The logistics world can barely wait for the supply-chain revolution
What the imminent standardization means and why it matters
Most people reading this have at some point in their life imagined what it would be like to live in a world with flying cars. It’s easy to close your eyes and visually envision what it would be like to finally reap the fruits of technological innovation. But very few will consider the more boring side of things; the groundwork infrastructure needed to implement such innovations. Who in their right mind fantasized about what the future of traffic control would be like? What would intersections look like? Would we have speed limits or altitude restrictions? Who would control traffic in the case of manual overrides?
Similarly, the somewhat antiquated supply chain industry is bursting at the seams with imminent revolutionary upgrades which rely on one simple industry holy-grail: 𝚂-𝚃-𝙰-𝙽-𝙳-𝙰-𝚁-𝙳-𝙸-𝚉-𝙰-𝚃-𝙸-𝙾-𝙽.
Here are some anticipated improvements to supply chains that will become reality as soon as the market moves to a standard network like Olam wherein an information flow between any two parties is available:
Instant payments
What it means: Once agreed-upon terms are met, such as an intact shipment arriving at a port for example, payments to the sender will be instantly triggered for release using smart contracts on the blockchain.
Why it matters:
Currently, the only way to “ensure” terms have been met is by a method called a Proof of Delivery (or POD), which a receiver basically confirms they received what they were promised. This is an error-prone, painstaking process which involves physically confirming conditions have been met with a pen and paper forms, and complications often arise when a recipient disputes having received a corrected product specification or a proper notification about delayed shipment.
Proper logistics in developing countries
What it means:
A global logistics standard means small logistics companies will be free to bid for open contracts and fulfill parts of a supply chain. Any company with even 2–3 trucks can see an open contract and compete over a chance to fulfill it, without needing to be a massive company with a fleet of vehicles. This will DRASTICALLY reduce prices for everybody involved.
Why it matters:
Right now, supply chains in developing countries range between terrible to non-existent due to a severe lack in participating supply chain parties. If you have access to ships but can’t find a trucking company to pick the container up, you are likely to abandon the operations there as a whole, which is why it’s so darn hard and/or expensive to shop online in developing countries.
Reduction of supply-chain propagation
What it means:
Let’s say a truck delivering goods is stuck on its way to a port due to unexpected heavy traffic. Standardization will allow every single other party in the chain to be notified instantly and plan ahead.
Why it matters:
Today, a ship leaving its dock without a shipment may result in enormous fees paid to keep the container stored in whichever conditions it requires… and then there’s of course the business implications of such a delay which could take months to correct; what should the business do without the parts they have ordered? Would having ample time to prepare help them withstand such delays?
Being informed of delays or problems in a supply chain allows its members to plan alternative routes and other solutions. Maybe parts from elsewhere can be sourced in the meantime? Maybe the climate-control system for the pharmaceuticals on board needs its batteries recharged to make up for lost time?
The amount of time, money, perishables and goods that will be saved by this change can’t be overstated.
Cheaper insurance for all
What it means:
This one is quite straightforward; Insurance on segments on the supply chain can get super expensive when you combine 2 present day realities: High risk for the supply chain, and lack of transparency. The immanent reduction of risks such as stolen and lost goods, and the sharp rise in data to be available for insurance providers, will lead to much much lower costs as insurance companies will now be able to better calculate risk and give much lower bids to their potential clients.
Why it matters:
Do we really need to explain what is so great about paying much, much less for insurance?
Smooth operation
What it means: Do you remember what it was like to set up a date or meeting with someone before cellphones were a thing? If you do, you remember that if the 2nd party didn’t show up on time, you had to wait and hope they show up, if ever. Similarly, if you lost your group during a tour, you had to go to an agreed-upon location and wait without knowing what is happening.
Right now, supply chains arn’t so different: A truck driver can sit and wait for hours at a port without knowing exactly when he or she will be needed. It gets even messier when dealing with air freight and more so with maritime freight delays.
Why it matters:
Because they remove uncertainties, cellphones and the gift of communication they gave us helps make life much easier. In this vein, an internet of logistics would allow all parties in a supply chain to have the same updates: Where is the product right now? When will it arrive, and in what condition? Should we sit and wait for it, or utilize time elsewhere until it arrives? All these questions will have clear answer very soon and for any and all logistics parties.
Automatic freight invoice management
What it means:
Soon, the history of any shipment’s journey will be made available to all parties in a chain. This means that any shipper who receives a bill from a freight forwarder will be able to ensure he is paying for what they got and that they got what they paid for. Much more trusting.
Why it matters:
Presently, if a company seeks to ship its merchandise to another country for example, they will hire a freight forwarder (think: Kuehne + Nagel) to contract several various logistics companies on the shipper’s behalf which may include a trucking company, a shipping company, a cargo handler, and others. At the end of the completed shipment, the shipper will receive a bill which includes, aside from those services, charges for other things like storage.
Let’s imagine that the bill includes 5 days of storage, plus tax, for the containers. Can the shipper be sure that the containers indeed required such expensive storage? If they can’t be sure, how can they continue to improve their supply chain? To answer these mysteries, the shipper will task its agents to check and confirm every step described in the overall bill.
With Olam’s protocol, there will be no need for shippers to rely on — or be skeptical of — their freight forwarders. Everything will be so transparent that their can be no surprises.
Only peace of mind.
If you wish to learn more about the Olam Foundation, its vision, and it’s token generation event, join us on Telegram or reddit! The project’s whitepaper and proof of concept (in real-time) can be accessed via the website http://olam-platform.org.
