2019 is the year that blockchain is going to be fully harnessed by the global logistics industry.
The global logistics industry is a sector grappling with inefficiencies, poor accountability, cumbersome paperwork, fictitious pickups, among other issues. But this could all change with the continued implementation of blockchain technology in 2019.
Blockchain is a distributed digital ledger system devised to record transactions and any other thing of value. Transactions recorded in blockchain are secure and generally, immutable once confirmed. Information held on blockchain exists as a distributed and continually reconciled database, which means the data is truly transparent and easily verifiable.
Blockchain to increase to increase freight efficiency
For the logistics industry, blockchain offers numerous solutions for all parties in the value chain, including manufacturers, shipping lines, suppliers, auditors, suppliers, and port operators. Shipping lines in 2019, for instance, could leverage distributed ledgers to enhance security and efficiency of freight operations as well reduce costs and shipping time. With the help of blockchain, port operators and shipping lines will be able to optimize and streamline their carrier onboarding processes by improving workflows and supply chain visibility.
While there were plenty of blockchain-based logistics pilot projects launched around the world in 2018, it is projected that 2019 could be the year this disruptive technology is harnessed even more productively in the logistics sector. In 2019, many importers and exporters that are working with logistics firms can choose to leverage blockchain technology when shipping goods across the globe.
By tapping into blockchain-based supply chain platforms like TradeLens and VeChain, these importing and exporting companies can approve shipments, negotiate rates, view their cargo be loaded/unloaded, and track important aspects such as schedule pickup, customs clearance, and delivery.
The World Economic Forum estimates that improving communications and border administration using distributed ledger technology (DLT) could generate an additional $1 trillion in global trade. Because shipping globally involves multiple parties, blockchain could benefit logistics by reducing paperwork and maintaining instant access to immutable records of information about the shipment status.
In addition, implementation of blockchain in freight and logistics in 2019 can help eliminate the necessity of intermediaries in the logistics, as it enables direct communication between all parties.
Logistics to experience enhanced transparency
Distributed ledgers make it possible to create and maintain a fully transparent log of supply chain activities for greater accountability and transparency. This enhanced transparency is not only critical in boosting trust between customers and manufacturers but it also helps to minimise cases of fraud and cargo theft.
For example, a blockchain-based car parts tracking system could be used to instantly capture and store data about vehicle parts and history so that all participants can check whether a part is counterfeit or when it has reached its usage limit.
Shift to blockchain-based cross-border payments
In 2019, the logistics industry could shift to lower cost methods of cross-border payments enabled by blockchain technology, leading to secure and faster payments. This could make it easier for cross-border, international payments regarding the shipment of goods to be done safely, faster and securely.
There’s no denying that the logistics industry is poised to be transformed by blockchain, especially as small to midsize importers and exporters get more involved.
Regardless of what happens in 2019, global logistics must be ready.
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