At its most basic, blockchain is a distributed technology that leaves a permanent, transparent record of data transactions. While transactions can be viewed, they cannot be changed, edited or obfuscated. While blockchain technology is at the heart of cryptocurrency systems, it’s a mistake to think that’s all it can do. Although the obvious use for such technology is banking or currency transactions, it is making its way into shipping, logistics and data management with remarkable success.
Recognizing Blockchain in Shipping
A recent announcement from UPS shows that blockchain is already radically reshaping the way the world does business. They’re shipping more packages than ever, and with the collapse of well-known brick and mortar brands accelerating, this will not slow down anytime soon. However, shipping and logistics have never been more vulnerable. Obsolete tracking systems cannot keep up with processing packages, tracking them or guaranteeing their security. Technology uses vary greatly from country to country, and unreliable paper accounting is still used in more places than you would think. Put bluntly, international shipping is nowhere near as safe as it needs to be.
One of the strengths of blockchain is that it can generate a digital identity for every package, keeping them controlled at every step along the way to its destination. The result of this type of database innovation is great transparency, improved security within the shipping process, and a higher delivery success rate.
How it Will Strengthen the Industry
Blockchain does not make logistics more efficient. There are loads of other software systems that do this better if that is your only goal. Where blockchain stands out is in the way it uses encryption, distributed documentation, and smart contracts, while relying on few intermediaries to provide security. As all data moves to the Internet and Cloud, it becomes available to thieves, foreign entities and criminal syndicates with advanced hacking and decryption tools. Blockchain is as secure as you can get. In addition, its unique form of tracking will help with internal issues such as shrinkage, fraud, corruption, and the hijacking of identified products.
Yet package delivery is just a small part of overall logistics systems, and this is where blockchain database innovation could have its greatest effect. By generating unique factors for every element with the logistics system, it will:
- Eliminate fraud and errors
- Improve inventory management
- Reduce costs for shippers and couriers
- Quickly identify bottlenecks and other problems in the supply chain
- Reduce paper work and the delays it can cause
- Increase customer and partner trust
What the Future Holds
We can see a future where vendors, carriers, consumers and others in the supply chain process all benefit greatly from Blockchain. But shipping and logistics are just the tip of the iceberg. Blockchain technology is already moving outside the confusing world of cryptocurrency in other ways. It is bringing transparency and security to banking systems, insurance and regulatory systems, stock and bond brokerage, checking and payment systems, government and health care and medical management. Simply put, any system that could benefit from the application of digital identity to stock, records or traceable elements within the system may transition to blockchain.
This future is closer than you think.