This article is about Blockchain in Logistics Industry and its Models and Overview
For many centuries, businesses in some cases or entire industries have been built on the simple principle of trust between
multiple parties. However, this business of trust is about to be transformed and disrupted with the advantage of blockchain technology.
Blockchain can be defined as a distributed ledger technology that can record every transaction between parties in a secure and fixed way. By distributing the databases between two parties, blockchain eventually removes the need for intermediaries who were previously required to act as trusted third parties to verify, record and coordinate transactions.
Blockchain Logistics Models
- Blockchain can potentially improve efficiency in global trade by greatly reducing bureaucracy and paperwork. For instance, a multi-stakeholder process with a huge paper trail could be replaced with an automated process storing information in a tamper-evident digital format.
- Another instance is the automation that currently requires an intermediary such as legal, insurance, brokerage, and settlement services. Blockchain could be used to track a product’s lifecycle and ownership transfer from origin to store shelf, even as it changes hands between the manufacturer, Blockchain in Logistics Industry service provider, wholesaler, retailer, and consumer.
Enable New Business Models
- Micropayments, digital identities, certificates, tamper-proof documents and much more can be introduced and radically improved using blockchain based services.
- For instance, driver training organizations could replace easy-to-fake paper-based certificates with tamper-proof digital versions that can then lead to new identity-related services.
- Blockchain technology doesn’t introduce an entirely new procedure. Rather, it’ll develop on the old template of a ledger something that is used to log transactions over a period of time
- Blockchain technology includes mechanisms to ensure stored records are accurate, tamper-evident, and from a verifiable source. Thus, instead of multiple parties maintaining copies of their own dataset, now every stakeholder receives access to a shared dataset creating a single source of truth.
- This process gives confidence to everyone who working with this data that they’re using the most recent, accurate, and reliable dataset.
- Traditional ledgers typically provide a blanket layer of security which, once breached, allows access to all stored data.
In a blockchain based system, the security mechanisms make sure that individual transactions and messages are cryptographically signed.
- This ensures essential security and effective risk management to tackle today’s high risks of hacking, data manipulation, and data compromise.
Blockchain technology can be used to manage the ownership of digital assets and facilitate asset transfers. For example, it can be used to track the ownership of titles (e.g., land titles and diamond certificates) and rights (e.g., copyright and mineral rights). It is to used to manage the digital twin of a physical object in the real world
- Manual processes that are guided normally by legal contracts can be automated with a type of self-executing computer program called a smart contract.
- A smart contract is a key component of a blockchain based system that can automatically empower stakeholder to agree on rules and process steps. Once launched the smart contracts are fully autonomous when contract conditions are met, pre-specified and agreed actions occur automatically.
Unlocking Value in Logistics
- Achieving in logistics involves working collaboratively with others to optimize the flow of physical goods as well as the complex flow of information and financial transactions
- But today there is a significant amount of trapped value in Blockchain in Logistics Industry, largely stemming from the fragmented and competitive nature of the logistics industry.
- Many parts of the logistics value chain are also going to manual processes mandated by regular authorities. For instance, companies must oftentimes rely on manual data entry and paper-based documentation to adhere to customs processes.
Faster and Leaner Logistics in Global Trade
- Logistics is considered as the lifeblood of the modern world, with an estimated 90% of world trade carried out by the international shipping industry every year.
- But the logistics behind global trade is highly complex as it contains many parties often with conflicting interests and priorities as well as the use of different systems to track shipments.
Improving Transparency and Traceability in Supply Chains
- Many projects are underway by utilizing blockchain technology to improve supply chain transparency and monitor provenance.
- These initiatives a huge data about how goods are made, where they come from, and how they have managed this information that is stored in the blockchain-based system.
- The data then becomes permanent and easily shareable and giving supply chain players more comprehensive track-and-trace capabilities than ever before.
Blockchain technology is emerging from its first deployments in cryptocurrency and is now likely to have significant impact across almost all industries. Locus IT provides Blockchain Technology Services and We also Enterprise IT Support, Enterprise IT Training and much more. For more details please contact us.