Smart Contract Use Cases in Transport/Logistics
As a software development company that works primarily with blockchain with our enterprise clients, we have a deep understanding of how powerful the technology can be for business. We’ve previously written about how it’s being used in a variety of industries, but what interests us most is within the transport and logistics realm, where smart contracts are propelling the industry forward.
We are currently doing this work with a multinational financial services institution based out of Europe, opening our team up to all the possibilities of this technology within the logistics field, which we’d like to share with you.
Smart contracts simplify and secure many of the processes in the logistics industry, including agreement terms, fraud protection, record keeping, payments, cash flow, and more. They also save money, since they eliminate the need for any third-party processors.
Here are a few interesting ways that smart contracts are being used in the transportation and logistics industry to improve business operations:
Documenting Shipment Data
ShipChain is a blockchain-based platform designed specifically for transport and logistics companies. Through the use of smart contracts, it’s able to track shipments from the beginning to the end of their journey — as it leaves the factory and makes its way to the customer. All of the information about its travels are recorded in the blockchain, which triggers smart contracts once the terms are fulfilled.
Digitizing Letters of Credit
A letter of credit (L/C) is essentially a bank’s guarantee that a buyer will pay a seller, in the correct amount and in a timely manner. This is an important aspect of international trade, but the way it has traditionally been processed can take several days up to more than a week. With smart contracts, this can easily be streamlined to happen more quickly and to facilitate the payment faster as well. Leading the charge on this front is BofA Securities and HSBC banks in partnership with the Infocomm Development Authority of Singapore. Their smart contracts enable automated trade deals between importers and exporters.
Upholding Sustainable Fishing Practices
Treum is a blockchain-based supply chain company that is using the technology to help revolutionize the tuna industry, in a partnership with the World Wildlife Fund. To illustrate how it works, an RFID tag is attached to a tuna fish as soon as its caught, sending its geolocation to the Ethereum blockchain. This confirms that the fish was caught legally and sustainably, and is a great example of how the tech can be used for product traceability. The fish can be traced all the way to the supermarket, where customers can scan a QR code with their smartphone to verify where the fish was caught, when, and by whom.
Pharmaceutical Tracking
By law, pharmaceutical companies are required to implement unit-level tracking and traceability for medications by 2023. GlaxoSmithKline is ahead of the curve, adhering to the new regulations by using a blockchain-based supply system. This ensures quality control (especially among third-party manufacturers) and that vendors have adequate product, among other benefits. The pharma company is partnering with Ethereum-based supply chain platform Viant to carry out its responsibilities ahead of the law going into effect.
Blockchain in Transport Alliance (BiTA)
Though BiTA isn’t an enterprise, it’s a valuable resource for any company in transportation and logistics. The organization provides education and an open forum for industry folks interested in pursuing blockchain, helping to drive the adoption of blockchain and smart contract technology forward across the freight marketplace. There are currently over 500 members in 25 countries.
