Circular Supply Chains Inc.

The Problem

According to a report by the Joseph Rowntree Foundation titled, FORCED LABOR IN THE UNITED KINGDOM, it states, “At the core of forced labor is the nexus between an individual’s vulnerability and a setting in which this individual’s work or services can be exploited for profit without too much risk of discovery or prosecution. Tackling forced labor therefore requires attention to both of these”.

That attention then, needs to 1) eliminate their vulnerability and 2) create a setting to ensure the potential for exploitation is continuously monitored for possible prosecution. Technology is already under development to address both of these simultaneously to eliminate forced labor in supply chains; a starting point to eliminating modern slavery wherever it occurs.

The Solution

Developing a platform for collaboration on the leading-edge technologies required to eliminate modern slavery allows ongoing research beyond supply chains alone and creating the team to make that happen is an underlying focus of this project with the development of a sustainable, long-term solution being the ultimate end goal. Collective action offers better results.

We have chosen the banana value chain as our first use case due to the enduring shelf life of green bananas and the ease of dealing with an autonomous product. The banana supply chain is also notorious for the labour abuses that it forces on its workers due to the imbalance of power between the production workers and the retailers that buy their products. But, to understand the inequality of this relationship and how to balance it better, we need to back up a bit and determine the causes of worker vulnerability and the setting that allows the exploitation. And to do that requires a deeper dive into understanding the supply chain between production workers on the farm and the retailers in your local supermarket.

The current supply chain for bananas (and most other produce) has the fruit grown, harvested, cleaned, pre-cooled and packaged into cardboard boxes at the farm which are then stacked onto wooden pallets and loaded into intermodal steel shipping containers (seacans) by local workers before being shipped by ocean freight to overseas markets. As soon as they arrive overseas they are trucked to local ripening centers that can rival the size of a football stadium where they are unloaded into temperature-controlled ripening chambers and exposed to ethylene gas, a catalyst found in nature that turns bananas yellow, tomatoes red and ripens many varieties of fruits and flowers found in nature. This natural climacteric ripening cycle in plants produces CO2 and heat as by-products of the ripening process which are easily monitored and controlled at the ripening center, but once the ripening process is started, it cannot be stopped.

After exposure to ethylene the fruit is reloaded and trucked to a distribution center (some DC’s have their own ripening chambers) which is often larger than the ripening center where it is unloaded once again and then stored until it is ready for distribution when it is loaded back onto trucks and delivered to retailers. This is a labor intensive chain of processes with a capital intensive asset base that is usually owned and operated by a few downstream power brokers focused on shareholder value. Very little, if any, of this asset base is owned by production workers and this is where the division of power becomes grossly out of balance. It allows these downstream power brokers to basically dictate the terms of production requirements (inputs, volume, timing), purchase pricing, terms of acceptance and terms of payment, any of which can easily create the setting for exploitation.

The vulnerability side of this equation is the result of the worker’s personal situation. Immigrants need sponsorship from an employer to maintain their working visas in that country and the threat of that visa expiring or the simple threat of dismissal can leave many workers vulnerable to the dictates of employers. This same working class is often uneducated so contractual agreements, if they exist, are not fully understood and may not even be prosecuted in countries lacking respect for the rule of law, so one can just imagine how much more vulnerable this leaves female workers.

This nexus between vulnerability and exploitation is an interplay of problems that has developed over many years and usually to the advantage of the power brokers. Many humanitarians have tried to balance the playing field, but this is easier said than done. These days, policy change needs to encompass environmental and social concerns as well as economics to enact meaningful legislation and policy change is just the tip of the iceberg in any effort to apply an effective humanitarian solution. And, well-intentioned humanitarians do not want to succumb to a never-ending role of support for the recipient. Therefore, the best solutions will teach recipients to become self sustaining, so they can gain the freedom to develop their own personal social surroundings for themselves, their families and their associates and build the social network required to maintain such achievements. As the old proverb says, “Give a person a fish and you feed them for a day, teach them to fish and you feed them for a lifetime”.

The Required Technologies to Make it Happen

Circular Supply Chains Inc. (CSCI) is a for-profit enterprise that is working with the public, private and philanthropic/impact investment communities to eliminate modern slavery in supply chains. The CEO of CSCI headed a company that handled reverse logistics for Walmart for fifteen years before changing his focus to the development of a fundamentally different supply chain structure called the Cargo Carousel System (CCS). A patented supply chain “system” that is technologically advanced, dramatically more efficient, environmentally superior, socially more responsible to those who work within it and adheres to the principles of a Circular Economy. The CCS represents the platform upon which we can further research the capabilities of new leading edge technologies to advance this solution beyond supply chains alone. First we’ll explain the functionality of the CCS itself and then we’ll describe the complementary technologies that, when combined with the CCS, will provide a sustainable solution to eliminate modern slavery in supply chains while providing an equitable alternative for everyone involved.

The CCS is a framework that supports a carousel like the one above. Each of the suspended platforms in the animated video replaces the wooden pallets that are currently being used in today’s supply chains. These platforms are then encased within a sturdy four-foot cubic box to create individual “modules” that protect contents far better than plastic wrap with the platforms acting as the base to support the suspended modules. Each module can be removed from the Carousel to free up space for another module to allow deliveries and pickups to be done simultaneously. The Carousel itself is a standardized design to ensure it can handle any and all modules but the modules themselves can be custom built to suit any purpose. Two Carousels are fitted side-by-side, each within its’ own framework as shown in figures 4 and 5 and the combined system slides into a standard intermodal steel shipping container or trailer.

The Banana Module is made of heavy gauge wire-welded aluminum mesh to improve air flow for temperature control and an even flow of ethylene gas to ensure controlled uniform ripening. It is designed as a rack to support risers and can be divided into smaller racks for easier handling.

Risers are stackable plastic trays that will be used throughout the value chain; at the packing house, in transit and as a retail ready display fixture. This design minimizes costly labor touch points throughout the value chain and allows retailers to swap out entire risers of dated fruit for fresh fruit simultaneously while using the same cubic module for supply and return. Dated fruit can be sent on to soup kitchens or recycled as biofuels without the need for further labor or separate trips for supply and return.

Additional Technologies

We have already developed an advanced SCADA (Supervisory Control And Data Acquisition) technology that is used in this system. SCADA systems are an advanced form of what is commonly referred to as the Internet of Things (IoT). This includes sensory chips for RFID (Radio Frequency Identification) and GPS along with a cellular/satellite communications system for real-time global tracking capabilities of each individual cubic module. We’ve also developed our own sensors for ethylene, temperature, humidity, light exposure, O2, CO2, shock, movement, etc. so the atmosphere can not only be monitored, but also controlled from anywhere in the world in real-time with alerting capabilities and continuous logging. From the farm to the retail store, the bananas never leave the intermodal container. They are loaded, transported, ripened, stored and delivered all in the same container or truck trailer to eliminate the need for costly, permanent ripening and distribution centers and their labor components.

Distributed Ledger Technology (Blockchain) is also utilized in the CCS in an advanced version of IBM’s Food Trust initiative that goes beyond food tracking to include digital certificates for each and every worker in the supply chain. These certificates uniquely identify the workers so it doesn’t matter if they’re immigrants or in non-registered status, they can be digitally identified with online verification to qualify them for banking, micro loans, health care, education, travel, etc. This identity certification process provides the registration required for the current international banking system to recognize workers individually, allowing them to act on their own behalf and gives them a voice in their own affairs to eliminate their vulnerability.

When Blockchain is combined with the Internet of Things, the same concept can be applied to the individual cubic modules of the CCS to uniquely identify each module. Matching digitally identified workers with digitally identified smallholder farmers or their cooperatives and assigning each farmer or cooperative with as many digitally identified modules as necessary holds the farmer/cooperatives responsible for their own modules. Female workers with their own modules are free to have their production measured per module and can be paid directly as individuals or in cooperatives. Utilizing a Grameen banking methodology (described below) is an option that holds individual workers of any status responsible to their cooperative to help support their cooperative when competing with the multinationals and without fear of reprisals.

Online certification programs administered through Blockchain can verify the individual workers, their cooperatives, their products and the payments for those products. Supply chain visibility also becomes continuously verifiable to eliminate the current problems of simply estimating time of arrival for shipments anywhere along the value chain. This accuracy of delivery times and visibility into what’s in the chain and where it’s at, is becoming an imperative for retailers in e-commerce.

Cash-based transfers can also be authenticated and recorded on a public or private Blockchain through a smartphone interface and used for immediate payment to individual workers or their cooperative for improved cash flow. Many different “smart” contracts can be automatically initiated to minimize administrative tasks while supplying an indelible audit trail that is reconciled with all members of the network in real-time; everyone’s ledger is reconciled at once.

The following paragraph is copied directly from the Grameen Banking website to give the reader a better understanding of the methodology and how a modified version of it fits into this solution:

“The Grameen Bank (“Rural Bank” in Bangla) is a for-profit commercial bank, which is based on the idea of social capital. It exclusively serves borrowers who join in self-organized, non-family groups of five that combine “peer pressure and peer support” for the process. The borrowers must go through a brief training period. During the training, they learn about the Grameen Method and formally organize a group of five. Two members are then issued small loans. These groups must meet once a week to repay the loans. With each loan successfully repaid, this increases the number of members who may borrow and the amount of each loan. If one member of the group defaults, the entire group is ineligible for a new loan. This cultivates strong incentives among group members to ensure the others’ business success and repayment. The social capital model allows the poor to bind together on a community level, while also being self-regulating and self-sufficient. This reduces the need for borrower oversights and promotes shared knowledge that can lead to entrepreneurial success. The Grameen Method also places the onus of screening and monitoring onto the borrowers themselves, and thus decreases the cost of implementing a program. The Grameen approach to the group-lending model fosters a powerful social network that produces social capital by engaging borrowers in weekly group meetings. These support networks also empower women to expand their businesses, repay loans and prosper in ways that were not made possible by solely providing financial capital.”

The Process

The CCS ripens the fruit in transit within an intermodal steel shipping container and then stores the fruit in the same container until it is delivered to the retailer. This allows us to eliminate the need for costly and permanent ripening centers and distribution centers while storing the fruit much closer to the retailer. The CCS functions inside the intermodal container; a weatherproof storage system that can be stacked as high as necessary while still allowing access to the products within. Humans no longer need to enter the container or trailer to access its contents so loading docks are no longer necessary. This is due to the CCS’s ability to physically rotate modules full of inventory out to the doors of each container so forklifts can access the modules no matter how high they’re stacked. It also ensures that no changes to existing infrastructure is required so existing assets are never stranded in our wake.

The CCS utilizes reusable, easily sanitized, aluminum cubic modules (the checkerboard cubes in the video) that eliminate the need for cardboard boxes and wooden pallets (wooden pallets use more of the annual hardwood harvest than all other uses combined). The reusable concept also allows this same system to offer a return trip of various products to where it originated from, doubling revenue potential and starting the cycle over again. Many areas of inland Asia and Russia do not have access to climacteric fruit because the ripening process is initiated near ocean ports so the shelf life expires before it can be transported such long distances. This also limits the return trip opportunities that might otherwise be available from these same remote areas. The untapped potential for the CCS in these markets is ridiculously big.

A study on the cost savings from the reduction in single-use packaging in the banana sector of Costa Rica alone is estimated to be USD $188,000,000 annually from using our system and, when combined with the ripening-in-transit savings, have the potential to undercut the current retailer’s landed cost dramatically. We believe this gives us the leverage necessary to change the status quo and insert our own form of fair play into global supply chains as we level the playing field for everyone. It is from this same thinking that we have decided to work with the nonprofit BananaLink to bring this system into reality. Federal funding from the Canadian government has already been secured to cover 50% of development costs and they require the balance of funding to come from an industry partner in cash or “in-kind” meaning the cash value equivalent of services or assets (i.e. trucks, software development, administration, hardware, etc.).

The CCS project acts as a collaborative platform for further R&D in Blockchain, IoT, Robotics, ICT, Cloud/Edge Computing, AI, and many other leading edge technologies that can be applied to supply chains on a fair and equitable basis to eliminate modern slavery globally and to alleviate the poverty it often creates.

We are always looking for further partners to help us advance this project to prove that modern slavery can actually be eliminated from supply chains by utilizing the Cargo Carousel System. It will require input from many different players, but among its ranks, this new enterprise will also showcase gender equality, inclusion and a selfless mindset as we move to develop multiple supply chains and demonstrate these capabilities on the world stage.

By convening partners to facilitate knowledge exchange, highlighting innovative investment approaches, building the evidence base for the industry, and producing valuable resources, CSCI seeks to accelerate the industry’s development through focused leadership and collective action. Our strategy is not about just complying with what’s right – it’s about transformation.

It needs no definition, modern slavery is just outright bullying that usually stems from human greed and an imbalance of situational power that ignores any definition of empathy and redirects the moral compass of humanity. We all have a right to free choices and fair participation in the affairs of the planet and the global economy. If we want to correct the historical misgivings of humanity, be it social, economic or environmental, we need to radically alter our thinking to develop completely new solutions that will sustain us well into the future. We believe the Cargo Carousel System is one of those solutions.