The simplest introduction to the technology and how it can change the logistics industry
You may have heard about bitcoin which was introduced in 2009, but what about the technology behind it? There is a digital, decentralized ledger that supports most cryptocurrencies and it records all transactions without the need for a financial intermediary. Yes, that means no to banks.
Current financial systems are plagued with inefficiencies, fees, numerous checks and delays over borders. Blockchain is considered a natural evolution to remove these inefficiencies and bring almost instant settlement of transactions. 24 hours a day, seven days a week, the technology is running and not only is time saved, but transaction costs are greatly reduced with banks and middlemen becoming obsolete.
Beyond financial services, blockchain can be used to create more efficient supply chains.
The Blockchain in Transport Alliance:
One of the most exciting blockchain initiatives formed this year is the Blockchain in Transport Alliance (BiTA). Its creation allows for a forum to further develop blockchain standards and education for the freight industry, thereby improving efficiencies in the same. It spans not only companies in trucking, but also financers, suppliers, railroads, control tower and cloud computing developers, tire companies and many more.
Here are just some of the benefits a supply chain company would enjoy through blockchain technology:
- Greater security: Transactions are immutable. If someone goes in to change something in the system, the coding will be so different that it will be impossible not to notice. Therefore, identifying fraud will be much easier and even immediate. This can also potentially eliminate the need for audits required by internal processes.
- Transparency for the customer: This will be a real game changer. Today, a lot remains behind the scenes. Customers do not see the vast network of suppliers, retailers, distributors, storage facilities and transport. With blockchain, a customer can see every part of the journey, will have better information and will be able to make better informed decisions in future.
- Improving supply chain tasks: Expect improvement when it comes to tracking purchase orders, assigning or verifying certifications and linking physical goods to serial numbers. Also expect higher efficiency in recording quantities of pallets, containers and the like, and their transfer and movement.
- Vehicle enhancement: Stay better informed about the repair history of a vehicle. Using blockchain to keep such records means it will never be written on a piece of paper again. And you won’t lose that piece of paper. Also, electronic logging devices in vehicles can send real time weather and traffic data to the blockchain network in case of rerouting.
- More checks and balances: Keep quality standards and integrity in your organization high as all parties can access records and even review photos of loading or drop offs. Keep up to date on available capacity of goods throughout the day. This means no more disputes and different stories between employees and easier conflict resolution with customers.
- Pricing: Through the blockchain network, companies will be able to leverage data to generate more accurate pricing.
These are only some of the benefits and BiTA is growing fast with many well established companies such as UPS, FedEx, SAP, Werner Enterprises and Salesforce.com having already joined. Some companies want to go paperless, some want to improve security and trust between it and its customers, and some want to develop their Internet of Things (IoT) capabilities in the supply chain. Imagine as a supply chain company, being able to track and monitor your good all around the world.
There is growing interest and momentum overall. Looking at the phenomenal swells bitcoin has experienced in the markets, blockchain is appearing less of a speculative bubble that will end badly for investors. Bitcoin itself has now grown to a market value ahead of Visa Inc. Blockchain technology is now mainstream and is considered “disruptive” for global financial services in the same way Amazon was for retail. It has been called the most important invention since the Internet itself. What the Internet has done for information, blockchain will do for transactions.