the detailed coordination of a complex operation involving many people, facilities, or supplies.
Logistical systems rely heavily on intermediaries, coordinating transactions and record keeping. The complexity of supply chain management has plagued the logistics and transportation industries for decades and its inefficiencies continue to multiply as the e-commerce industry continues to take over our growing economy.
Blockchain promises to simplify these ancient processes by replacing middle men with a self governing system which in turn provides layers of trust, efficiency and transparency to the global industry of logistics. At GoChain we are committed to improving the logistics industry in three primary ways
Creating an efficient system in logistics requires working with others globally with transparency to ensure and optimize the transportation of physical goods between parties and safeguard information and financial transactions. Trust is absolutely necessary in a system built like this. However, the competitive nature of the logistics industry combined with unstandardized processes, data silos and diverse levels of technology adoption leads to low transparency and a fragmented system.
Blockchain can improve efficiency in global trade by minimizing the bureaucracy in administrative procedures. The need for many participants being involved and the extensive amount of paper work required would be replaced with an automated process that enables a systematic approach to tracking a products lifecycle from its origin to the store shelf, and facilitates all ownership transfers as it makes its way between the manufacturer, wholesaler, retailer and finally to the consumer. Blockchain enables a direct relationship between each participant with absolute trust.
2. New Business Models
Having an efficient automated trustless system enables the ability to introduce and improve other areas such as micro payments, certification validation, digital identities, and providing integrity to documentation. For example, logistic service providers rely on drivers and currently paper based certifications can be easy to forge. With blockchain, training organizations could replace the outdated paper system with a tamper-proof digital version. Beyond logistics identity-related services could disrupt current business practices in other organizations as well.
The overall market for blockchain is expected to boom over the next ten years. Estimated projections go from $411.5 million in 2017 to $7.68 billion by 2022. This growth is attributed to the rise in applications for banking, financial services and insurance and identity solutions. Companies are beginning to understand how blockchain technology can empower their current models and provide tangible growth in value prop , especially in the logistics industry.
According to one estimate from the World Economic Forum, reducing supply chain barriers to trade could increase global gross domestic product (GDP) by nearly 5% and global trade by 15%
3. Reduce Friction: Faster and Leaner Logistics in Global Trade
Disruption caused by error or oversight causes major challenges for logistics service providers. Friction in global trade can cost service providers and everyone involved millions in time and money.
With proper integration of blockchain technology companies can reduce the risk of error in all areas of the supply chain including procurement, transportation of goods, tracking working with customs and trade finance.
Accenture expects that at least 5% in annual freight spend could be reduced through improved invoice accuracy and reduction of overpayments.
Case study #1: WalMart
WalMart is using blockchain technology to improve supply chain transparency and to track provenance. Since last year, WalMart requires lettuce and spinach suppliers to use a blockchain database. In the event of contamination by food borne illnesses, WalMart can identify through the blockchain the precise point of contamination.
This allows Walmart to ensure food tracking, traceability, and safety. Walmart is now able to guarantee the quality of their produce which also saves them money and keeps them accountable. If another Ecoli outbreak occurred they would be able to detect it before reaching stores and discard the affected foods, substantially reducing the likelihood that infected food will reach the consumer.
Case study #2: Maersk
The world’s largest shipping company, Maersk is utilizing smart contracts and blockchain to digitize international trade. Their tested system allows each participant in the supply chain to view the progress of a transaction through the supply chain without compromising the integrity, privacy or confidentiality of the transaction. This makes it easier for shippers, freight forwarders, port operators, customs regulators and all others to know where a container is in transit and allows for direct interaction through real-time access to data and documents. All while providing a tamper proof system less reliant on intermediaries. Maersk expects this solution to reduce friction, saving them billions of dollars annually.
“The more carriers and other ecosystem members that join the platform, the closer we come to bringing about a new era in global trade,” said Mike White, TradeLens leader for Maersk,
Want to save potentially billions? The world of logistics is evolving, and GoChain is leading the way with blockchain.
We know that when implemented correctly, blockchain can help enterprises involved in logistics and supply chain management improve efficiency, cut costs, and increase revenue by creating new products and services. However many enterprises are struggling to implement the technology correctly simply because they don’t fully understand it. Let us help you.
GoChain’s core team of expert engineers and business professionals are dedicated to working with enterprise companies and mid-level businesses to build custom blockchain solutions.
Whether your business needs general consulting, professional education, or project architecture and implementation, GoChain will be your partner and help you and your team reach all of your milestones. Let our team of experienced blockchain professionals and consultants meet with you to discuss your desired business outcomes.
Contact our team of experts today at [email protected]