How is Blockchain Technology Revolutionising the Logistics Sector?
Blockchain technology is being hailed, by many, as a digital panacea that has already made a huge impact across sectors such as finance. The broad number of ways in which blockchain can be utilised, however, is still being explored and the logistics sector is one area that is looking to exploit its power. Here we examine the fundamental principals behind blockchain and ask how is blockchain technology revolutionising the logistics sector?
The Principals of Blockchain Technology
Blockchain is basically a digital ledger that is shared by a network of individuals around the world and that came about from work carried out in mathematical discipline of cryptology. That is to say, the information stored in blockchain is encrypted.
Changing or adding information to the “chain” requires the authentication of everyone who is in the network and this means that blockchain is extremely secure – this is one of the reasons that the finance sector was an early adopter of the technology. More than half a trillion dollars of cryptocurrency, including Bitcoin, is now held worldwide using blockchain technology.
In addition to being extremely secure, blockchain is also fast and this is why sectors, such as logistics, are seeing its potential to streamline services and make them more efficient.
Performance and Tracking
One of the areas where blockchain can improve the services offered by the logistics sector is performance and tracking. The boom in ecommerce and services such as same day delivery, have had a knock-on effect and the logistics sector has grown in parallel with this boom. In order to meet these growing demands, however, companies need a technical solution to the requirement for secure and authenticated data – blockchain can provide the solution. Blockchain can help track items and delivers quickly and securely and therefore make the service more efficient.
Blockchain, used in combination with artificial intelligence (AI) and the internet of things (IoT) can also determine the amount of space shipments take up in any given vehicle and this means that the cost of shipping can be calculated more accurately. Herein, lies another way in which services can be made more efficient.
Vehicle Communication and Performance History
Where logistics companies, like National Pallets, are looking to buy or sell vehicles, blockchain can help authenticate the performance history of the vehicle and in doing so would negate the need for authentication from a middleman.
Blockchain and the IoT can also improve vehicle to vehicle communications, this leads to better fuel efficiency, better safety and streamlines operations.
The greater efficiency and more streamlined service that can be achieved using blockchain will increase customer satisfaction and profitability. According to Morgan Stanley, using blockchain represents a revenue opportunity of $500 billion for the logistics sector and also “has the potential to join autonomous trucks, drones, and the ‘uberization’ of freight as a key disruptive technology that can bring operating and cost efficiency to supply chains—while also being a threat to existing asset-light business models.”