May 8, ZTO Express, the leading express delivery company in China, has released a industrial blockchain lab report titled Blockchain Substantialization: An Endogenous Co-creation Eecosystem of ZTO Express. It is also the first report published by an logistics enterprise in China.

The report was consisted by 5 chapters in 14 sections which involves multiple aspects: multi-centralization, distributed ledger, credit constraint and encryption key thinking are all included. ZTO also uses the concept of blockchain use cases to explain how this emerging technology could be used in ZTO Express’s business model.

ZTO brings out the new concept of “federalism” for the the organizational structure for franchise logistics enterprises. In the report, ZTO also prospects the future adoptable blockchain applications in the express delivery industry.

ZTO Express is a Decentralized Autonomous Organization (DAO). Blockchain and DAOs share characteristics in distribution and P2P. The centralized power-controlling management mode must be replaced by the new concept with core component of community and democracy. The traditional franchise mode also need to be transformed to a federalism mode.

According to the report, two main application scenarios have been brought out: the quality tracing of agricultural products and the interconnection of cross-border e-commerce market.

Jin Renqun, director of ZTO’s Development and Research Center, emphasized that,

“This report is aiming to arouse a relevant discussion and rational thinking of an advanced technology within this industry. We are not flattering blockchain technology and we understand that there is no such model could be used in all the scenarios or meet all the requests.

However, ZTO would face a seven-billion business value within 3 years, and the whole express delivery industry is under intense pressure. It’s time for us to join hands together to optimize existing express mode and transform this emerging technology into a new productivity.”