Blockchain technology has taken the world by storm. Most think that the blockchain is only related to cryptocurrencies when in reality it has countless applications. The effect of this revolutionary technology is being felt across the globe and is going to rewrite the rules of the business sector.
The logistics industry is the backbone of all business activities worldwide, it is a sector that moves trillions of dollars and that grows exponentially with each passing year.
The blockchain is going to change the landscape of the logistics industry. While companies such as IBM have already begun to experiment with corporate software and systems based on this technology, companies have begun to see the advantages that blockchain offers in the logistics field: fraud prevention, elimination of mismatches, increase in data transparency security, efficiency improvement, and cost reduction.
Some advancers already recognize the benefits of Blockchain applications in logistics and have begun to experiment and implement it to unprecedented advantage.
Blockchain technology can be used to build an efficient system that allows multiple companies to track their products even at micro-levels.
Who does it
Several retail food companies have teamed up with IBM to develop a blockchain-based system that enables food items to be tracked. This technology will allow the company to trace individual foods back to their farm of origin. Walmart has already conducted two successful experiments with blockchain: it tracked pigs in China and mangoes in Mexico to their place of origin. Ambrosus is another company that uses blockchain for inventory tracking.
What are the advantages?
What is fruit tracking useful for? Recall the E. coli outbreak in the United States ten years ago, when spinach infected with the microorganism spread the disease. If a similar incident were to occur in the future, it would be easy to identify the infected fruit batches. Not all stocks should be destroyed, only the infected ones. Time is crucial in managing incidents of this type and in limiting damage.
2.Improve transportation and shipping
Freight companies around the world, especially those that support international delivery, recognize the benefits of blockchain technology. This technology allows companies to track each item with a simpler logistics process.
Maersk, the world’s largest shipping container operator, has already tried the blockchain. Together with the Dutch Customs Service and the US Home Office, Maersk used this technology to track the movement of its cargoes across international borders. They have also now partnered with IBM to develop highly secure logistics systems that will change world trade forever.
Transportation companies are expected to save billions of dollars by replacing existing logistics processes. This system will help reduce errors, improve delivery times and allow fraud detection with a significant reduction in costs.
3.Invoicing and Payments
One of the great challenges of logistics is the development of safe and efficient systems for invoices and payments. Blockchain has already shown us its ability to transact effectively with the introduction of cryptocurrencies such as Bitcoin and Ethereum.
Tally sticks have developed a blockchain-based platform that performs invoices and payments for logistics and other business activities. Based on smart contracts, it automatically sanctions a payment that corresponds to an invoice. Visa has also jumped on the blockchain bandwagon and launched its B2B Connect payment service.
The goal is to simplify international payments while ensuring security and transparency. It also ensures that a fraud prevention system and minimizes errors are operating without the need for an intermediary.
4.Verification of authenticity
The use of blockchain in logistics is not only limited to companies, it also benefits the final consumer.
Everledger has leveraged the blockchain for the diamond industry by establishing the authenticity of the diamond’s origin. Answer the questions of consumers and also those who are part of the diamond business using the blockchain and cryptography to track diamonds.
With more than one million digitized diamonds, Ever ledger has been able to improve the detection of fraudulent claims while strengthening trust and credibility in the diamond industry. It also makes counterfeiting difficult and tackles the trafficking problem once and for all. Ever ledger is not content only with diamonds but is also adding value to other avenues that work with high-value products such as quality wines.
Another purpose for the implementation of the blockchain in logistics is the improvement of transparency in the supply chain. A big challenge that greatly affects supply chains is the credibility of information, and Provenance is a company that is tackling that problem using the blockchain.
Provenance has tested several case studies for blockchain-based supply chains. They collaborated with an international firm that imported coconuts from Indonesia and developed a system that ensured that the farmers who supplied the coconuts received fair payment. The system holds companies accountable for the information they provide and helps to present it correctly to consumers. This ensures that companies comply with fair trade practices. In another case study, Provenance tracked tuna caught in Indonesia. The project aimed to improve the communication of monitoring information between agents working at different levels of the supply chain. The project ensured that all data delivered could be verified and tracked from a decentralized system.
A great Advantage of blockchain systems in terms of transparency is that it improves B2B visibility and credibility and helps build trust between companies. It also reduces invoice-related disputes and lowers audit costs while avoiding worker exploitation.
6.Create a fairer transport market
The blockchain can be used to create a fairer market for companies looking to hire carriers. Transparency is key in logistics since the transport of goods to the other part of the world includes more than two dozen transport companies, which implies a huge number of transactions. The blockchain will facilitate the requirement of responsibilities to each party.
Ship Chain works to improve logistics through the blockchain. He is a member of BiTA ( Blockchain Alliance in Transportation), which UPS has recently joined, and which aims to develop blockchain platforms for the transportation industry. The system uses transparent blockchain contracts that will be easily integrated into existing systems. A decentralized market will be built where the parties negotiate a transport quote based on the information that indicates the available spaces, estimates the costs and the time it will take for delivery.
What advantages does it have
This would make transport affordable for both large and small companies. Since prices vary depending on supply and demand, companies, especially small ones, will do a fair deal.
One of the most important problems in transportation is the resolution of delayed or lost cargo disputes. Such disputes often arise, and companies typically hire independent auditors in these cases.
FedEx, another BiTA member, has launched a parallel initiative to use the blockchain for consumer dispute resolution. The company intends to use the ledger-based blockchain to store records securely.
FedEx will share information before collection and after delivery to both the sending and receiving parties to facilitate dispute resolution. This will eliminate the need for a third party for resolution and reduce fraud. Do you know of any other companies that are using blockchain technology in their businesses? Let us know in the comments.