Blockchain technology – A revolution in the logistics industry

News Technology

Annika Monari, CEO and Co-founder of Artos Systems shares with us why blockchain will transform logistics.

Problems with traceability and information transparency regarding products in large supply chains cost enterprises countless working hours and funds. Such pain points in the logistic industry could be mitigated or perhaps entirely resolved by implementing blockchain technology. These are only two of the many issues that plague the industry, which will be eradicated with the mass adoption of blockchain in the near future.

READ MORE FROM THE LOGISTICS POINT FEBRUARY EDITION NOW

Logistics make up one of the leading industries globally, interconnecting nations around the world. Advancements in supply chain management have implemented agile strategic planning. An essential component since they are becoming much larger and more interconnected with each passing day. Never before the need to adopt new processes and technologies were this evident.

What is also quite evident is the need for trust and information transparency. Philosophically, one doesn’t exist without the other. Nevertheless, the majority of enterprises see transparency as a threat and not an added value. Players who refrain from seeing the benefits of information transparency will be left behind in a world populated by educated, quality-focused consumers that base their decision-making mostly on verifiable information, the foundation of trust. It’s important to note that not all data must be made transparent, sensitive and private information may remain confidential while the audit trail can be made public.

Today’s systems do more harm than good in developing and maintaining trust between partners. They make it difficult or impossible to track progressing steps through the supply chain since the systems are siloed and typically operate within one company. Across companies, data sharing is not done because the systems are not interoperable.

Precisely, the type of data needed for process optimization, traceability, undisputable trust, and profitability in the web 3.0 age. Luckily, blockchain technology is here to stay, and it will solve nearly all current issues regarding logistics and supply chain.

What’s Blockchain?
Blockchain is a technology, a public electronic distributed ledger. Information stored in the blockchain is incorruptible and transparent to all participants. It provides

unprecedented data security and allows full trust between parties. Fundamentally, it decentralizes data centers and distributes it throughout the network. Since the data has no owner or location, no entity can unilaterally alter data, ensuring consistent information precision within the chain. Although blockchain allows full data transparency, it also allows for information permissions giving enterprises flexibility to decide the levels of information access for each stakeholder.

Several of the world’s largest enterprises, such as Maersk, Alibaba, Microsoft, and Amazon, are investing heavily into the blockchain ecosystem. The World Economic Forum estimates that blockchain implementation will significantly reduce obstacles to supply chains worldwide. In particular, easier access to the global supply chain could potentially increase sales by 15% and GDP by 5%.

What’s next? – Blockchain in logistics
If blockchain technology is such a revolution in the logistics industry, why isn’t everyone implementing it? Practical improvement does happen overnight. Just like the web gradually overthrew the intranet, blockchain will do exactly the same to outdated systems used in trade and logistics.

Although blockchain might sound like a miracle on paper, it requires cultural and systemic change on all corporate levels. Firstly, logistics enterprises need to digitize, standardize, and also clean up their data. Luckily, blockchain solutions such as Artos are putting in place a platform to facilitate the transition. They have had success in the mining industry and are expanding to agriculture, chemicals, and beyond. In any case, the bottom line is, blockchain will impact the logistics industry and life as we know it. There will always be skeptics and naysayers, but the benefits are indisputable. They are the same kind of people that in the ’90s laughed at Bill Gates when he explained the power of the internet. We know what happened to them. They either had no option but to adapt to a new reality or go out of business. Survival of the fittest, as simple as that. ✷

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.