4 minute read
Timber Chain in Action
Anna Roberts, head of business development at iov42, reflects on how this gamechanging, technology has been transforming the supply chain, from sawmills in Eastern Europe, to the tropical hardwoods of Peninsula Malaysia, to warehouses in the UK.
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n 2021, iov42 launched an innovative blockchain-inspired timber supply solution, in partnership with Preferred by Nature: Timber Chain. Specifically designed to tackle the notorious challenges and risks that have defined the timber industry, including corruption, lack of transparency, and ever-evolving regulations, Timber Chain was quickly embraced by Carl Ronnow, a global wood trading company of over 30 years.
The tracking of complex supply chains within the timber industry has always been problematic, regardless of the size of the supplier, as any market built around the growing of produce will undoubtedly face difficulties. Unpredictable weather, political volatility and the merging and disbandment of traders have all historically challenged the timber sector. But what impacts supply chains the most is the mismanagement of material due to a lack of clarity. This is where DLT, or distributed ledger technology, can help. It’s a system of recording information in a way that makes it impossible to change or cheat the system. It’s also able to assist traders with meeting new changes in regulations and shipping policies.
Having recognised the importance of increasing levels of transparency and security, Timber Chain was curated to equip traders such as Carl Ronnow with a much-improved means of meeting their commitment to providing comprehensive, real-time due diligence for their buyers, supported by third party audits and verification. All data is stored and secured by iov42’s distributed ledger technology, ensuring complete data integrity and confidence.
The capability of blockchain-inspired technology to ensure regulatory compliance is even more valuable for the timber industry ahead of the upcoming EU regulation around deforestation-free products. Such regulation will inevitably need to be syndicated across other territories (including in the UK through the Environment Act 2021), so wood enterprises will need to adjust accordingly if they wish to continue trading as normal. Timber Chain has been able to provide Carl Ronnow with the confidence that they’ll be able to adapt to any changes quickly and easily, due to its ability to verify that organisations are compliant with set certification and verification criteria.
Unlike conventional methods, blockchain-inspired tools such as Timber Chain allow importers to have a complete set of shipment data, which in turn equips them to navigate uncertainties around interpreting EUTR, and the debate surrounding what constitutes due diligence. In this sense, Timber Chain can act as a vehicle for exporters to hold their information, so that each importer can use as much or as little of it as is necessary to fulfil EUTR (or equivalent) obligations.
This is proving to be revolutionary for the timber industry. Digital due diligence tools can support the importers in the auditing process, saving them a huge amount of time (months, in some cases) by allowing them to select relevant information in real time without having to request it separately. Timber Chain is also making it easier for importers to see all the stocks that a shipment comprises, and all the documents associated with those stocks; a feat which would otherwise be extremely difficult and labour intensive, enabling improved and more accurate data standardisation and validation. Having experienced the benefits of this time-saving tech, one UK importer commented: “We were getting this level of information infrequently in the past. Solutions like Timber Chain allow us to push back on our suppliers and hold them accountable. If they choose not to engage to the same extent as a company like Carl Ronnow, then we can simply decide not to trade with them. As a result, we now put Carl Ronnow at the top of our list of Malaysian suppliers.”
Given the initial success with Carl Ronnow, Preferred by Nature and iov42 plan to expand the service to accommodate other forest and agriculture commodities across Preferred by Nature’s areas of expertise. Through ongoing trials and testing, iov42 and its partners will continue to improve the usability of the tool with the ambition of further improving the data sharing process between the exporter and importer.
Reducing the time taken for exporters to input data will remain a key focus given its value to the sector in, for example, allowing for a smoother exchange of data between sawmills and exporters. iov42 also hopes to step up its collaboration with governments to enable improved efficiency of government document issuing and enforcement checks.
Timber Chain is an example of what is possible when technology is developed to address a real-world issue: in this case, the transparency, efficiency, and resiliency of international timber markets. Integrating identitycentric, trust-building technology with expertise in certification has set a new standard for supply chain management – one which is only set to go higher.
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