How Blockchain is Revolutionizing the World of Logistics?
From effective tracking of the fleet to cut down the costs and eliminate middlemen, blockchain has solved all the problems that have been bothered the transportation industry for decades.
According to a recent Forbes Insights survey “65% believe the logistics, supply chain and transportation sector is experiencing nothing short of a tectonic shift”. Though there are various drivers behind this transition, one of the most powerful is the advancement of behind-the-scenes technologies like Machine Learning, Artificial Intelligence and increasingly, Blockchain.
Blockchain is a hot topic these days as every industry are following its footsteps. It’s a shared digital ledger containing a list of connected blocks stored on a decentralized distributed network secured with cryptography. Each block of a chain contains encrypted data and hashed pointers to a previous block, so it is very difficult to alter any blog without modifying the entire chain.
Before discussing anything else let’s discuss the role of blockchain in transportation.
What’s the Role of Blockchain in Transportation?
The transportation industry is totally influenced by Blockchain technology as it allows companies/ people to trust each other who often don’t really know or trust one another naturally to engage in commerce.
Blockchain is ideally suited to the logistics industry, it’s shared behavior allows logistics companies to not only track products within their control but also across vendors participating in the transaction, thus providing a 360-degree view to business contributors.
The decentralized distributed network of this technology limits the required view to authorized contributors. Blockchain with smart contract capability is an attractive package for leading businesses. While Blockchain Technology Solutions has clearly been utilized by the supply chain community.
Blockchain has introduced greater trust across the transport ecosystem. With Blockchain Supply Chain Management, shareholders can have the details of everything that they need to know about their shipments and transactions.
Because of its distributed ledgers, it vanishes the chances of security leakage and fraudulence.
How Does a Blockchain Transaction Work?
Let’s discuss the Blockchain transaction work by taking the Bitcoin as an example.
Bitcoin is a digital currency which is exchanged and authenticated by a Blockchain. Companies are using Bitcoin because of its various inherent benefits.
Here are a few:
- No need to rely on third parties for authentication.
- Instead, it’s a massive, global peer network
- It also saves users from high merchant fees
- It’s fast
- It’s more secure than regular transactions.
There are approx. 1,400 different cryptocurrencies out there. In fact, they hold a market share of over half-a-trillion dollars worldwide. Out of these digital currencies, Bitcoin is the most popular, safer and more efficient, having the highest market capitalization.
Companies of almost every spectrum are using Blockchain technology to streamline their operations and provide better service to their clients. The trucking industry has been particularly active with blockchain implementation.
Benefits of Blockchain in Logistics Industry
Today companies are using Blockchain Technology to introduce greater visibility across the value chain. There are various technologies, like RFID or IoT/telematics, that can track location, condition and similar data. But today much of that data is isolated in silos which is a big drawback of the traditional system. With blockchain, logistic companies can create a platform where all participants can gain insights.
Here is the list of Blockchain Benefits:
Better Freight Tracking
Demand for same day and on-demand delivery has increased just like the expectations of consumers, therefore, transportation companies are dealing with an ever-increasing need to innovate.
Many logistics mobile app development companies have already invested in robust tracking technology, but escalating this technology to more challenging user demands is proving difficult—particularly when it comes to authentication.
According to the study done by TMW, transportation companies need to focus on the security of the data to improve their business operations. The current systems for recording data are subject to manipulation, which can create huge challenges for all the global supply chain.
Increase Efficiency by Using IoT and AI
Blockchain, with the help of IoT and AI, can be particularly useful for capacity monitoring. Often, transportation companies define the cost of shipping freight with the help of Cargo volume. By using IoT Internet of Things Applications in trucks and other shipping vehicles, transportation companies can find out the amount of space taken by the shipment and estimate cost accordingly.
With the use of blockchain enabled Best IoT Solutions, transportation firm SkyCell was able to create air freight containers for refrigerated biopharmaceuticals that monitor temperature, humidity, and location.
Effective Tracking of Fleet
Tracking is not only important for measuring delivery performance, but it is also important to measure the performance of individual vehicles within a fleet. When a purchase a second-hand vehicle for delivery, the Blockchain integrated apps can help to authenticate information on the past performance of the vehicle and its maintenance history.
Cut Costs And Eliminate Middlemen
Smart Contracts, one of the most important and powerful blessings of Blockchain, it reduces the need for middlemen which directly reduce the cost and time of the freight industry.
With the help of Smart contracts, transportation companies could completely reduce the need for all administrative steps, cutting costs and remove all possibilities for error.
The amount of money saved by using smart contracts effectively could be mind-boggling.