Koopman Logistics Group has successfully completed a shipment of finished vehicles using blockchain digital technology to accurately track each unit in real time and automate administrative transactions.

In an ongoing trial involving its Dutch customer PON Logistics, Koopman is moving vehicles from the PON compound in Leusden to dealers across the country. Koopman said it was the first time blockchain had been used operationally by an automotive logistics service provider.

Following work with IBM on the application of blockchain – the digital asset transaction ledger behind bitcoin – Koopman’s CEO Jon Kuiper said his company had been able to provide an accurate view of the vehicle’s location and status at each point during its delivery. The finished vehicle logistics provider has also used the technology to manage the automated transactions required through the delivery process, including electronic consignment documentation (eCMR) and proof-of-delivery.

The system uses the vehicle’s unique identification number (VIN) to track it from the point of production to its final destination. During that journey, the technology attaches all relevant data in the supply chain to the VIN, including geographical position, damage notices, transactions and any technical data, such as upgrades to the vehicle (customisation or software updates, for instance). As blockchain data cannot be altered once it is submitted, the collected information can be used as a legal record.

“Based on a VIN-based ledger approach, we can provide our customers with a solution that allows them to optimise their processes, get real-time information on the status of the vehicle and transact their administrative processes with their suppliers in a fully automated way,” Kuiper told Automotive Logistics.

Accurate visibility on the location of a vehicle in transit is important to OEMs, who often have a number of different outbound logistics providers moving their vehicles, each with their own reporting systems. Real-time tracking also means dealers can give customers a more accurate forecast of delivery times.

With the information gathered from the process, Kuiper believes logistics providers will be able to work with OEMs and other partners to redesign outbound networks and make them more efficient.

Blockchain also has the potential to give fleet operators a more accurate view from which they can refine the delivery process. According to Koopman, fleet owners generally manage local, national logistics processes, and without adequate IT infrastructure often suffer from the same visibility issues as OEMs, leaving them struggling to manage their processes in the most cost-effective way.

Achieving more accurate and efficient management of vehicle delivery is likely to become more important in coming years as the passenger car itself goes through some major technological transformations. Carmakers are already having to consider what autonomous, electric and connected vehicles mean for their businesses, as are transport providers.

Fighting fraudBlockchain technology also has important potential in the remarketing sector, which is susceptible to fraud at various points. Kuiper said VAT and mileage fraud were two of the biggest issues affecting the used car sector in Europe, with millions of vehicles sold cross-border every year and the authorities struggling to control the process.

A recent study published by the European Parliament (Odometer tampering: measures to prevent it) indicated that mileage fraud in the EU might be costing €5-10 billion a year. The report cited blockchain as a possible solution, as mileage information gathered through the odometer could be stored against the VIN in the blockchain ledger and made available to the eventual buyer.

In terms of VAT fraud, meanwhile, following the VIN through the supply chain would allow the location of any transfer to be accurately recorded, as well as identifying the receiver (in the e-CMR data). Sellers of used vehicles cross-border could therefore avoid being held responsible for any subsequent illegal transactions.

“In remarketing, you can store the data of the car, including the mileage, in the blockchain which is accessible for the buyer at the end of the supply chain – so no one can be cheated,” said Kuiper. “It gives the industry proof of delivery, provides the e-CMR, which is foolproof, and includes GPS data on the delivery location. This is of value to the remarketing company.”

Koopman has indicated that it intends to make the supply chain services and technology on offer available for all of its customers and to the market more widely in coming months, after further testing with key automotive customers.