Smart contracts for smart deliveries

A delivery smart contract is a contract in the Blockchain created by a user who wants to transfer a parcel from one place to another, and signed by a courier or a transporter who proposes to execute the transfer according to contractual terms defined in the smart contract.

The sender does not need to make a prepayment and the receiver can easily buy a specific local product from a remote region. Delivery smart contracts could potentially reduce frontiers in particular with rural regions or with regions where existing delivery services are expensive or without any guarantee of a delivery date.

Though at the present time users and couriers have no legal obligation because of the smart contract, these can foresee contractual terms in a flexible, trustless and automatic way. For instance, the delivery contractual terms can foresee to reduce the return of a deposit paid by a courier when taking a parcel by 10% per day after a predefined date. The smart contract applies contractual terms during the handover or the predefined end date of the smart contract with no need to go to court or make a complaint to an insurance company.

Of course, the fee paid by the user depends on the deposit amount, which is linked to the risk the courier or transporter agrees to take. In this way, it will be more profitable for couriers to operate urgently or to transfer expensive parcels, but they will have more risk to lose their deposit. The system foresees that the courier and not the user should take an insurance in case of late train or plane for instance. This is a main difference with centralized postal services, which cannot give guarantee to users and are not incentivized to deliver on time.

Not only the delivery date can influence the deposit given back to the courier or transporter. The parcels can be tracked during travels using GPS location and sensors. These data are sent frequently to an engine, which sends to the Blockchain for instance the time a physical characteristic was over a threshold predefined in the smart contract. Tracking and monitoring objects during a travel improves the quality of the provided delivery service and is a way to avoid or solve many disputes. It gives also potential applications for the renting of objects with an automatic payment of rental fee or for the real-time tracking of fresh and frozen products. If the sensor emits a temperature higher than the threshold, the insurance is automatically payed out.

The easiest and cheapest way to track a parcel is to use the mobile phone of a courier or transporter, who travels all the time with the parcel. However, with the development of the Internet of Things, we can imagine that in a short future it will be possible to track objects located in containers, for a low cost and everywhere in the world.

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