Barcelona, November 16, 2022.- This question has been answered by Entrepreneur magazine with the following arguments:
Logistics companies are adopting novel technological innovations in their last-mile logistics, as more than 56 per cent of customers today insist on having full visibility on their orders.
Supply chain experts are now brainstorming novel ways to incorporate the best of modern technology with logistics, and further optimize the thriving industry. Moreover, the complexities in the supply chain are increasing with more and more stakeholders coming into the scene, directly or indirectly. Technology such as artificial intelligence (AI) is already helping to improve speed and efficiency. Meanwhile, blockchain has been deemed as a viable solution for more transparency and visibility in logistics. In fact, blockchain can even complement AI in paving a new direction for logistics in certain use cases, such as the tea/coffee supply chain.
Lack of digitization and visibility in the supply chain is an age-old problem. Blockchain can emerge as a solution to this, as it appears to be a natural convergence of trust since it has commonalities like multiple parties. With increased transparency, blockchain can also help stakeholders detect fraud at any particular point in the supply chain process, reducing the chances of theft or misappropriation. Moreover, payments, transfers, updation of last-mile pickups and deliveries, etc., can be executed with the help of smart contracts.
Best use cases of blockchain in logistics
Around the world, blockchain technology has already started redefining the scope of the logistics industry. With its long list of real-world applications, blockchain has been adopted for different purposes by many leading e-commerce and logistics companies.
High value inventory tracking
FMCG corporate giants such as Walmart, Unilever, Nestle have partnered with IBM to develop an advanced tracking system for food items with the help of blockchain. The concept has already been piloted in China and Mexico where Walmart successfully tracked meat and mangoes to identify spoiled/infected batches of food. Blockchain also helps in tracing the origin of pharmaceuticals, transport of medicinal drugs, and the procurement of these raw materials. If implemented worldwide, blockchain based inventory tracking can help in better stock keeping of high value items.
Secure invoicing and payments
Blockchain-powered smart contracts can come in handy to simplify transactions and payments across businesses. For instance, fintech firm Tallysticks has devised a blockchain-based software that can handle invoicing and payments for other businesses.
Keeping customer demand in mind, Everledger has deployed blockchain in the diamond industry, for verifying the authenticity of the precious stones. They track each diamond to establish its origins and the information is provided to the end customers. In the long run, this policy can reduce counterfeits and prevent illegal trafficking.
Improved supply chain transparency
Sustainability marketing brand Provenance collaborated with a coconut importing company from Indonesia to prove how blockchain can improve transparency in the supply chain. Using blockchain, they developed a foolproof system which ensured that all coconut farmers get fair compensation. This added transparency ultimately helped the coconut brand grow as their customers got impressed by the fair trade practices. Many other B2B logistics companies are also trying to incorporate blockchain in their supply chain to achieve similar objectives.
Fair freight marketplace
Blockchain-powered freight platform ShipChain introduced a system which uses transparent blockchain contracts that can readily integrate with other systems in use. The goal is to unify tracking across multiple shippers and ultimately use the database to build a decentralized market, where companies can choose a shipping partner based on transparent data on their costs and past performance.
Delayed deliveries, misplaced orders or damaged shipments can cause a lot of customer disputes, eventually bringing down a company’s reliability. FedEx has undertaken blockchain to resolve customer disputes by sharing detailed information to both sender and receiver before pickup and after deliveries.