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DL Freight forWalmart CanadaA NEW ROLE MODEL FOR THE INDUSTRYLABSInformation You Can TrustDL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRYwww.dltlabs.com1
LABSTABLE OF CONTENTSWalmart: Global Innovator . 3Payment Problems . 3Freight Invoicing Is Broken .4Distribution is the Key to Success .5The Road to Shared, Immutable Information. 6Benefits for Freight – for Both Carriers and Shippers.6Walmart Canada’s Internal Champion, John Bayliss .7The DLT Labs Edge. 7DLT Labs Team .8But Cobalt? .860 Busy Days . 9Eleven Steps to Five .9Validation and Testing.1030-Day Rollout .11Carrier Roll-out: Carriers Can’t Wait .11How it Works: The DL Freight Solution. 12Results . 13Cost Savings, Operational Leaps, Business Efficiencies.13Additional Value for Walmart Canada and Carriers .14Conclusion. 14QUICK NAVIGATIONFREIGHT INVOICING IS BROKENHOW BLOCKCHAIN WORKS FOR FREIGHTTHE DLT LABS EDGERESULTSDL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY2
DL Freight forWalmart Canada:a new role model for the industryWith a new freight management platform for its nationalcarrier network, Walmart leaps to distributed ledgertechnology in 90 days.The foundation of trade is trust. Unless you trust your trading partners, trade is impossible.Intuitively, we all know this – it seems simple. Yet, in the complex world of payment andlogistics, establishing trust is extraordinarily difficult.WalmartGLOBAL INNOVATORGlobal Leaders in DistributionWalmart is one of the world’s leadinginnovators, continually investing in newtechnology to manage one of the world’smost intricate businesses. Walmart’s abilityto constantly innovate has underpinned itssuccess from day one. Originally a bricksand mortar company, today Walmart is oneof the world’s fastest growing e-commerceorganizations. Walmart provides exceptionalvalue around the globe to millions ofcustomers – by leveraging innovation.Logistics are critical to Walmart. Walmart’s earlysuccess was built on excellence in managing freight.Payment ProblemsInvoicing and payments are increasingly unsatisfactory business problems in the commercial world.For organizations that process many transactions or deal with multiple vendors – from banks tomines, from to retail to grocery, from distribution to consumer product companies – invoicing andpayment processes pose serious challenges to efficiency, margins and security.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY3
FREIGHT INVOICING IS BROKENFew freight situations play out as contracted. The combination of accessorial charges, weather,and road and load logistics make almost every shipment unique. In a transportation network,there is a fixed charge per load, plus the addition of approximately 200 data points for each truck.The benefits of interconnection are undeniable, but the amount of data associated with thedelivery of 500,000 shipments annually overwhelms legacy systems. Invoices need to beaccurate, with current information, which is hard to establish with so many moving parts inantiquated systems.Estimates of the number of disputed invoices in the industry hover around a staggering 70%.The challenges are only mounting under the twin forces of rising e-commerce demand anddecreasing carrier availability.For shippers and carriers, the information exists in silos and is being calculated independently andsent back and forth to one another via manual exchanges. Inevitably, the invoices don’t match,forcing disputes and reconciliations. It’s not working, for either carriers or shippers.Freight Invoicing is Broken 140billion USDEvery day, 140 billion is tied upin disputes and reconciliations forpayments in the transportation industry dueto errors and omissions.20%increased costsProcessing and administration costs haverisen as high as a whopping 20% oftransportation costs.29billion milesLTL: truckers drive an estimated29 billion miles per year withpartial or empty truckloads.A staggering 70% of freight invoices are disputed, due to inaccurate or missing information.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY4
The goal as acompany is toDISTRIBUTION IS THE KEY TO SUCCESSFrom the outset, Walmart’s company founder SamWalton knew that excellence in freight and logisticswere the keys to success. He was known for visitingWalmart truckers at the start of their 4 a.m. shifts,sharing donuts and stories to find out what was working in the stores and what was not (he apparently gotthe most frank answers from the drivers).Today, the Walmart distribution operation is one ofthe largest in the world. Excellence in distribution andlogistics remain keys to Walmart success.have customerservice that isnot just the best,but legendary.- Sam Walton -From the outset, Sam Walton knew that excellence in freight waskey to Walmart success.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY5
The Road to Shared,Immutable InformationStarting around 2010, visionaries in the fieldof secure transactions had their eyes on anexciting technology development arising froma branch of cryptography – called blockchain,or distributed ledger technology. Blockchainbreaks down one contracted event into anumber of smaller agreements, with eachstep agreed upon in real time: Instead of layering critical data behindmany digital walls, it is shared betweenpeers. Peer consensus provides accuracyand eliminates disputes. Critical data lives in a series of sharedblocks, encrypted and linked in a chainwhich traces back to the source – ablockchain – that establishes a tamperproof record of all transactions. Sharing makes it secure. Modifying thedata in any block requires modification ofthe entire chain – and consensus of theentire peer network is required for everysingle block. Sharing makes transparency possible. Requiring peers to agree on every newblock builds trust – a chain of trust.THE BASICS OF BLOCKCHAIN1234Transaction isrepresented online asa ‘block’The block is broadcastto every member inthe networkThe network thenapproves the validity ofthe transactionThe block is then addedto the chain and animmutable & transparentrecord is createdBENEFITS FOR FREIGHT – FOR BOTH CARRIERS AND SHIPPERS All participants contribute to each block ofdata – information can be trusted. Smart contracts automate approvals andexpedite customs clearances. Shared information eliminates timeconsuming manual processes andreduces disputes. Invoices are pre-populated with contractterms before the goods are shipped andtransport information is added in real-time,during travel, including the addition ofvariable and accessorial charges. Perishable and essential shipments benefitfrom increased visibility and early alerts.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY6
WALMART CANADA’S INTERNAL CHAMPION, JOHN BAYLISSJohn Bayliss, Senior Vice President, Supply Chain & Logistics at Walmart Canada, was anearly convert to the opportunities presented by blockchain for managing carrier contracts. Heknew carrier discontent was valid and escalating, and his team had researched the suitability ofblockchain for freight.The decision was made to look for a blockchain solution. The search was initiated by the businessunit, not the IT department.The DLT Labs EdgeDLT Labs was the sole respondent to the WalmartRFQ that offered a pre-built solution. Called DLFreight, it would be based on the company’s existingtechnology, DL Asset Track. Their proposal was 80%pre-built (using DL Asset Track), and 20% configuredto Walmart’s specific business requirements. Forany two companies or departments that must shareinformation to do business, the platform enablesthem to be on the same page with shared access toaccurate, secure, real-time information.Other tenders offered a pure custom solution,averaged an estimated 1.5 years to develop thetechnology, and started with a proof of concept.Our freightpayment problemwas a real painpoint for ourcarriers. We knewthese were systemsissues and notpeople problems.- John Bayliss Senior Vice President, Supply Chain & Logistics,Walmart CanadaDL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY7
I investigated overa dozen use casesfor blockchain,cranking a lotof numbers inthe process. Wedecided to pursuefreight, because itwould deliver thehighest, fastest ROI.- Sergei Beliaev EVP & Chief Strategy Officer, DLT LabsFormer CIO, Walmart CanadaDLT LABS TEAMDLT Labs boasted one of the world’s strongestblockchain teams, with a host of successfulimplementations, in a range of industries. Thecompany’s CEO had a successful career buildingcompanies, and the CTO had impressive technologyachievements formerly leading IT payment initiativesfor major banks around the globe. The team offered abusiness-oriented approach to harnessing the potentialof blockchain, based on proven platforms.BUT COBALT?Selecting a partner for a major initiative typically beginswith a short list of experienced providers. And yet:So, when DLT Labs came in to present, thepitch was to use their platform to developa freight solution. They demonstratedhow their platform traced grams of cobaltthrough 100s of payment steps, from mineto refinery to batteries – just as complexas freight! They said they could turn thecobalt configuration into a freight invoicereconciliation solution in 60 days. Sitting onthe other side of the table, I didn’t believethey could do it in 60 days. Not a chance!But I thought, “Even if it’s really 6 months,it’s better than 18.” And I was sure, evenback then, that the DLT Labs people wouldbe a good team to work with. Member, Walmart Selection TeamDLT Labs had – at the time – no experience in freighttechnology. Instead DLT Labs focused on their abilityto configure their platform, DL Asset Track, to meetWalmart’s and the carriers’ need to restore trust.One reason that Walmart leads in innovation, andthereby value, is its honed skill in knowing when tostart working with newer technology and when tochoose to work with newer entrants on the advancedtechnology scene. The deal was struck. DLT Labs gotto work to get Bison Transport, Walmart Canada’slargest carrier, up and running on a distributed ledgerplatform in 60 days.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY8
60 Busy DaysWalmart Canada deals with 70 carriers and receives 500,000 shipments annually. With over 200data points per truck in a freight network, this results in 7-billion potential invoice permutations.DLT Labs began collecting carrier contracts, learning how the tender – the request to pick up aload – is created, learning how the Bill of Lading is issued, and how the freight invoice processproceeds from there. Each of the 70 carriers has its own system; most were manual and uniqueto each company. Modeling and implementing carrier contracts in 60 days should have beenimpossible. Except for: The head start:DLT Labs had a platform already designed to track complex systems across multiple parties. The buy-in:Carriers could hardly wait for a streamlined process; Walmart Canada felt the same. Theinitiative was managed, start to finish, by the highly incented freight business unit, with theenthusiastic support of the carriers.ELEVEN STEPS TO FIVEDL Freight created a whole new workflow for Walmart and its carriers. It eliminates disputes andreconciliation by starting with accurate real-time invoice information. A simpler process was built,one that was more streamlined, more secure, and more transparent. The 11-step process wastransformed to 5. DL Freight automates real-time invoicing, payments and settlement, seamlesslyintegrating with carriers’ legacy systems.Asset & ShipmentDetails ConfirmedAssetDispatchedAsset Acceptedor Rejected123The 11-step process was transformed to 554InvoicePaidIssueInvoiceDLT Labs’ technology simplifies andoptimizes business processes throughour proprietary user interface.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY9
VALIDATION AND TESTINGDL Freight was integrated with Bison’s existing technologies, TMS system (WTMS), legacy EDIfiles, Fourkites (IOT), and Webhooks. 2,500 test invoices were executed. 50,000 loads processed.Asset & ShipmentDetails ConfirmedAssetDispatchedAsset AcceptedOR RejectedRejection Reason orAcceptance ProofNotifies NOCof AccessorialGenerateInvoice123456Old date Match orRaise DisputeInvoice Comparisonwith ExpectedIssueInvoiceUsing blockchain enabled us to look at inputs differently and find ways to optimize acrossthe entire supply chain.We’re now able to be much more efficient in how we process and manage the data aroundour relationship with Bison and all other carriers.JOHN BAYLISSSenior Vice President, Supply Chain & LogisticsWalmart CanadaMost critical was makingit through Walmart’sexceptionally high securitystandards. DL Freightcame through with flyingcolours, meeting alleight - 8! - of Walmart’srigorous security audits.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY10
RIGOROUS VALIDATION AND TESTING FOR WALMART CANADAIntegrationReal-timewith WTMS, Bison’s system, LegacyEDI files, Fourkites, Webhooksinvoice configuration and generationwith automated email notification50 000 8Loads processedSecurity audits passed170 ValidationFormulas configuredof accessorial unit against FourKites andNational Operating Centre2500 ConfigurationTest cases executed &passed successfullyof carrier specific fuel & ratetables on weekly basisThe promise of unmatchable security was delivered as expected. DL Freight passed all ofWalmart’s 8 security audits, validating the reliability of the platform.30-DAY ROLLOUTIn keeping with Walmart’s commitment toexcellent service delivery, and to ensuremaximum buy-in from its carrier network, thedecision was made to phase the rollout to theother 70 carriers over the next 30 days.CARRIER ROLL-OUT:CARRIERS CAN’T WAITOnce other carriers saw how frictionless DLFreight was, they were eager to get on board.Implementation was a simple procedure.By the time half of the carriers had beenadded, it was taking less than 3 days tocertify, train and onboard, a new carrier.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY11
How it Works:THE DL FREIGHT SOLUTIONWalmart Canada and its carriers have shared,real-time visibility of every shipment: Most invoice line items are pre-agreed blocksthat can be automatically added to the chainand thereby to the invoice. Both Walmart and carriers gain early warning ofpotential disputes. Often, these discrepancies can be solvedonce – never to be seen again – building new,permanent efficiencies into the process. Invoices are generated in real-time as costsare incurred.SHIPPER AND CARRIER KNOW STATUS OF EVERY SHIPMENTIN PROCESS ON TRACKIN PROCESSPOTENTIAL DISPUTE FOUNDDISPUTE DETECTEDREADY FOR PAYMENTWalmart AdminPAYMENT RECEIVEDWalmart FreightPayablesWalmart and its carriers have a current, shared view of every shipment. Newinformation ‘blocks’ can be added to this ledger only through agreement of all relevantparties – matching transparency with immutability and establishing auto-approval.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY12
ResultsThe joint leadership team operated with three goalsshared by Walmart, DLT and the carriers:Most invoice line items are pre-agreedblocks that can be automatically added tothe chain and thereby to the invoice.Improve efficiency in the ways ofworking today.Increase visibility and trust in the freightpayment process.All three goals were met. In addition to immediateand significant cost savings, Walmart has gained newprocess efficiencies, improved business relationships,and better data for decision-making.COST SAVINGS, OPERATIONAL LEAPS,BUSINESS EFFICIENCIESDL Freight delivered measurably improved metrics fromday one:System EfficiencyImproved resource use; improved tracking andtracing; early problem detection.AutomationInvoices are auto-approved upon submission.Faster TransactionsReal-time consolidation of business rules andtransactions eliminates reconciliation, reduceswait-time, and enables faster payments.Dispute EliminationDispute frequency is now less than 2% - industryaverage hovers around 70%.Disputes Drop DailyPreviously, it was possible to repeatedlydispute the same issue – with more thanone carrier.Once DL Freight went live, possibledisputes, such as lack of a line rate orregional fuel cost, were highlighted while oreven before they happened. The number ofdisputes dropped dramatically on adaily basis.PETE GOWANLOCKDirector Freight Implementation & Support,DLT LabsCost ReductionIncreased efficiency reduces all parties’ enterprisetechnology and manual administration costs.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY13
ADDITIONAL VALUE FOR WALMARTCANADA AND CARRIERSBlockchain enables a material advance in oursmart transportation network, with expeditedpayments and extensive cost savings.DLT Labs led the joint team to developsomething that should be a role model forthe industry.JOHN BAYLISSSenior Vice President Supply Chain & Logistics,Walmart CanadaThe technology seamlessly integrates with legacysystems so Walmart manages its supply chain thesame way as before, with only minimal staff trainingrequired. Essentially, DL Freight is an additive toWalmart’s business and a better way of managingcarrier invoices.Nonetheless, DL Freight has changed and improvedhow Walmart Canada operates.Walmart has: Better data for making business decisions;Walmart has visibility into 170 variables andknows what its true freight costs are. Transparency with accurate and specificinformation that can be analyzed and automatedto further improve systems. A platform that is simple to maintain, avoiding theheadaches of custom software. Reduced environmental footprint, throughpredictive analysis and the ability to plan routesand loads.Walmart Canada’s Senior Vice President,Supply Chain & Logistics, John Bayliss withLoudon Owen, CEO, DLT Labs.Photo: Melony Jamieson, Get it Done Improved, more trusting relationship with itscarriers. First successful use case of harnessing blockchainfor process efficiencies at scale.ConclusionDL Freight has transformed the relationship Walmart has with its national network of carriers.Reconciliation is a thing of the past: disputes are identified and corrected at the source; invoicesare now auto-approved. Walmart is enjoying measurable savings, seeing a plummeting frequencyof disputes, and experiencing an ongoing increase in efficiencies. The foundation of trade is trust.The foundation of Walmart’s success is excellence in distribution and logistics.With DL Freight, Walmart and its carriers have gained a better way of working together, one thathas replaced endless disputes with trust, collaboration and a shared view of business interaction.The significant savings and efficiencies achieved may be just the beginning of what this new wayof operating will deliver for Walmart.DL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRY14
LABSInformation You Can Trustinfo@dltlabs.comDL Freight for Walmart Canada A NEW ROLE MODEL FOR THE INDUSTRYwww.dltlabs.com15
Logistics are critical to Walmart. Walmart's early success was built on excellence in managing freight. DL Freight for Walmart Canada: a new role model for the industry With a new freight management platform for its national carrier network, Walmart leaps to distributed ledger technology in 90 days. The foundation of trade is trust.
