shipping process, streamlined the checks required for cargo and reduced the burden and risk of penalties for customs compliance levied on customers.

“Kuehne + Nagel engages in a number of blockchain projects with customers, suppliers and governmental bodies addressing industry challenges in various domains, as the full potential of blockchain can only be exploited when collaboratively working together with business partners,” said Kolbe. “Our involvement in a consortium engaged in the digitalization of bill of ladings for seafreight is the best example. Operating the VGM Portal on blockchain in an operational high volume environment delivers valuable learnings and expertise for the development of joint blockchain applications.”