The biggest players in the game have started to realize that the technology’s ability to record transactions between parties in a permanent and secure way could have multiple uses in logistics.With an estimated 90% of world trade carried out by the international shipping industry every year, achieving new efficiencies in trade logistics could have huge implications on the global economy. According to the World Economic Forum, reducing supply chain barriers could increase global gross domestic product (GDP) by nearly 5% and global trade by 15%.
Blockchain Technologies could be the answer to many of the frictions in global trade logistics, including procurement, transportation management, track and trace, customs collaboration, and trade finance. With the help of blockchain, the companies can optimize the cost as well as the time needed for trade documentation and administrative processing.In collaboration with IBM, the world’s largest container shipping company Maersk has started a venture to streamline ocean freight with a blockchain system which tracks international cargo in real-time.
The blockchain-based system will help to digitize workflows and allows each stakeholder in the supply chain to follow the progress of goods during the transit process. Blockchain technology is perfect to ensure secure data exchange and a tamper-proof repository for customs documents, bills of lading and other data, and make them available to the stakeholders.
All in all, this partnership will hopefully reduce fraud and delays, which could lead to billions of dollars in savings.Israeli container shipping company ZIM has conducted a pilot to digitize the bill of lading: an essential shipping document which holds critical information like destination, product description, quantity, billing information and handling.
According to industry estimates, more than 10% of freight invoices contain inaccurate data: this is the type of inefficiency ZIM aims to amend. During the trial period, while ZIM and other pilot participants issued, transferred, and received bills of lading through a blockchain system, the blockchain application developed by Wave Ltd was often praised as the “holy grail” application in logistics.
Industry adoption of a digital bill of lading could mean reducing costs in supply chains, enabling error-free documentation and making a transfer of original documents faster.Another blockchain-based partnership to keep your eye on is that of Port of Rotterdam and CargoLedger to implement a blockchain solution for tracking shiploads.
The Blockchain solution will record and process data from labeled loads so that the receivers in Rotterdam’s port can gain immediate insight into the conditions of the load.
All in all, the blockchain will be applied in order to improve quality control in supply chains and establish a transparent and secure system to innovate the management and handling of cargo.Blockchain technology has also a huge potential to improve supply chain transparency and monitor provenance. In the consumer goods and retail industry, many of the biggest players have undertaken initiatives to amass data about how goods are made, where they come from, and how they are managed. If this information is stored in a blockchain-based system, the data becomes permanent and easy to share, improving that way the comprehensive track-and-trace capabilities.
There are many companies that can benefit from a blockchain-based system. The information available can be used, for example, to provide proof of legitimacy for products in pharmaceutical shipments, and proof of authenticity for luxury goods.
These blockchain initiatives also come with clear benefits for the consumer, as people can have more information about the products they are buying, for example, whether a product has been ethically sourced, is an original item, and has been preserved in the correct conditions.In cooperation with IBM, retail chain Walmart is working on blockchain pilots with the goal of enhancing their supply chain transparency and tracking their goods more efficiently.
The lack of transparency in Walmart’s multi-actor food supply chain makes it difficult to track and identify the provenance of their products. This issue might seem trivial at some levels, but becomes rather vital, when the food is contaminated and causes illness in customers.
Last autumn, when dozens of people in the U.S got sick from eating contaminated romaine lettuce, the grocer cleared its shelves. With a blockchain-based system, they would have been able to pinpoint right away which batches of lettuce were contaminated and from where they came from.
In Walmart’s case, blockchain system is used currently to record temperature in the transportation unit during the transit. In this way, the company can control and assure quality and food condition more efficiently.The Chinese giant Alibaba has always been among the pioneers to adopt blockchain solutions. For example, it has turned to blockchain to fight food fraud, secure medical data and track cross-border shipments.
Through its subsidiary Lynx International, Alibaba integrated blockchain technology to track information in its cross-border logistics operations. Their system has now an immutable record of shipment information such as details about the production, transportation, customs, inspection and any third party verification.
For a shipping and logistics company like Lynx, security and transparency cannot be overemphasized. Blockchain proved to be, therefore, the ideal solution for them.