Benefits of Blockchain
We believe there is high potential for blockchain applications within logistics functions. The technology can solve key challenges by creating an encrypted digital record that tracks goods at every stage in the supply chain. It makes any irregularities that could disrupt a shipment clearly visible, enabling companies to solve problems quickly.
It can automate processes while also making it easier to verify goods – reducing paperwork and supporting end-to- end traceability. Blockchain enables organizations to share data securely and achieve common goals more efficiently.
• Authenticate data and documents: Due to its immutable characteristics achieved via cryptography, blockchain provides a secure and encrypted platform to exchange data and documents.
• Detect fraud: Every transaction is visible to all participants and nothing can be removed without it being detected. This eliminates areas where fraud occurs (e.g. double brokering). Shippers can confirm authenticity by tracking when each document or transaction was modified (time stamping).
• Prevent theft: Blockchain can contain detailed information and rules, such as photo ID requirements for pick-up or delivery, which improves security.
Provide end-to-end transparency: Blockchain provides a single source of truth by integrating data from all the participants in the supply chain.
Monitor performance: Blockchain-based monitoring of performance history of carriers and suppliers provides ‘trustworthy’ information of past performance.
Confirm provenance: Blockchain provides a proof-of- origin along with assurance of compliance and safety standards throughout the whole supply chain.
Increase real-time visibility: Blockchain-based transparency provides real-time information on events and the status of various transport modes.
• Eliminate intermediaries: Blockchain replaces the role of intermediaries by bringing trust in the ecosystem and enabling peer-to-peer models.
• Improve quality assurance: Every organization involved in a transaction can assess and validate data. Evaluating freight at pick-up and delivery locations can reduce disputes.
• Increase level of automation: Processes such as payments, transfer of ownership, settlement of tariffs or cargo checks can be automated by using “smart contracts”. Smart contracts are rule-based, automatic follow-up activities written in computer code. They can perform the next activity defined in the contract, for example by making an automatic payment once arrival of goods has been verified.
• Improve compliance: Blockchain can be combined with Electronic Logging Devices (ELDs), which send data about driving behavior to a blockchain platform in real time.
• Reduce transaction cost: Through consensus validation blockchain helps to avoid repetition of transactions as well as process errors by verifying each transaction.
• Reduce human error: As smart contracts foster the automation of processes, blockchain additionally reduces the potential for human errors, while being faster than manual processes.
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