By Sherree DeCovny, Co-Founder and Research Principal
One of the big promises of blockchain is to store and share data gathered from IoT devices. Putting sensors on equipment enhances track and trace capabilities, and enables actors along the supply chain to monitor conditions while goods are in transit, thus lowering risk. Storing the data on a blockchain not only provides a single view of the truth, but also prevents data from being falsified.
This is of great interest to those involved in cold chains. A cold chain or cool chain is a temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of refrigerated production, storage and distribution activities along with associated equipment and logistics, which maintain a desired low-temperature range.
Consider the pharmaceutical cold chain as an example. Many vaccines can lose potency if exposed too long to temperatures outside the recommended range of 2 to 8 degrees Celsius. In a literature review of 45 studies that assess temperature monitoring of vaccines in various regions of the world, UNICEF found that 33.3% of storage units in wealthier countries and 37.1% in lower-income countries contained vaccines that had been exposed to temperatures below recommended ranges. The proportion of vaccine shipments found below recommended temperatures was 38% in wealthier countries compared to 19.3% in lower-income countries. That means a huge amount of product is wasted, and large patient populations aren’t getting inoculated, which may result in a health hazard.
Zurich, Switzerland-based SkyCell has developed a delivery system to mend this broken cold chain. The company’s insulation technology reflects heat radiation, so when an airplane is on the tarmac, 96% of the sun rays are reflected so heat doesn’t enter the container. It also developed a new cooling technology. Chemicals stored in the walls of the containers keep the goods cool for as long as about 160 hours. More traditional products operate on a battery that drives warm and cold air through a compressor, but goods can stay cool for only about 32 hours.
The containers have been tested under extreme operating conditions. SkyCell’s hottest live shipment was at an ambient temperature of 70 degrees Celsius. The containers are more efficient because they’re smaller and lighter, so customers can save on air freight costs. They’re also made of 100% recyclable material.
SkyCell ships to more than 81 countries, and the largest pharma companies are among its customers. The company has about 1,000 containers in its fleet – all fitted with sensors – and it plans to double that number in 2018. Originally, the sensors were installed for quality control purposes because SkyCell subcontracts the handling, the pre-conditioning, and the charging of containers. The sensors record both ambient and internal temperatures, as well as humidity and the container’s location. That data is fed to SkyCell’s cloud-based servers and then stored on a blockchain.
“We can show the temperature and humidity surrounding these goods as long as the goods were in our container,” said SkyCell co-founder Richard Ettl in a new Chain Business Insights Chain Reactions podcast. “Through the blockchain, we can prove that this data was not falsified.”
Blockchain’s potential to bring down the cost of the cold chain is one reason why SkyCell started accepting payment in bitcoin and ether. When SkyCell rents a container to a customer in India, for example, it incurs around $150 in banking charges throughout the supply chain. It is cheaper to receive payment in bitcoin or ether – ether costs less than bitcoin – and the settlement cycle is reduced from two weeks to 10 minutes.
Over the next 18 months, SkyCell plans to install smart contracts for the various container types. A beta trial for certain customers is in the works for 2018, and an airline is already interested in participating.
The company also plans to introduce self-administering containers in about two to three years. These containers know that they’re being loaded, and they know through a smart contract who has rented them. They also know when they’re unloaded, so they can terminate the contract and start the settlement of the invoice. Self-administering containers and blockchain will further improve cold chain economics, especially as the shipments shift to much larger volumes and smaller packaging in the direct-to-patient model.
In addition, SkyCell is applying its system in other cold chains such as the direct-to-consumer food industry through its sister company, Food Guardians. Today, food packages are shipped in Styrofoam boxes chilled with dry ice or frozen gel packs. These boxes are quite heavy, so freight costs are high. SkyCell can reduce costs to less than $1 per day by making smaller boxes with thinner walls and making them reusable.
SkyCell isn’t the only company innovating in this space. San Francisco, CA-based Chronicled also offers a cold chain solution that features disposable sensors that provide temperature monitoring with automatic alerts and continuous visibility. Its technology and products are deployable via smartphone and Near Field Communication (NFC). The cloud-based solution has a blockchain back-end, and it can be integrated with ERP and supply chain solutions. IBM and SAP have a joint initiative to integrate IoT and blockchain for the pharmaceutical cold chain as well.
Chain Business Insights believes that these types of applications and underlying technologies are critical to ensuring the integrity of cold chains, promoting safety and enabling regulatory compliance. We look forward to monitoring innovations in the space and keeping our clients abreast of the latest developments. Right now, you can hear more about SkyCell and its offering and plans in this episode of our Chain Reactions podcast.