Back to Basics: Blockchain in Logistics

Blockchain is one of the latest buzzwords to come about, especially in the last five or so years. But, what exactly is blockchain and how is it relevant to the logistics sector?

A brilliant report was released by shipping giant DHL summarizing the new role blockchain plays in revolutionising and improving logistics services. However, it is important to understand what blockchain is exactly but diving into how it goes hand in hand with logistics.

Put simply, blockchain can be described as “a distributed ledger technology that can record any transactions in a secure and permanent way.” But more than that, blockchain removes the need for intermediaries who were previously used to act as third party verification. By making that move from centralized to decentralized, blockchain effectively liberates data that was previously kept in safeguard silos. At the end of the day, blockchain is a way to share information quickly and effectively, with utmost security.

So what could it possibly to do improve shipping and logistics? Well, on a very basic level, blockchain helps to remove bureaucracy and all the paperwork. For example, before blockchain there would be a multi stakeholder process with a whole paper trail would could be quickly replaced with blockchain- automated storing information process, that is tamper free and very traceable. This means that blockchain’s data transparency is highly reliable and ensures that all information is accurate and not touched. It keeps it straightforward, without having to go through multiple parties to get the information from A to B. With high levels of transparency, comes high levels of security. The security mechanisms put in place make sure that each transaction is crytographically signed (which is utilizing algorithms, equivalent to a unique fingerprint generated with each transaction). Blockchain also helps with asset management, such as tracking ownership titles and help with asset transfer. With all these qualities in mind, and knowing that as is, information flow between in international trade is complex with heavy amounts of documentation and parties, we know that blockchain can make the process easy, simple and straightforward.

Blockchain can help to overcome the existing amounts of friction in the global trade and enable data transparency which would allow for access among the relevant supply chain parties. In addition to the efficiency gains, it would also help to cut costs, and reduce the amount of human error involved in the shipping line. It can help with the visibility and predictability which would in turn accelerate the flow of goods.

Many projects are underway to improve the supply chain technology and properly monitor provenance. By amassing data about how goods are made and where they are coming from, by storing it with blockchain, the information becomes permanent and easily shared and accessed with gives supply chain parties far more comprehension about tracking and tracing. Companies are then able to use this information to generate proofs of legitimacy of shipment and authenticity for luxury goods. This gives the consumer more information about what they are buying and whether it has been preserved in the right conditions, but most important of all, if it has been properly shipped.

Things are not all dandy in the world of blockchain, unfortunately. There are still some challenges it faces. However, the biggest challenge of all is industry adoption. The value of a community increases with growing numbers of stakeholders, but with differing levels of digital readiness companies are still taking some time to adopt blockchain.

So where does LogisticsX fit in? Well, as aforementioned, the last mile delivery sector needs a revamp, and with the implementation of blockchain into our service, we aim to provide a decentralized platform, that increases traceability, and transparency and ensures that you will never miss a parcel delivery ever again. We want consumers to know what is going on during the delivery process, which would mean cutting out all the stakeholders and the back and forth between different parties. Moreover, we aim to ensure that consumers are aware of where the package is at all times, to eliminate all the complications and general mishaps that happen with regular delivery.