"We're quite confident that it has big, big implications in supply chain, transportation and logistics", Chief Executive Officer Fred Smith said at a blockchain conference in NY on Monday.
FedEx will initially apply blockchain to tracking applications within its palletized freight segment, and is also exploring tests of blockchain for minimizing disputes and discrepancies by creating a common data language, FedEx spokeswoman Jennifer Caccavo Cordeau said in an email. He wants to embrace blockchain technology to establish and maintain to be on the top in a rapidly changing digital world. According to the director of the company, at the moment one of the most global problems in the logistics sphere is a large number of legal obstacles that accompany cross-border transportation.
Smith explained that one major issue that the logistic and transportation industry has faced is the "massive amount of friction" in cross-border logistics, since different countries have different standards, regulations and terminologies.
"Blockchain has the potential to completely revolutionise what's across the border, " he said.
For this goal, in the winter, FedEx, within the Blockchain in Transportation Alliance (BiTA), began cooperating with other corporations in the study of innovative blockchain solutions that could be further implemented. What blockchain has is a potential for the first time ever to make the information available for everybody.
CIO Robert Carter, also speaking at the event, added: "We move easily 12 millionshipments a day and that moer than doubles during the peak seasons".
Replying to Don Tapscott, the panel's host, on how he convinced Smith to approve the decision on blockchain exploitation, the chief answered by saying that it was actually the other way round. "We're operating on this place between the physical world and the digital world".
FedEx's interest in the Internet of Things and Blockchain technology is part of the company's strategy to ensure better customer service and reduce competition.
By introducing a shared, transparent and traceable chain of custody that runs throughout the shipping industry, Smith called blockchain technology "a game changer". Companies that fail to adopt blockchain and other new technologies will face "extinction", Smith warned.