Since the birth of Bitcoin, with its blockchain technology, the economic sectors have been transformed and among them the logistics sector, which needs to enter the competitiveness of the logistics 4.0. This technology, on which the most famous cryptomone was based, is going to be extended to the rest of the activities.

What is blockchain?

This system was born as the basis of the Bitcoin virtual currency. Until then, any economic transaction between two parties needed an economic agent or intermediary between them.

This economic agent, which could be a bank, PayPal or Visa, came to collect all the information from the issuer of the transaction and executed it in the bank of the other party. During this process, companies were subject to the conditions and commissions of these intermediaries.

An additional problem was that the intermediary also had all the data on both parties and the operation, and could sell it to any agency looking for databases.

This new technology puts an end to all this, since both parties can make transactions or business directly, thus saving commissions and also protecting their data. The data travels encrypted between the two sides protecting all the information.

Characteristics of the block chain

  • Technology has expanded to other sectors not only the economic one.
  • The information has to be verified by all parties involved, once this is done it is considered validated. The registered information cannot be deleted and the rules that have been established must be followed.
  • To complete the transaction, the process must be accepted by both sides and recorded in the appropriate block.

The different platforms

There are three possible block chains

Public channels: Everyone can participate in the nodes, there are no restrictions. For business there is less security.

Private chains: Access is restricted to those allowed by the users of the networks. Everything is more controlled and the security is higher.

Multichain: Its origin is the private chains but the administrator allows to create subchains with users with different permissions.

The transformation of the Logisitca by the blockchain

In international commercial transactions, the difficulty of transactions is very high. An infinite number of parties are involved and a great deal of paperwork has to be done at a significant economic cost.

The agents in the operation have to go through a large number of intermediaries, from customs in various countries, banks, insurance companies, logistics agents, ... many of them thousands of miles away, who do not know each other and will not do so on many occasions.

This whole process involves taking more security measures as so many parties, many of them unknown, are involved. The process expands over time, increasing its economic costs.

The Impact of the Blockchain

The new technology has features that will influence logistics in several ways. This system is a large database where all members are interconnected, permanently. Each party has a node of this connection and can manage it, thus liberalizing the transactions, making everything is decentralized.

One tool it offers is intelligent contracts, these will eliminate obstacles and difficulties such as paper documentation. These contracts are fixed between the members involved in the operation and will be executed automatically without the need for any human intervention.

The contract itself is a computer program where the parties fix the object of the contract, the actions to be carried out and the clauses that affect it. The program extends to all the members of the network without anyone being able to modify it.

Implementation in the logistics sector has been extended to 4 levels so far. Land transport of goods, product traceability, international trade and last mile delivery. There are already private companies operating in these fields, as well as public services such as the Canadian, Australian or United States Post Office.

These technologies will allow alliances between different operators, in order to achieve the implementation of these systems and make them expand throughout the distribution chain. The technology will allow an optimization of the whole process. All parties will know the information and share it in real time, avoiding unnecessary delays and costs.

As all movements are recorded, traders will be able to track and audit all trades. Maximum security. All information travels and is stored encrypted, so no one can manipulate it or read its contents if they are not one of the involved and authorized members.

Loyalty is increased. The direct relationship between customer and supplier allows for greater business satisfaction and therefore a better relationship between everyone. The chain of blocks is a technology that comes to transform the way of relating between the parties in the business. Surely in your sector of activity can be implemented, providing great benefits.

Real uses of blockchain in logistics

Although it is a relatively recent technology, which has proven its effectiveness in supporting financial operations, many companies in the logistics sector have already begun to incorporate the blockchain paradigm in different processes involving the use of networks.
The most important of its uses is the one that allows the realization of Smart Contracts. By being able to make digital transactions between two parties with authenticity validated by a network of thousands of computers that create an unalterable record, the application possibilities are endless.

Freight forwarders and blockchain

In areas such as international trade, where a multitude of different agents are involved and a large number of documents are generated, the blockchain makes it possible to establish a secure network between all parties involved in the logistics chain.
The authenticity of any electronic document can be validated instantly without the intervention of a third party to certify it. Paper can be dispensed with and all documentation and payments can be managed from a single channel. This minimizes possible communication errors, reduces paperwork and, by having a solid, reliable and shared data source, increases security at all levels.

The blockchain in ground transportation

The main advantage for the road transport sector is the possibility of establishing collaborative networks without intermediaries.
On a practical logistics level, virtual spaces and secure platforms can be created , where shippers receive orders directly from carriers without the need for intermediaries. This makes it easier to manage loads anywhere in the world, avoiding empty trips. In addition, the possibility of creating 'Smart Contracts' reduces the risk of non-payment and late payment.

Blockchain and Traceability

With a blockchain-based system, it is possible to record in real time the status of a product regardless of where it is in the logistics chain and who is handling it.
For example, we can transport fruit by creating an unalterable digital fingerprint of each consignment, accessible and available to any participant involved in its transport.