The world is changing and we are rapidly catching up with the changes brought about by technologies such as the Internet of Things, virtual reality, augmented reality, artificial intelligence, machine learning and robotics. Despite having all these innovations at its disposal, the logistics industry has been among the last to catch up with and adapt to them. In addition to these technologies, there is one that can change the overall dynamics of the logistics business: the blockchain. While many assume that usage of blockchain is limited to cryptocurrencies, the impact of blockchain on logistics and transportation is astonishing.
Blockchain may be described as a decentralised public ledger which chronicles changes in real time. Companies may utilise this technology to take faster routes and eliminate unnecessary stages in their supply chains. Distributed ledgers reduce errors and save time. In addition, blockchain provides smart contracts, enabling merchants and logistics organisations to create contracts that will automatically terminate if all of the specified conditions are not satisfied. These contracts improve transparency and profits while reducing monetary mistakes and delivery time.
Blockchain can help the freight and transportation industry by redesigning delivery processes. With its big-wheel approach of tracking items, it may significantly increase production levels and improve supply chain efficiency by enabling faster and more cost-effective delivery. It also improves product traceability and allows for easier communication between partners. Blockchain technology, because of its decentralised nature, streamlines procedures that previously required several middlemen.
Blockchain also assists businesses in tracking the trade of items. Once the items are traded and the smart contracts are concluded, it aids in the generation of algorithm signatures that are impossible to forge. Blockchain employs hash algorithms, which serve as individual fingerprints. Each hash fingerprint is unique to each supply chain and any alteration is monitored. In addition, blockchain technology records supply chain transactions with authors and timestamps, which are visible to everyone with access to the supply chain. This data is also shared with consumers to maintain transparency.
Blockchain preserves a thorough record of every transaction and communication between everyone participating in the supply chain, making it easy to retrace each step of the process. Fabricated information is easily detectable due to built-in security measures. Smart contracts are finished as soon as the buyer meets all of the essential conditions, and payment is delivered as soon as the smart contract is concluded, reducing the risk of fraud and enhancing the precision and timeliness of invoicing.
Blockchain is more than simply a data storage system. It provides complicated methods for analysing the data that is being submitted. It may help users develop projections and predictions based on past data, and it can assist users in identifying supply chain delays. These data analytics are proving essential to firms looking to reduce supply chain costs while growing their operations, and they can also help to increase consumer happiness. Retailers may utilise the blockchain database to see where things are in manufacturing and shipment to better plan their delivery timeframe. Finally, customers can also gain access to specific data on the blockchain.
When properly implemented, blockchain assists organisations involved in logistics and supply chain management in raising efficiency, lowering costs, and increasing income by developing new goods and services. In the future, blockchain is expected to trigger a paradigm shift in logistics. Through mutual trust among participants, it will increase the efficiency of the transaction verification process and may come to play an essential role in the provision of products and services.
Views expressed above are the author’s own.