Tuesday, May 28, 2024

    Blockchain Technology Is Changing the Logistics Industry

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    Blockchain is gaining momentum in a number of growing industries. Because of the rise in popularity of Bitcoin, Blockchain technology has proven useful in the financial arena. A growing number entrepreneurs are utilizing Blockchain to transform a number of industries.

    Blockchain is known for driving greater transparency and security across the digital information ecosystem. Armed with this knowledge many startup companies are beginning to implement use cases for the nascent technology.

    This has caused a heightened awareness around the technology in areas stretching from payments to public policy. As popularity grows, the need for more information and training will increase as well. Learning how these industries are using Blockchain to advance their companies is becoming more and more accessible with more events and conferences happening every day.

    Impacts on a global logistics

    The transfer of goods, service and value drive the way humans exist. This important reality of life is accomplished through communication flow and logistics. CEO of Shipchain, John Monarch, believes that the logistics sector employs more people than any other industry. Due to the natural growth over time, it has required innovative ways to scale in order to handle the growth of the shipping and logistics needs.

    Monarch said, “Connected devices revolving around the Internet of Everything (IoE) need a higher level of security. Blockchain technology is a matchless solution in this regard because it provides the best protection through distributed ledgers, advanced encryption, smart-contracts and reduced intermediaries. As a result, this will tackle corruption, ransomware, theft, premium-fees and tracking issues.”

    His estimates predict that more than $50 billion per year could be saved just in the beginning, and after maturity, as much as $500 billion annually when Blockchain networks are implemented on a mass-market level.

    Blockchain’s key role

    Efficiency isn’t the actual selling point of Blockchains for the logistics industry, according to Monarch. Plenty of other options outside of Blockchain can provide more efficient systems. What Blockchain does offer, however, is a way “to make systems more transparent, more robust and less dependent on intermediaries.”

    When there is a change of ownership, tracking this information becomes an issue as it relates to the chain of custody. One example of this is how a car’s history is tracked as noted by Christopher Bates, COO of Bitland:

    “It is pretty important to know if a car has been in a major accident and has frame/structural damage,” he says. “If there was an immutable accessible record that kept track of the car history, there would be no way a car salesman could sell a car that had been extremely damaged.”

    Bates also explained the problem as it relates to ownership of land. In some places, land titles are tracked on paper only or by one individual. Fraud happens in situations like these because the land can be sold two to three times without truly knowing who the real owner is.

    Providing safety

    There is a constant battle over the imperfections of shipping. Tracking the chain of custody when it is passing through so many hands begins to break down. There is no perfect way to find who is responsible for the break in the chain. Bates observes:

    “The issue therein is that since they are mutable, shipment records can be hidden or erased completely to the detriment of the people at large. Governments are able to hide their black budget spending by erasing shipping records or preventing records from being issued at all.” 

    Blockchain fixes this issue by implementing technology that decreases the potential of malicious action and creates better transparency with immutable record-keeping.

    Creating new opportunities

     As Blockchain technology continues to find traction among industry insiders and new markets, the potential for adoption continues to grow as well. Of particular note are new startups and existing businesses that are conducting Initial Coin Offerings (ICOs). This model of decentralization provides a way for Blockchain technology to enter various industries.

    Arcade City is a startup up company similar to Lyft and Uber. They are now facilitating all of their transactions through a Blockchain system. They are providing their drivers the freedom to establish their own rates with Blockchain tracking all of the data. This will appeal to drivers who would like to build up their own business instead of being controlled by a corporation. They can build their own customer base, determine rates and offer additional services (deliveries and roadside assistance).

    This is just one example of many new ICOs who are starting to take advantage of the Blockchain technology. The movement of putting freedom and control into the customer’s hands will be an upward trend that many will begin to use to their advantage. ICO provides industries with a platform to offer tokens to pay for services. It is a great way to establish the capital for a new company while providing services to your customer base.

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