The use of blockchain technology and its implications for business processes is being widely discussed at present. When you consider the significant benefits, the technology represents to every industry, it is no surprise that it is such a hot topic. But despite this, for the uninitiated Blockchain remains something of poorly understood entity. Alex Mortimer, Product Consultant at Fargo Systems discusses the phenomenon that is Blockchain and the benefits the technology offers the logistics sector.
Blockchain technology has struggled to separate itself from the headline-grabbing rollercoaster that Bitcoin has been riding since its inception in 2009. The dizzying highs, terrifying lows, alleged criminal connections and website hackings have somewhat overshadowed the revolution that this technology is creating. So much so that for many people, Blockchain is still a word that is only heard on the news or read about in a lengthy tech article online, but they don’t actually fully understand the benefits. This limited understanding of the technology and its application can be attributed to two main hurdles; the fact that so far there are only a few real-world working examples of its application and its misperceived, close association with Bitcoin.
Despite these challenges, it has been hard to miss the waves the technology has created so far. Even though there is limited understanding of the technology itself, most people have at least heard of it. But what is it and how will it impact the logistics industry?
A single block is a record, a piece (or pieces) of information such as names, locations, container numbers or all three depending on what information is required. When this block is created, it is stored in multiple locations across the internet for everyone to view. This provides a network, where everyone can validate the information that this stored and ensure that everyone involved is on the same page. If this data needs adding to, instead of updating the block, a brand-new one is created and linked to the old one. This will continue for as long as needed; creating a chain of blocks. This underpinning idea is definitely clever, but the questions on many peoples’ minds at the moment are; how clever is it, and what benefits does it hold for my industry? The fact that the idea and technologies are freely available for anyone to work on has led to a number of small start-ups and global giants alike attempting to grasp this ‘lightning in a bottle’ and turn it into a storm that reshapes their industries for the future.
When it comes to new technologies, it can be argued that the transport industry is not usually a forerunner. Cutting edge is not a phrase often used to describe our sector, because pushing boundaries can normally wait when there is a delivery that needs to be made! However, the utilisation of Blockchain technology represents significant benefits for enhancing transparency, security and improving processes across the supply chain, areas that the industry is consistently striving to improve.
That’s not to say that the industry shies away from adopting new technologies. The advent of GPS and the recent growth in electronic proof of deliveries are evidence of how much the industry can move forward given time. The implementation of new technology to streamline processes and improve efficiency and visibility throughout the supply chain is where the real transformation is going to take place in the logistics sector in the coming years.
The sheer number of technological advances being targeted directly at hauliers, shipping lines and warehouses is going to prove very hard to ignore. The effectiveness of web portals such as TOPS.WEB, mobile traffic sheets such as those featured in TOPS, and even the introduction of autonomous vehicles are going to create a ‘keep up or get left behind’ momentum to the industry in a very short time frame. Blockchain could be the kindling to ignite the fire of the sector’s technological transformation.
The use of Blockchains could take many forms in the industry. One simple example would be their use in the container life cycle. When a container is registered, all the relevant information could be stored in a newly created block. Then during the life of this container, a new block would be created by every company that deals with that container and a chain would be created offering complete visibility to all parties involved.
This is essentially what is being done now but in a longer, less efficient way. Every company in the industry will have some form of software that helps them to keep track of their specific roles. But essentially, this is just multiple companies writing down the same information in a number of different systems, all disconnected from each other. The exciting potential of Blockchain technology is condensing this down. Blockchain allows all the information to be stored together, be viewable and accessible by all, as well as be kept up-to-date by multiple parties in real-time. This crosses the boundaries between officials adding customs clearance data, customers adding their delivery requirements, hauliers adding in POD information and depots adding their restitution data. All of this is accessible by the owner of the container anywhere, at any time.
Blockchain doesn’t stop there. If a supermarket wants to know the exact date their chilled produce was picked, the location it was packaged at and the date it was shipped it can all be accessed quickly using Blockchain. Testing undertaken by supermarket chain Walmart in the United States showed that the amount of time it takes to trace a package of mangoes from farm to store was reduced significantly. The original process took days or weeks, but with the use of Blockchain technology it only took two seconds to trace (Duffin, A. (2018) How Blockchain Technology is Shaking up the Logistics Industry. www.cryptoslate.com).
At Fargo Systems, we feel the opportunities for the use of Blockchain are vast for the transport sector. For example, customs clearance could use information stored to greatly reduce their work load. Vehicles could have their servicing and MOT history stored for VOSA to access as they need to relax the need for auditing. Transport is only one sector that will benefit from the use of Blockchain, the use of this technology will benefit all industries. Think of the cost and time savings it could represent for the medical, government and education sectors where the timely and secure storage and dissemination of information is of paramount importance. It is safe to say that here will be very few sectors unaffected by the revolutionary advantages of Blockchain technology. It may not be as life changing as the World Wide Web, but it has the potential to become a mainstay of everyday life.
Furthermore, we hold the view that the widespread use of Blockchain in our industry may well be closer than we expect. At least one major shipping line is currently working on internal Blockchain development and the software houses in the background of this industry have started planning their moves too…