Supply Chain and Trade finance are set for mass disruption, via the Blockchain. There is a large amount of inefficiencies in the current supply chain financial transactional environment. Financial transaction costs are high, and common among today’s trade. A centralized, transparent vessel for financial transactions could help automate, and improve tomorrow’s financial trade and supply side landscape.
Currently factoring is a common offering provided by banks and other financial service providers. The bank typically charges 4 to 8 percent for factoring. This is a large hidden cost in the current supply chain environment. Blockchain type solutions could systematize, currently complex financial processes.
Distributed.com recently posted an article (link below), going into more depth on the subject. Here is a quote from that article, "Blockchain immutability, together with the transparent, multiple-party access it provides to the same shared ledger, are seen as key functional attributes to improving efficiency in the supply chain process of tracking the changing ownership of goods."
It could only be a matter of years, until Blockchain is adopted in the supply chain. Large companies like Maersk and Walmart are already testing solutions. The ledger format will give all partners in the trade, a level playing field as far as an audit trail. This could potentially lead to a reduction in brokers, due to the increase in transparency. It will be fun to follow the industry's integration of Blockchain over the coming months, and years.
Colin Phillips
https://distributed.com/news/how-blockchain-technology-is-reinventing-global-trade-efficiency/