“Blockchain” may well be one of the most intriguing but also the most confusing technologies ever to have entered the logistics industry. First introduced by Satoshi Nakamoto in 2009, the “Blockchain” is an anonymous decentralized database (or ledger) that allows the direct and secure transfer of information, documents and currency between parties in the same network, without the need for intervention by traditional intermediaries.
The first success stories of Blockchain are already shaking up the financial services industry, with the cryptocurrency “Bitcoin” being one of the most famous and notorious examples. However, during the last year, an increasing number of Transport and Logistics companies have also started to become aware of the many disruptive benefits that Blockchain technology can offer (source: Deloitte):
1) Disintermediation and trustless exchange, eliminating the need for a trusted third party to guarantee the security of a transaction, eliminating all counterparty risk;
2) User empowerment, with end users always in full control over their sensitive information and transactions;
3) High quality data, with Blockchain data being always complete, available, consistent, timely and accurate;
4) Durability, Reliability and Longevity, without central control points or data vulnerability;
5) Process integrity, with transactions being executed exactly as the protocol demands even without oversight from a trusted third party;
6) Transparency and Immutability, with transactions protected from alteration or deletion, and changes to public Blockchains always publicly viewable;
7) Simplicity, with all transactions being added to a single public ledger, reducing the clutter and complications of multiple ledgers;
8) Speed, with Blockchain business transactions being processed in minutes rather the traditional days or weeks;
9) Lower transaction costs, by eliminating third parties, data errors, waiting times and overhead costs.
Applying above benefits to the Transport and Logistics sector is expected to offer a quantum leap in economic efficiency and billions worth of savings, but not without massively shaking up the global ecosystem of shippers, logistics service providers, freight forwarders, commodity traders, customs authorities, seaports, airports and logistics hubs. Also, Blockchain still has many regulatory, technological and cultural challenges to overcome.