24 Dec How is Blockchain technology changing the face of the Logistic Sector
According to the latest IMARC Group report of 2017 the global logistic market is estimated to be US$1,171 Billion, and by 2023 it is expected to grow upto US$1,374 Billion. With a steady CAGR growth of 2.7% between the year 2018-2023, it is expected to reach the zenith of growth and development soon.
The three major factors that will be responsible for its flourishing future are Infrastructural Development, Newer ordinances and decrees for trade regulations and Technological backup. As for now, the Logistics sector encounters numerous challenges like, the absence of trained manpower, poor infrastructure, inefficient storage facilities, deceiving trade regulations, lack of innovative communication and information technology etc.
In the world that is diving into the deep sea of resources and alternatives. The demand of customers has also changed exponentially. Now, they need to have end-to-end solutions to their problems. The time when the sharks like Amazon and Alibaba has introduced live tracking, digital transactions, one-day delivery etc how can Logistics sector be much far behind when the expectations of the customers remain the same? After venturing into newer technologies like AI, machine learning, robotics etc, Blockchain is being considered as the solution to all managerial problems, making distribution of digital information in an efficient and secure way.
What is blockchain?
A Blockchain is a form of digital ledger that records data in forms of block. As in, records of data that are stored and distributed among various systems in a network. It can be accessed with individual passcodes and but can’t be copied. It is an ingenious invention that was brought at first to carry out digital transactions concerning cryptocurrency.
However, it has now spread to various other sectors like finance, healthcare, transportation, food etc. The fundamental objective of using blockchain for various industries is that a blockchain is not controlled by any administrative body and thus it eliminates chances of data piracy, hacking, data destruction etc. It is a safe method of encrypting information within the network.
The parameters that measure that relevance of the Blockchain system in Logistics are quite broad, as in covers multiple aspects of the sector. Simply describing it as a savior might not justify the criteria that it covers in the process. It is meant to shield the foundation of Logistics industry by processing information/data, transaction (Monetary/Data) tracing or tracking multitudinial operations around corporate boundaries. Serves every root of E2E model of business and capacity monitoring or planning structure. Recent association of IoT and Sensors are additional facets that documents and analysis the entire supply chain cycle, generating efficiency and asset.
How will Blockchain help Logistics?
Blockchain is an advanced concept that has helped various sectors in supply chain, and Logistics is one sector that needs modern solutions for its evident problems. Management solutions for all logistical problems from various segments like distribution, retail, supply, and manufacturing. Since there is a need for more convenient and effective solutions for these quarters, Blockchain Logistics is a fitting solution. Let us find out how is it having positive effects?
- Data Transparency- In the logistic field, it is integrity and credibility that is valued and must be put into priority. Any B2B transaction of Logistics and goods rely over the cold shoulders of reliability. Blockchain is medium through which businesses can document evidence-based information for invoicing, business auditing, etc. It is a complex process in itself, also involving multiple personnel to complete the supply chain. The process is the complicated and black chain is a structured way of achieving improved visibility.
- Privacy and Security- Building a secure and robust system to have a clear view of tax invoicing and payments is a major challenge that the logistic industry suffers from. The Blockchain Technology is meant to dissolve such worries, providing end to end encryption. Creating smart contacts to process payment eliminates the chances of unsecure payments and data privacy. There is direct air of contact that must not be compromised in the presence of Blockchain technology. Avoiding unauthorised access, data loss, piracy, forgery or any foreign intervention
- Automated Workflow- For an industry that relies on time management and accuracy, it is essential to build a system that not just concern integration of various sectors but also have a regularized interface. In absence of these, there are chances that exercise of the other sectors temporary slows down. Blockchain system is a solution to such catastrophic situations. It changes the model of business processes and helps in quick decision making. Thus, there is efficient use of manual labour where there is a requirement.
- Digital interface- The system caters to its consumers in a way, that reduces not just human effort but also regularises digitization. An impressive accumulation of tools and instruments that is viable and as per international standards. Less paperwork with online verification tools, digital signature, authenticity instruments etc. A powerful system that gives out constructive results.
- Absolute Traceability- Blockchain Logistics help providing a track of each trace and movement of the shipment. There are various stations that have a significant job responsibility. Blockchain follows each step of the traceability process and complete protection to shipments. Any glitch or mistake can be detected and precisely changed to lead the defined algorithm.
- Annihilate middlemen- Logistics is an expensive affair and is so because of the emphasis on monopoly of the middlemen. Blockchain helps in removing such middlemen and directly connects to the global supply chain. No hidden identity and no exorbitant freight fares. This is highly beneficial for small enterprises to know their audience and also provide real-time shipment details, avoiding documentation mistakes.
- Cross-border transactions- Blockchain also enables cross-border transactions. It helps to securely transfer money without usual hindrances like currency, institutional miscommunication and delivery. All is done at ease and keeps intact the relationship between various segments of Logistics like merchants, vendors, retailers, shipments partners etc.
- As per government compliance- Blockchain not just manages, but it also works as per the rules, regulations and laws of the particular government. In global supply chains, it keeps on track, both the parties and its government. The legality of the action and process is thus kept into consideration.
Blockchain is a major boon to the Logistics and it is expected to bring umpteenth growth in the industry and its key characteristics. The system also promises to change the outlook of Logistics by eliminating all the presently occurring challenges and bringing about balance in the sector. Therefore, Blockchain will spearhead the digital revolution in the Logistics industry.