Blockchain – more than a buzzword
While the most well-known use of blockchain is in the cryptocurrencies such as Bitcoin the applications of the technology go far beyond. Essentially is a digital ledger of transactions, it comprises a database that is widely distributed, a database that has all data chronologically stored. The data is stored in blocks and can be viewed by everyone in its network.
As an industry, logistics demands some baseline qualities: security, accessibility, safety and transparency – and blockchain is essentially built on bringing all these benefits to life and adding some more. Blockchain technology can be used for any exchange, agreements/contracts, tracking and, of course, payment1.
Benefits for commercial road transport are also pretty straightforward – reduce the burden of documentation, cut cost and decrease the amount of manual administration required, facilitate loading and route planning as well as automate some of the driver responsibilities. Let’s explore some of the above in a few more details.
Enabling transparency that benefits everyone
One extremely important goal for businesses is to make things transparent to their consumers. Through blockchain technology, consumers will easily be able to follow their products’ journey before it reached their hands. They can access all the processes that their product went through, from manufacturing to packaging, supply to delivery.
Improving transparency within the supply chain is also a trend strongly supported by some shipping giants, like UPS2:
“The shipping company UPS joined BiTA (Blockchain in Transport Alliance – author) with the hopes of increased transparency between the different companies in the supply chain as well as looking at how blockchain can be used in its custom brokerage business.”
Streamlining the supply chain and cutting cost
Blockchain can also be used to streamline the supply chain, reducing speed and human interaction and enabling machine-to-machine communications. From document management and shipment tracking to acting as an enabler for the internet of things (IoT) and facilitating through use of radio frequency identification (RFID), quick response (QR) codes and Tags, blockchain allows vast amounts of data to be stored in a decentralized yet secured way, processed rapidly and be accessed on the fly.
All of this means cutting shipment costs and reducing the cost of administration and documentation – which reportedly accounts for one-fifth of the world’s total $1.8 trillion annual shipping costs.3
Enhancing security as a given
Security is another important feature that blockchain technology offers. As it stands, the information stored in blockchains is unalterable and immutable, meaning that it is nearly impossible for someone to make changes to them partly since the necessary computations are performed by multiple machines in a decentralized way.
Furthermore, even someone would be blunt enough to have a go at doing it, it would become plain to all the parties on the network since blockchains can be viewed by the public.
It’s closer that perhaps you might think
All of the above sound quite futuristic, right? Well, the widespread use of blockchain technology might actually be closer than you think.
Maersk were the first major logistic player to partner with IBM in 2016 to use blockchain for shipment tracking. 4 Both companies have used the technology to trace a container of flowers that sailed from Mombasa, Kenya to Rotterdam in the Netherlands. Since then, the pilot has grown into a full-size joint venture between the two parties, who today through establishing partnerships with major packaging producers are and various ports and customs offices aims to reduce friction in the record keeping in within our industry and create an open system where transparent transactions are at the heart of success. 5
But Maersk and IBM are, by far, not the only major logistics player to see potential in the technology. The BITA (Blockchain in Transport Alliance) – a governing body for the application of the technology in the transportation industry, now has over 60 members, with over 300 applications on the way.3
So, what does this mean for you?
We live in a world where technology is rapidly changing the landscape of our everyday lives. As a technology, Blockchain is still in a nascent level of development, but it is set to drastically change the way we conduct business, and the logistics industry is not any different.
Acting as a security layer, blockchain applications within Logistics can help create a system that is more efficient, that consumers invest greater trust in, that transporters and suppliers can rely upon. An ecosystem that is transparent and secure. And this revolution is happening now, so the timing is right to get on board.