Blockchain Technology in Logistics
Widely known as the technology underpinning the digital currency bitcoin, Blockchain is currently being hailed as the new technology to disrupt the supply chain.
In a recent survey by Xeneta, 72% of responded agreed that this technology will be applied to logistics to regulate and simplify administrative work. Yet, there also seems to be a lot of uncertainty regarding the technology.
Put in a simple way, blockchain technology is a very secure way to share information between parties. It creates a permanent, digital public ledger of transactions which can be shared among a distributed network of computers. Developed originally to monitor and secure bitcoin, blockchain maintains a continuously growing list of records or transactions, called blocks, which are secure from tampering, hacking or revision.
The sharing possibilities of this technology creates many opportunities for logistics/supply chain applications, say advocates. Advantages for the sector include improvements of transparency and data sharing across the supply chain, better tracking of orders, reducing errors and better fraud detection. One important aspect of this technology is that it can only reap its full benefits if all stakeholders/members of the supply chain make use of the technology and can access it.
Some experts did not expect the application of this technology before 2018; however there are already some examples of blockchain technology being used in logistics. Marine Transport International (MIT) is using the technology to record and store Verified Gross Mass (VGM) data. “Instead of a VGM message being delivered sequentially to parties within the supply chain, our platform can provide a decentralised approach to delivering VGM messages.” Said Jody Cleworth, MIT’s chief executive.
At the end of November Walmart also announced it is trialling blockchain technology to see whether it is well-suited to identifying the source of bad food in the supply chain. IBM is also investing in the technology and is currently working on developing blockchain products.
Blockchain technology presents huge cost saving advantages for the industry, Cleworth added. The airfreight sector might be ideally suited for it, due to high security and safety requirements. “It is unhackable and safe, it allows many intermediaries in the air cargo chain, from handlers to Customs, from shippers to carriers to communicate safely, cheaply and affectively” said Cleworth. It remains to be seen how fast and how widely blockchain technology will be used in the supply chain.