The industry is facing unprecedented challenges. Blockchain can help meet them.
Global logistics is a difficult task under perfect circumstances. So many things could go wrong – weather events like typhoons and hurricanes, busy sea lanes, complex import-export regulations, and more – all while meeting strict timetables. Then the COVID-19 lockdowns of 2020 made everything even more difficult. As a result, the cost of transported goods skyrocketed. The World Container Index, a reputed research, advisory and consulting service that tracks the average cost of shipping a 40-foot container over eight different sea lanes, reported a 360 percent increase in 2021.
The industry has taken measures to bring operations back and control costs. Furthermore, the challenges of the early 2020s have convinced logistics, warehouses, and other supply chain partners that legacy paper-based processes and limited visibility are not sustainable ways to operate.
Technology solutions providers (TSPs) will find that supply chain businesses are primed for a better solution, such as blockchain for logistics and smart warehouses.
The Benefits of Blockchain for Logistics and Smart Warehouses
Blockchain offers a secure, immutable record that has many advantages. Solutions leveraging blockchain for logistics provide your clients with the following:
- Increased Visibility
Shipping internationally has historically meant long periods when companies do not know exactly where their products are or the conditions during transportation or storage. Blockchain allows warehouses and logistics companies to track products in real time and identify inefficiencies and bottlenecks. Information is stored in a distributed ledger that all parties can see so companies can reduce administrative costs. A blockchain peer-to-peer network also prevents wasted time finger-pointing as companies try to figure out where a shipment is and where something went wrong.
- Cost Savings
Blockchain technology could be the solution to finally adopting electronic bills of lading. Digital Container Shipping Association (DCSA) research has found that if even half of all bills of lading could be issued in digital formation, the shipping industry could save USD 4 billion per year.
Blockchain replaces traditional paper documents and courier services with an immutable audit trail, strict confidentiality, and transparency among supply chain partners. As a result, it overcomes challenges that electronic bills of lading presented to companies in the past.
- Proactive Inventory Management
Traditionally, warehousing has been a reactive business. Every day, operators deal with the unknown, from shipments delayed by weather to workforce changes and delays at ports. However, with real-time blockchain data, warehouse managers can track incoming inventory and plan work proactively.
With blockchain, manufacturers can also see end-user demand the moment it is reflected in the system, allowing for better management of manufacturing planning and agile inventory replenishment.
- Automating Manual Processes
Smart warehouses are using drones to count inventory and robots to assist laborers with picking and shipping. Implementing blockchain allows warehouses to fully automate and digitize recordkeeping, increasing efficiencies in all phases of operations.
- Anti-Counterfeiting, Anti-Tampering Measures
Information stored in a blockchain can’t be changed without all parties’ knowledge. Blockchain can allow a supply chain to create an immutable record of each transaction and movement of a product. For example, companies can use secure RFID tags or laser signatures on a product’s surface for data collection. That data, stored in a blockchain, assures that the products that arrive at their destination are the authentic ones that the manufacturer shipped.
Don’t Be Left Behind
Leveraging blockchain for logistics and smart warehouses can solve some of the industry’s most pressing problems. Develop resources on your team with blockchain expertise and educate your clients and prospects on the benefits of an immutable track-and-trace system.
TSPs working in the supply chain and logistics space that successfully implement these solutions can position their businesses for the greatest success.