We have prepared information material about blockchain adoption in the transport, shipping, and logistics industry (TSL). Check out our paper to read a brief history of blockchain technology, examples of smart contracts applications in TSL, and an industry-specific implementation roadmap. Get it here.
Table Of Contents
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- Blockchain for different industries
- Trust and fraud detection using the blockchain
- Provenance tracking in logistics companies
- Enhanced data visibility and transparency across the global supply chain
- What problems can be solved with blockchain in the transport and logistics sector?
- Find the right partner to help you with the adoption of blockchain
Blockchain for different industries
More and more companies across a number of industries are already researching and implementing distributed ledger technology to solve their problems. Prominent examples include banking, real estate, insurance, healthcare, and government.
The shipping industry is another great candidate. By nature, it connects multiple participants with opposing interests. For example, contractual fines caused by late delivery of merchandise or damaged goods will be a benefit for one party and a disadvantage for the other.
Trust and fraud detection using the blockchain
With a single shipment oftentimes involving over 20 parties with roughly 200 interactions between them, there are numerous opportunities for dishonest behavior. These include:
- paperwork manipulation,
- shipment counterfeiting,
- fabricating data about cargo condition,
- goods theft,
- requesting fines under a false pretext.
With blockchain, companies can detect and combat fraud by tracking and validating every step of the supply chain process, benefiting both the buyer and manufacturer. Blockchain can help with creating systems as a single source of truth.
Provenance tracking in logistics companies
Trustworthy and detailed product lineage process can quickly help with:
- identifying parties impacted by recalls,
- locating faulty batches,
- providing proof that a product was sustainably grown or manufacture.
- Great examples include both Walmart and the Australian meat industry using blockchain to record and track information about beef or IBM helping with tracking of ethically sourced coffee.
Enhanced data visibility and transparency across the global supply chain
Telematics, IoT, RFID, NFC tags, and similar technologies are already improving the TSL industry, but the collected data is siloed across the organizations in the delivery chain. Utilizing blockchain technology provides:
- access to the same data by all parties,
- real-time information acquisition,
- permament data storage,
- tamper-proof information,
- tracking modifications to stored data.
By reducing the analog gaps, DLT can help with gaining an insight into where the shipment currently is, predict arrival times and help drive cost reduction.
What problems can be solved with blockchain in the transport and logistics sector?
Distributed Ledger Technology can solve many problems that affect the TSL (Transport, shipping, and logistics) industry. Here are just a few examples:
- Transportation payment and dispute resolution – Average Days Sales Outstanding in trucking reaches 36.9 days. Payment automation resulting from smart contracts reduces payment delays and disputes.
- Administrative costs – The cost of document processing and administration reaches 20% of the costs of transportation according to Maersk and IBM. Blockchain-based platforms help to reduce it significantly.
- Freight monitoring and quality control – Cold chain monitoring is a serious challenge for the pharmaceutical industry where 8.5% of global shipments are sensitive to temperature deviations. In some countries, this number reaches 20%.
- Transparency and trust – Cargo thefts alone are estimated to $30 billion annually worldwide. Blockchain implementation leads to a significant reduction of dishonest behavior and its identification along the supply chain.
The use of blockchain helps in business management and conducting self-executing transactions. It enables electronic data interchange and running digital operations in an efficient and safe way at the same time. Blockchain-based platforms and systems are the future of our world’s business processes, especially in the transportation and logistics industry.
Find the right partner to help you with the adoption of blockchain
With the right partner to guide you through the process, embracing blockchain can be a simple transformation with a smooth learning curve. Begin by identifying a use case for distributed ledger within your organization. Once you have it, start with a cloud-based solution with no need to invest in new hardware or expensive in-house research. Check our DLT experience and contact us for free workshops of discovery for customers interested in blockchain solutions. Our team will help you identify the right solution and will draft a roadmap to your technological goals.
