Along with the financial industry, one of the most significant areas of application for blockchain so far is the logistics industry. Many businesses have already begun to integrate blockchain solutions into their supply chains. One of the most notable use cases is the collaboration between IBM and the shipping company Maersk, which has been the world’s largest container shipping company since 1996. By digitizing the entire supply chain, they organize and track all data and documents. The goal is to reduce errors, speed up transports and processes, save money, and reduce fraud.
What exactly does a supply chain entail?
It is often a long journey before a product reaches the end consumer. Raw materials are delivered to manufacturers, who then process the raw materials into products that can then be processed further by other manufacturers. The finished product is then delivered to a wholesaler, who distributes it to various retailers. The products are then delivered to the end consumer via the retailer. Manufacturers, shippers, forwarders, storage facilities, and customs authorities are all part of the logistics sector, which is responsible for storage, transportation, and commissioning. The supply chain is a term used to describe the entire process.
As a solution, we create trust in data by using the blockchain
As one might expect, the supply chain from raw material to end consumer is a long and complex process involving a massive amount of data. As a result, numerous obstacles may arise, resulting in issues such as delays, costs, fraud, and product neglect. The most important foundation for this collaboration is mutual trust, as well as trust in the quality of the goods, proper transportation, and, of course, data accuracy. This trust is what gives rise to a supply chain that is recorded on a blockchain.
Assume that a supplier wishes to conceal the country from which his materials were sourced. Due to its structure, the blockchain is completely forgery-proof, making it impossible to store false information or alter the data. The supplier does not have the opportunity to misrepresent the origin of his materials in this case. The blockchain should also prevent falsifying temperature data for perishable food or smuggling goods during transport or delivery. Sensors in containers, in combination with IoT, can measure the temperature and even the weight and store this data directly in the blockchain.
Real-time access to all data and information
Furthermore, the blockchain allows all parties involved to track the status of the products or materials in real-time. This means that errors can be detected early and corrected quickly, saving a significant amount of money. Other data, such as permits, freight documents, and other documents required for onward shipping, can be stored on the blockchain in addition to the status. Delays caused by missing documents can be avoided at this point, saving time and money. The payment of specific services within the supply chain is another practical field of application in logistics. When the delivery arrives, payment transactions can be fully automated with the help of smart contracts. This saves a lot of time and replaces all paper-based transactions.