Before Walmart Canada deployed blockchain technology to pay trucking companies, the company and its carriers were often bogged down by invoice disputes. Up to 70% of invoices had some sort of issue where numbers didn’t align with company expectations.
The results were not good. Walmart personnel would lose time sorting out the long list of charges that go into each load. Meanwhile, payments to carriers were delayed.
“Life was a bit rough in terms of processing payments,” recalled Francis Lalonde, Walmart Canada’s vice president for transportation. “You want to process them on time. The carriers want to get paid on time.”
So Walmart turned to DLT Labs, a Toronto-based startup, and deployed a customized version of its freight invoice and payments system. By the end of August, the system had processed over 150,000 invoices, with fewer than 2% resulting in disputes.
That result came less than a year after the system launched at the Blockchain in Transport Alliance’s BiTA Symposium Chicago in November. It became the largest publicly known deployment of blockchain for freight payments.
“The transformation is pretty remarkable,” DLT Labs CEO Loudon Owen told FreightWaves.
Invoicing issues were ‘leaving dollars on table,’ Walmart executive says
The invoice for a single load of truckload freight often gets far more complicated than the base rate and distance traveled. Fuel surcharges, in particular, can take on a life of their own when a load travels through multiple Canadian provinces and into the U.S.
The sheer abundance of data points created almost limitless potential for invoicing issues to arise. Each represents an opportunity for misunderstandings, miscommunications and human errors.
“Nobody was doing anything on purpose,” Lalonde said. “In the end, dollars weren’t matching.”
Walmart Canada, the Canadian division of the global retail giant, is one of the largest truckload shippers in the country. It works with around 60 outside carriers to move millions of pounds of freight annually.
Lalonde has overseen carrier partnerships since joining Walmart Canada in 2018. After his first introductory calls with carrier executives, payment issues became a common thread.
As Lalonde and his team investigated further, it became clear that the payment issue represented something more than something aggravating the carriers. It was creating enormous amounts of additional work for the company and carriers alike without generating value.
“It was leaving dollars on the table,” Lalonde said.
The chronic payment issues also hung over carrier relationships. “It’s complicated to manage that if you haven’t paid the carriers on time,” he noted.
Walmart Canada decided it wanted to tackle the problem aggressively. That decision coincided with Walmart Canada’s CA$3.5 billion ($2.75 billion) expansion, which includes new distribution centers and supply chain upgrades.
“We want to build a world-class supply chain,” Lalonde said.
Rather than “leapfrog from old technology to old technology,” Lalonde continued, the company wanted to implement something transformational. It found it with DLT Labs’ platform based on blockchain technology.
Blockchain platform provides ‘single source of truth’ for shippers and carriers
The underlying technology behind blockchain is complicated in technical terms. But at its core, blockchain allows parties to transact through a shared ledger with ultra-high security.
DLT Labs specializes in blockchain-based solutions at the enterprise level. It worked closely with Walmart Canada to deploy and scale its freight payments platform, DL Freight.
The use of carriers’ existing systems is key to DL Freight’s smooth implementation. The platform serves at the bridge between carriers and Walmart Canada, providing a single ledger with consistent data.
“There’s nothing to fight over if there’s a single source of truth,” Owen said.
Invoices get paid and processed automatically. Discrepancies — when they do occur — are flagged for correction.
DLT platform becomes national standard for Walmart Canada carrier payments
Started as a pilot program, the platform now serves as the national standard for Walmart Canada carrier invoicing and payments. Meanwhile, the company is exploring additional ways to leverage DLT’s platform to improve load visibility.
DL Freight can handle a wide array of data inputs from internet of things (IoT) devices. It opens the door for real-time sharing and transparency on pressure points such as temperature-controlled freight and detention issues.
DLT Labs is now looking to court other companies to adopt DL Freight after the successful implementation at Walmart Canada.
“It’s a completely new paradigm for managing information and managing it securely,” Owen said.
Walmart Canada and DLT Labs’ efforts with blockchain are also getting attention. The Council for Supply Chain Management Professionals named them as a finalist for its Supply Chain Innovation Award.
Click for more FreightWaves articles by Nate Tabak
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