What if you could go away with paperwork by digitizing the information and going into the cloud where all involved parties could access it any time? That’s the promise of the blockchain, a technology we will invest in. Supply chain and logistics transaction documentation are about to be “one of the potentially most compelling use cases for blockchain technology.”
Currently, a plethora of startups, as well as major companies like IBM and Walmart, are betting that the technology will change the way goods travel around the world. Blockchain technology can digitize the stacks of paperwork that accompany supply chain transactions and push it all to the cloud, where key information is visible to stakeholders within the supply chain.
Smart Contracts and Proving Provenance
The blockchain is a distributed ledger that digitally records transaction history between parties. Information gets stored in blocks of data that are “chained” together. Each data block added to a chain is digitally unique and encrypted with a date/time stamp and key, which makes it unalterable. Information in a blockchain can’t be hacked or counterfeited and is immediately “trusted,” and therefore, accepted by anyone with access to the related blockchain.
This essential trust element is what makes blockchain technology ideal for executing what is known as “smart contracts.” For example, notes Wired, “When that shipment of avocados reaches the port in Amsterdam, it could automatically trigger a payment to the shipper back in India. Smart contracts could also be used to handle the required paperwork since they’re more secure than an emailed PDF and cannot be easily manipulated.” Smart contracts can be enormous time and money savers.
Blockchain tech can also detect fraud and help shippers guarantee the provenance, or authenticity of products. Provenance ensures that every shipped good includes a digital “passport” that proves its authenticity. These so-called passports include essential data such as where and when the product was manufactured and what steps it took throughout its journey.
Future Blockchain Standards Are Essential
Blockchain technology has the potential to drive efficiency, visibility and cost savings into supply chain and logistics management, but full-scale adoption is only possible if we have standards.
Today, BiTA (Blockchain in Transport Alliance) is the vanguard leading blockchain standards creation in the transportation and logistics industry. BiTA is actively working with its members investigating use cases and developing a common framework for which the logistics industry can build revolutionary blockchain applications.
Take a look at Wired article for more insights into how blockchain technology will help transform logistics, or enjoy this introduction to this previous article “Blockchain Technology in Logistics: Introduction“.
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