Blockchain in the Logistics Sector

blockchain in the logistics sector

Although logistics has not been one of the first sectors to dive into digital transformation, it is now becoming more and more open to technological innovation and companies are implementing new initiatives designed to improve the efficiency and quality of their services through digitization.

Blockchain in the logistics sector

One of the technological trends becoming stronger in the sector is blockchain technology, which offers many advantages for the logistics chain. Blockchain is the technology that supports bitcoin or cryptocurrency. It is a system that allows automating transactions in a totally transparent manner and without any errors possible since it is an accounting system divided into blocks that come together. Another novelty that emerges with blockchain technology is smart contracts, which are essentially self-executing contracts. Once the parties sign the contract, each phase of the contract is automatically executed as the process progresses.

Let’s take an example applicable to the logistics sector: importer and exporter enter a smart contract for an international logistics operation. But other agents in the chain, such as insurance companies, banks, carriers, and freight forwarders could also participate in different phases of the process. The contract covers each and every one of the phases of the international shipping process: both the formalities and the deadlines, as well as the transactions to be carried out and, each time a phase ends, the contract automatically executes the corresponding order. When delivery is confirmed, the contract automatically executes the payment order from the transaction.

It is, therefore, a very efficient way of ensuring transparency throughout the logistics operation, through a fully automatic system with no possible errors that enables communication between all parties involved.

Blockchain and traceability

Another advantage of blockchain technology in the logistics sector is that everything is registered. This is why blockchain technology really helps with enabling and improving traceability throughout the supply chain.

We can find an example of the use of blockchain technology in carrier Maersk, which has implemented blockchain solutions in the international transportation of goods, achieving complete digitization of the entire shipping process and improving the traceability of shipping containers.

On the other hand, Carrefour has also used blockchain technology to improve the traceability of fresh products, providing information about the origin and treatment of items such as free-range chicken through QR codes available to the consumer, thus enhancing the transparency of the product.

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