Technology has completely transformed shipping and logistics over the last quarter century.
Automation at shipping hubs, advanced tracking tools, and IoT devices have optimized the capabilities of cargo carriers and 3PL providers to create systems that run faster and more cost-efficiently than ever before. From the supplier’s loading dock to a shelf in your local retailer, technology is redefining the processes that drive commerce.
However, even the most advanced technologies have their limitations. As supply chains continue to grow in size and involve more players in more places, transparency, cost, and security all become areas of concern.
That’s why so many logistics professionals are looking to blockchain for the next evolution of supply chain technology.
For the shipping, logistics, and fulfillment industries, the blockchain promises to deliver secure, transparent, scalable shipping records. Over time, the data collected may even help improve speed, agility, and innovation for all parties involved.
How Blockchain Technology Works
A blockchain is a public database of transactions. Originally developed for cryptocurrencies like Bitcoin, blockchain technology stores a tamper-proof record every time currency or product changes hands.
Blockchain records are not stored on centralized servers the way traditional records would be. Instead, they’re distributed across the devices of the people who access that particular blockchain. This decentralized registry makes it nearly impossible to destroy or edit any given record.
In addition, when a transaction takes place, blockchain technology automatically verifies the details of that transaction using other blocks on the chain as validators. In turn, false or fraudulent transactions become theoretically impossible.
What Can Blockchain Do for Logistics?
When logistics professionals adopt blockchain technology, they make it possible to maintain a permanent, unalterable registry of freight and equipment as they move through the supply chain. This can help improve tracking, prevent loss, and potentially even decrease costs.
With blockchain, one piece of cargo could never be double-scanned or overlooked. Any mistake involving the transfer of goods would immediately be flagged as conflicting with the rest of the chain.
Blockchain technology creates a permanent history of the supply chain that’s associated with the individual piece of cargo. All this information can be accessed from anywhere along the chain, though certain information can be kept anonymous. In the future, this could mean that manufacturers and consignees won’t need to wait for 3PL solutions providers and transportation companies to update them on the whereabouts of their goods.
The blockchain will allow companies to track cargo in transit at the speed of modern commerce. When combined with IoT technology and a powerful WMS, the blockchain can be used to track and document cargo instantly.
Potential Issues with Intermodal Blockchain
The biggest hurdle facing blockchain in the shipping and logistics industry isn’t technical so much as it is organizational.
Uniformity is key to successful interconnectivity. Getting stakeholders to use a common platform or solution has proven to be a big problem for BCOs and 3PL providers in the past. In order for the blockchain to become an effective tool in supply chain operations, it will need to be adopted universally.
In other words, in order to make the most of blockchain, key players in the industry will need to find a standard that smaller players everywhere along the chain can subscribe to as well.
With all the uncertainty, however, one thing is for sure — no other technology has as much potential to transform the logistics and freight landscape.
Looking for help navigating the waters of Port Logistics? Contact us today!