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Home News China Federation of Logistics & Purchasing Kicks Off Blockchain Application Sub-Committee

China Federation of Logistics & Purchasing Kicks Off Blockchain Application Sub-Committee


Initiated by a Chinese Blockchain startup, logistics companies and financial institutions – a new organisation was recently formed called the Blockchain Application Sub-Committee. It was formerly initiated by the China Federation of Logistics & Purchasing last week at the 2016 Fintech Global Summit.

The Sub-Committee will be focusing on the promotion of Blockchain technology in logistics by introducing Blockchain technology and business training, R&D standards of Blockchain for logistics, Blockchain-based company credit mechanism and finally the total upgrading and re-direction of the logistics supply chain industry.

Liu Yang, CEO of Shenzhen Digital Singularity said:

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Blockchain by nature enjoys high accountability, anti-counterfeiting ability and immutability. As of the past the technology was mainly used for Bitcoin, while nowadays, in the financial sector, the application of the technology is witnessing a mandatory trend.

Liu Yang went on and said that the procedures of logistics are so long that problems occur constantly.

“Problems like the loss and mistakes of cargo delivery require powerful tracing ability. It is obvious the Blockchain technology can perform well for logistics in that regard. The China Federation of Logistics & Purchasing has foreseen the incoming profound impacts from Blockchain technology with overseas counterparts launching similar researches. So the Association took the lead by founding this Sub-Committee, hoping that the introduction of Blockchain technology can tackle the existing problems in logistics as well as tapping into the financial sector.”

Liu Yang added that Shenzhen Digital Singularity previously has its business mainly focussed on Bitcoin, for example,, and thus have developed sound R&D capabilities of the Blockchain technology.

For the Sub-Committee, Digital Singularity will be the principle Blockchain technology provider, responsible for the making of standards. Liu Yang will also run for the presidency of the standard committee. Liu Yang expressed the wish to promote standard-making in the industry as well as to provide comprehensive Blockchain solutions that are capable of addressing real problems in cooperation with traditional logistics and procurement companies.

Blockchain Technology Expected to Significantly Improve Operational Transparency

Recent years saw the rapid rising of the logistics supply chain in China with accelerating competition and merging. Logistics companies with sound supply chain management capabilities are rising, along with improving third-party supply chain management abilities.

However, the upper stream of the supply chain are mostly small and mid-sized companies with low credit ratings. They are regularly turned away from banks’ funding services. The conflict of the capital demand and availability is deepening affecting their importance on the supply chain.

Logistics, Capital and Information are three factors pivoting the supply chain… while the Capital is the main hindrance for the mid and small-sized the companies and their ability on continued service and this will take a toll on the national economy as a whole if this goes on.

As the central government demands,  finance should serve for the development of a tangible economy and the Association also did tremendous work on improving the environment. But, the credit issue is still turning these companies into homeless children.

Liu Yang considers Blockchain technology to be the cure.

Blockchain can be served to tag and anchor the credit rating of supply chain companies if with the cooperation from upper and lower stream participants.

As of this moment, according to Liu Yang, the focus is on traceability and efficiency.

“On-Credit orders are big concerns for the industry, that upper stream companies cannot have timely payment from big companies – for instances – one month of delay is commonly seen.”

With layered re-contracting, the drivers will hurt and drivers cannot pay on credit, they pay in advance. That’s why terminal small companies are struggling. Banks simply turn away as  they need factories and warehouses as collateral.

“But Blockchain technology can save the day by giving the companies’ financials transparency to the extent that the financial institutions can understand their operational status thus ultimately removing the hindrance for loans,” he added.

Blockchain Technology to Dramatically Sharpen Logistics Efficiency

With the founding of the Blockchain Application Sub-Committee, Digital Singularity is taking the lead.

Liu Yang considers this a proof of the company’s might. The four founders of the company were formerly with Huawei and Tencent, and have experience of designing large system standards.

The complexity of logistics equals that of the telecommunication industry and Blockchain standardization is the answer to the industry.

From the value transfer of Bitcoin in its early days to the transfer of physical objects in the real world, Blockchain is growing. Liu Yang believes that in the near future, the perfect combination of Blockchain technology and logistics industry will tackle the financial hindrances in logistics, and significantly improve the efficiency. 

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