Immutability, transparency and the elimination of
intermediaries are some of the most cherished
attributes of the blockchain upon which a lot of
disruption is happening across various industries.
Being able to keep track of processes, goods
and services across extended chains of
communication is a development that has
become very essential to the social and
commercial aspects of human existence. As
international trade and logistics continues to
expand, more efficient methods are being
developed to enable effective service delivery
and value transfer, however certain limitations
still exist, making it necessary for blockchain
implementation which would enable the
application of its inherent properties.
Getting rid of human interference
CEO of Netcoins, Michael Vogel tells CCN that
the main limitation of any logistical system is the
human component. According to Vogel, whether
it is data entry, auditing, errors due to typos or
miscalculations, all processes which involve a
human touchpoint introduce possibility for
delays or errors. In fact this is why VISA Europe
is exploring the idea of using Bitcoin and
blockchain technology behind-the-scenes to
improve internal fund settlements (to improve
response time and accuracy).
“Blockchain is the perfect tool for logistics
because it takes the traditional database to the
next level, an immutable record which is ideal for
audit-keeping and immune to tampering” , says
Vogel.
He also notes considering accounting as part of
logistics, the dawn of blockchain has created an
opportunity for the concept of “triple-ledger”
accounting, an idea in which a third accounting
ledger based in a blockchain is kept along with
all financial records. This allows for instant
auditing, as opposed to the traditional practice
of quarterly reviews.
“As soon as Blockchain networks begin taking
their first steps on a mass-market level, they will
save the international trade industry at least $50
billion USD per year. And upon maturity,
Blockchain technology could save the logistics
industry a whopping $500 billion USD per year in
mundane expenses, along with other benefits
that come along the way”, says John Monarch
CEO at ShipChain .
A higher level of security
Monarch explains that connected devices
revolving around the Internet of Everything (IoE)
need a higher level of security. Monarch notes
that Blockchain technology is a matchless
solution in this regard because it provides the
best protection through distributed ledgers,
advanced encryption, smart-contracts and
reduced intermediaries. As a result, this will
tackle corruption, ransomware, theft, premium-
fees and tracking issues.
As at the time of writing, the logistics sector
employs the most people in the world, and as
this sector expanded over millennia, it has
required innovation to scale and sustain
practicality for the growing human population.
This is happening again at the time of writing,
with the fourth industrial revolution.
Removing waste
According to Jeremy Epstein , CEO of Never Stop
Marketing, one of the biggest challenges in
supply chains is redundant systems that don’t
talk with each other. This he says adds a huge
amount of friction and cost in terms of the
supply chain. Epstein notes that different
organizations, be it governments or vendors,
spend a lot of time verifying that shipments
contain the items they are supposed to. When all
is said and done, this adds cost to the customer.
Epstein tells CCN:
“Blockchain technology affords us the
opportunity to remove a great deal of the waste
inherent in these efforts, providing higher quality
goods at lower costs by ensuring that a given
container has the products listed on the
manifest contained within it or by ensuring that
no tampering has occurred with products en
route, which will lower customs enforcement
costs and increase security as well”.
