With blockchain, supply chain managers can benefit from greater visibility into their operation, increasingly accurate recordkeeping, and more effective communication.
From the Internet of Things (IoT) to artificial intelligence (AI), the shipping and logistics industry has always been receptive to technological innovation. Because e-commerce is becoming an increasingly dominant force in the global economy, supply chain managers, carriers, and shippers are understandably keen to leverage emerging technology to meet growing levels of digitally driven consumer demand.
One of these promising capabilities is blockchain, a decentralized, open-access database in which digital information can be distributed, but not copied or traced. Blockchain networks store information permanently across an expanded network of personal computers, protecting data with advanced cryptography that renders sensitive information essentially incorruptible.
While blockchain may seem like another in a long line of buzzwords, data backs up its growing stake in the digital economy. Indeed, a recent report by Research and Markets predicts that the blockchain market will grow from $411.5 million in 2017 to $7.68 billion by 2022.
Although it was originally designed for transferring digital currencies, blockchain is gaining ground in shipping and logistics. For professionals throughout the industry who are curious, here are the top four ways that this revolutionary technology is poised to disrupt business as usual.
1. Increased Visibility
With blockchain, every transaction is verified on a digital ledger — and across multiple copies of that ledger — which is then distributed over many computers in real time. This diffusion of encrypted information lends blockchain its trademark security. For shipping and logistics professionals, shipment progress entered onto blockchain-enabled platforms will be available for stakeholders throughout the supply chain, although no one will have the ability to permanently alter the information.
Thanks to this feature, shippers can trace shipments once they’ve departed a distribution center, follow their progress throughout a supply chain, and make key decisions knowing that their information is reliable and secure. Additionally, if it becomes necessary to review the history of previous orders, blockchain makes it easy to identify who handled shipments at every touchpoint from start to finish.
2. Streamlined Payment Processes
In part because it originated in the high-stakes digital currency sector, blockchain is strategically equipped to verify payments. For e-commerce sellers who regularly deal with unseen, anonymous buyers, this facet of blockchain is particularly helpful.
The technology’s secure ledger system can confirm the validity and security of account information, as well as the personal data used in payments. Some businesses are even beginning to issue payments to vendors and business partners with blockchain, thereby eliminating financial middlemen who have otherwise driven up costs.
3. Reduced Costs
By eliminating structural inefficiencies throughout the modern supply chain, blockchain has the potential to significantly cut down on expenses. Shippers who have relied out on outdated, unwieldy, and expensive tracking systems, for example, can save money by migrating essential functions to more sophisticated, blockchain-enabled platforms as they hit the market. Indeed, industry experts project that new systems with this kind of technology may save the shipping and logistics sector billions of dollars per year.
4. More Effective Logistics
Blockchain is poised to bolster the efficiency of contract coordination within the shipping and logistics space. The Ethereum blockchain, for example, is already proving this to be true with the use of “smart contracts” — that is, self-executing agreements that are considered legally fulfilled once blockchain-monitored conditions are satisfied. With shipping giants such as UPS investing heavily in these agreements in order to meet growing e-commerce demand, industry professionals can expect to see more of them in the future.
Preparing for the Future of Shipping
Although shippers may be interested in how they can incorporate emerging technologies such as blockchain, IoT, and AI into their supply chain, fully in-house integration can be cost-prohibitive for small- to mid-sized businesses. By working with an experienced third-party logistics (3PL) partner or integrated logistics services provider (ISP), however, it’s possible to take advantage of cutting-edge capabilities in the shipping and logistics space without having to make costly capital investments.
With over twenty years of award-winning work, Primary Freight is tactically positioned to leverage the latest in supply chain technology for businesses of any budget and size. Our experienced team has the resources and industry relationships e-commerce operations need to meet surging consumer demand in the short term, and to prepare for real growth in the long term. If you’re looking for a logistics provider that’s as invested in your success as you are, Primary Freight is here to help.
To learn more about how your company can benefit from partnering with Primary Freight, get in touch with us today at (800) 635-0013.