How blockchain technology can make a difference to the logistics sector

Rapid advances in modern technology have resulted in a digital boom across the world. In this day and age, where information is readily available at the click of a button, securing this data becomes a task of utmost importance. Especially for industries dealing with logistics and supply chains, the solution requires not only security but also transparency amongst the stakeholders.

This is where blockchain technology comes in. Often regarded as one of the safest and the most transparent methods of data storage, blockchain eliminates third party platforms in the logistics of the operation.

Bitcoin may have popularised the concept of blockchain, but currency isn’t the only sphere where it has a massive impact. But what exactly is blockchain? And how do logistics companies make use of it? 

Blockchain: A ledger or something more?

Blockchain is a digital ledger that organises and stores essential information relating to transactions and other categories. It captures and encrypts important data in a series of blocks that are connected to each other and distributed to all the partners in the network.  

The allure of blockchain lies in its transparency and public accountability. Blockchain stores the information within the cloud, which is accessible by all the members in the network and cannot be changed by any one member arbitrarily.  

The digitisation of the logistics industry and the need for efficient supply chain management were fulfilled by employing blockchain technology in transportation and customer relationship management systems. The reasons for this are simple: 

It improves transparency and security 

The technology used in blockchain enables the network to store data in such a way that the information cannot be changed without the knowledge or consent of all the stakeholders. Moreover, all the people in the network have a copy of the data stored with them, making it even harder to tamper with it.   

It boosts efficiency  

Additionally, since data can be updated in real-time, blockchain ensures faster deliveries and an efficient supply management system in the logistics sector.  

The stakeholders can even trace the shipments at each step of the process.  

Blockchain reduces cost and increases revenue  

The decentralisation of the information eliminates the necessity of a third party to maintain this information, simplifying the process, while reducing cost and increasing revenue simultaneously.  

It is these advantages that have led to the rapid increase in the usage of blockchain technology not only in crypto currency, but also in sectors such as banking, pharmaceuticals, delivery associates etc. The main factor for this phenomenon is the fact that blockchain allows different stakeholders to share minimal information to assist faster and smoother operations.  

The future of blockchain in the logistics industry  

Even though blockchain has created a niche for itself in the logistics sector, it has not permeated down to the grassroots level. Smaller enterprises still depend on pen and paper to manage their inventory and data. However, this does not mean that blockchain will disappear as a fad in the near future. On the contrary, studies point towards a greater role played by blockchain technology in the management and storage of information that is trustworthy, tamper proof and easily traceable.

Businesses and players in the logistics industry have already begun training their professionals in the integration of the functions of ERP systems with that of the data structures of blockchain. Bitcoin may have been the entry point of blockchain in the world order, but it is certainly not the end. What we are currently witnessing is the resolution of the digital divide that exists between larger corporations and smaller enterprises, who have realised the potential of blockchain in the growth of their business. Pen and paper may have been the bread and butter of industries earlier, but the new world order is characterized by modern technology like blockchain.

Prashant Gupta

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Prashant Gupta is the Co-founder of ClickPost.