“Blockchain use cases for the logistics industry” – Content:
Blockchain Logistics Use Cases
In this article we will show the potential of blockchain technology. We will also show you which different use cases exist for the logistics and supply chain industry. Based on our analysis, four blockchain logistics use cases have been identified. These use cases are promising in the near future.
International container transport brings with it a long list of documents. Someone has to processes them. For example, the shipment of goods from africa to europe requires the approval of around 30 persons. This results in over 250 tasks and dozens of documents. These do not only lead to enormous costs, but also carry the risk of fraud. The costs for processing trade-related documents are estimated at 15 percent and the costs for physical transport at 50 percent.
So to avoid this process inefficiency, blockchain solutions can be used to connect the vast global network of carriers, ports and customs authorities. Different companies, which have to work together over a long supply chain, can share one database with blockchain. And with smart contracts, they are able to automatically process documents and contracts. This will result in processes being reduced by up to 90%.
The origin of high-quality goods is often based on paper certificates, which can be forged or lost. When someone buys a diamond, they don’t know if it is real or if it has been stolen. Now, how can we ensure that everything is right?
With Blockchain we can display each diamond as data points and identify them. We can then use these public records to determine that the seller is the actual owner.
Fake drugs are also a known problem in the medical field. With cancer drugs, for example, it is fatal if patients do not receive the right medicine. Blockchain could improve patient safety. We can create transparency in the supply chain from manufacturer to wholesaler, from pharmacies to individual patients. Barcodes or Auto-ID technology would allow patients to check if they have received the goods.
Blockchain can make it much more difficult in logistics and supply chain management to manipulate products or even sell illegal products.
It often happens that a company unknowingly delivers bad food. So in order to keep health damage as low as possible, this food must be recalled immediately. However, it is difficult for companies to find out where the bad food came from or where it was stored. Thus, companies can not identify bad food exactly. So, the company has to recall food within an estimated period of time, which not only takes a long time, but also leads to enormous costs. As a result, consumer confidence in food safety and in the company can be seriously damaged.
Blockchain can be used to complement the existing IT of supply chains. In combination with sensors and IoT tools, companies can create unchangeable data points on the blockchain. As a result, the systems can track food and other goods through a transparent, superior and independent ledger.
The Internet of Things (IoT) are devices or sensors with which data can be sent over the Internet. However, today’s internet architecture is not equipped for this amount of devices and data. In addition, individual servers represent a single point of failure and thus increase data security risks.
Blockchain is an effective solution to securely connect and manage a vast amount of IoT devices. And because Blockchain is based on a peer to peer network, there is no single point of failure. But to fulfill this use case, we need IoT devices and sensors that are not hackable. This is important so that only verified information is sent to the blockchain, and we therefore, can trust the data.
The logistics and supply chain industry are one of the most promising industries for blockchain. There are many actors who do not trust each other and we have a lot of documentation and paperwork. With Blockchain, companies can use a shared database without trusting each other. In addition, contracts and documents across different companies can finally be digitalized with smart contracts. This will lead to much more efficient prozesss, lower costs and better customer satisfaction.