3 Areas Where Blockchain Can Advance Logistics
Bureaucracy is afraid of a blockchain in logistics.
The blockchain technology is 10 years now. It is unique, which is why organically conquers the world. Today there are many solutions based on decentralized principle, but Bitcoin remains the most perfect one. It is still impossible to attack or fake. But to start using such a protocol in traditional areas it requires more time and change of rules. At the moment, we are witnessing worldwide initiatives to implement this technology on closed protocols in various areas, including logistics.
It is also worth noting that Blockchain technology cannot be effective in the sphere where paper circulation prevails. Since manipulations may occur before entering the data, blockchain will simply record the result. To use this technology in the real sector correctly, one of the main requirements is high-quality digitalization to be done before.
Among the areas of application in logistics, there are three logical directions: transfer of registries to the blockchain, tracking of delivery or workflow, and marketplaces.
- Registries
Registries are the basis and in most countries they are the very core of all operations. The data in registries must be up to date and valid. An example of a state which is actively developing electronic services and registries is Estonia. Support for various components of the e-Estonia strategy is provided by X-Road, a decentralized database based on KSI (Keyless Signature Infrastructure). It is thanks to such a basis as a digital database that the building of any digital services and the optimization of processes occurs quickly and painlessly.
Yet it is not so in Ukraine. Our Association works on the digital strategy for our country and together with colleagues we are fostering initiatives focused on establishment of digital registries.
2. Tracking
Tracking is one of the main benefits of blockchain deployment — it allows synchronized control between the parties and optimizing processes in real time. Blockchain can increase the level of trust within the entire chain and simplify the decision-making process at each stage, by ensuring one-time access to information, all without bureaucracy. In logistics, this is a global trend among market participants to increase the transparency and reliability of supply chains. Such major ports as Rotterdam, Antwerp and Brisbane are already testing blockchain for managing and optimizing logistic processes.
One of the largest process optimization and signature projects in the supply chain is being tested by IBM and Maersk. With the help of the blockchain, all participants in the logistics process, including regulators, have the ability to absolutely reliably record permits, prohibitions, cargo transfer stages in a system where digital signatures cannot be falsified, and the entire supply chain and permissions can be traced. This digitizes a long bureaucratic procedure consisting of about 200 communications, minimizing delays in communication and significantly reducing the risk of falsification of delivery stage records.
3. Marketplaces
The blockchain-based marketplace is an open electronic marketplace for various services. Such markets make it possible to reconsider relationships in another way, since there is an opportunity to communicate directly to the consumer and performer without intermediaries. Such markets make it possible to simplify the environment of unnecessary schemes and to change approach in favor of speed, quality and freedom of choice. The free market is our future and those who are the first to switch to the new rules will reap the benefits and as pioneers will get more opportunities and reputation.
In conclusion, blockchain technology and digitalization can very easily and reliably change everything for the better. But this is just the technology, and if it is applied by the people whose goal is to cover up the old schemes with new interfaces, technology itself cannot help. To make the real impact, goals must be global and measures fundamental.
