Trusted Business Logic Automation for TSL industry
Transport, shipping and logistics (TSL) industry most pressing issues:
Transportation payment and dispute resolution – Average Days Sales Outstanding in trucking reaches 36.9 days. Payment automation resulting from smart contract 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.
Improvement of 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.
Experience we shared
Trusted Business Logic Automation using Smart Contracts and supply chain oraclization for TSL industry.
We understand Blockchain (distributed ledger) as a modern version of a centuries-old ledger. It enables multiple parties – who often don’t know or trust one another – to record information in a permanent, immutable, tamper-proof and transparent manner on a decentralized digital ledger and on a distributed system without the aid of a central authority. The integrity of the blockchain is secured by trustless consensus algorithms and guarded by cryptography making it impossible to illegally append or modify historical data.
A smart contract is a computer program running on the blockchain. When enhanced with trusted external data input (oracles), it can facilitate negotiations, verify terms of service fulfillment and enforce the execution of an arrangement between two or more parties.
Oracles (hardware) are verified and trusted data providers that help with bridging the gap between the blockchain and the events taking place outside of the distributed ledger context.
Some examples may include:
- Currency or exchange tickers provisioned by third party service
- Weather data
- Data provided by IoT and IIoT sensors
Sensor (HW) oracles are fundamental for the digitization of industrial processes.
A combination of blockchain, smart contracts and oracles in case of TSL industry leads to a great improvement of business processes resulting in cost reduction and time saving. Additionally, the trusted data collection and storage brings a wide variety of opportunities for value chain efficiency improvement as a big amount of data becomes available for analysis.
Trust and fraud detection
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 our solution companies can detect and combat fraud by tracking and validating every step of the supply chain process, benefiting both the buyer and manufacturer.
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 manufactured.
Enhanced data visibility and transparency
Telematics, IoT, RFID, NFC tags and similar technologies are already improving the TLS 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,
- permanent 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.