Logistics, the lifeblood of most of the businesses in the present era, is evolving quite speedily. As many disruptive technologies are all set to make a trailblazing entry into the industry, particularly the blockchain technology, the industry is standing at the cusp of a digital transformation. From food to pharmaceutical, and consumer electronics to heavy machinery, it is the logistics that bridge the gap between manufacturer, distributor, retailer, and consumer. And, in the age of e-commerce where everything is fast and forward, the efficiency of the sector relies a lot more on supply chain and logistics. It is the logistics that helps businesses to deal with competitions and catalyses the economic growth of progressive nations.
Since inception, blockchain has already revolutionized many industries; the benefits that blockchain offers for all those involved in the entire supply chain industry are countless. Let’s discuss a few of them:
1. Blockchain technology means end-to-end transparency
Transparency for the customers has always remained a challenge for the logistics industry. From the manufacturing site to the doorstep of the end customer, there are many middlemen involved in the complex process. Using the blockchain applications, the customers get more detailed information about the product and track its status as the entire network of chains is transparent and accessible to the customers. All the participants from manufacturer to customer in a given blockchain system have equal access to the exact details and information of the order; from dispatch to delivery.
Here, the trust factor comes into the play! The customer can simply look into the system and get all the essential information regarding the product, manufacturer, supplier, service centre, etc., and provide instant feedback to the service provider for further improvements. Apart from customers, the auditors can also leverage blockchain technology to do a simple calculation of time, money, and resources invested for a particular order because all the information is stored in the immutable blocks.
2. Secured data means secured delivery
The ownership of digital assets such as data is, undoubtedly, integral to small merchants and businesses. But, digital commodities are always vulnerable to being hacked—exactly the problem which Blockchain is fit to solve. The small business or merchants can simply manage, store, and share their ownership of digital assets such as copyrights, data, and customs documents, etc., on a simple-to-use platform built using blockchain.
All these digital assets are completely secured on blockchain technology as these cannot be altered by anyone across the network. Moreover, if anyone tries to access this in an unauthorized way or tries to make changes, the time-stamped details about the attempt are recorded. Hence, it also helps supply chain entities in detecting any suspicious activity at immediate.
3. Encoded information means no discrepancies
During a Connected Fleets Conference took place last year in Atlanta, it has been brought into the limelight that about $140 billion dollars stuck up in disputes in the transportation industry every day. A sort of blame game goes on and on between the supply chain participants about the exact amount of the consignment. In such a case, smart contracts based on blockchain technology come to great use as many people believe it will be replacing lawyers!
A smart contract is a computer code that runs on blockchain with a predefined set of rules or conditions on which two or more parties enter into a mutual agreement or transaction. As soon as the conditions are met, the agreement or transaction is enforced automatically. And, these conditions cannot be modified at any point in time, but only can be met. Unless these conditions are met, the transaction will not be done. Therefore, blockchain establishes trust among the parties and eliminates such frauds or risks.
A recent example of blockchain technology in ocean freight is IBM’S Tradelens Blockchain Shipping Solution. Developed in order to facilitate more efficient and secure global trade, this blockchain enabled solution will digitize the supply chain workflows and enable the end-to-end real-time shipment tracking.
The digital transformation of the business and the proliferation of e-commerce are creating unique challenges for the brick & mortar establishments, but for logistics companies, they are the true Messiahs. On the one hand, blockchain technology is bringing unprecedented business opportunities to the sector; its effective utilization is also detrimental in reducing the transit time. All in all, blockchain technology is going to be a desired blessing for the logistics companies in the future.