Written by: Khairul Haqeem, Journalist, AOPG.
The modern-day supply chain is a complex labyrinth, with stakeholders and regulatory authorities struggling to maintain transparency and efficiency in a world of increasing global trade. Enter blockchain technology – the key that could potentially unlock the value hidden within this intricate system.
Blockchain technology is already making its mark in the logistics sector, with a survey by APQC and Supply Chain Management Review showing that 58% of blockchain software solutions are being used for logistics purposes. Additionally, 69% of organisations are employing blockchain-based systems to ensure supply chain visibility, and 62% use the technology to establish trust between parties and maintain data integrity.
Supply Chain Metamorphosis: The Blockchain Effect
The use of blockchain technology in logistics can unlock significant value by addressing issues such as procurement, freight tracking, the provenance of goods, customs processes, payments, and counterfeit products. There are many ways in which blockchain technology is changing the face of supply chain administration:
- Enhancing Transparency and Accountability: By enabling provenance tracking of goods, blockchain ensures that every participant in the supply chain has access to the origin of each asset, promoting transparency and accountability throughout the process.
- Facilitating Real-time Tracking: Blockchain allows for end-to-end supply chain visibility, providing real-time tracking of goods from origin to destination, reducing delays and preventing fraud.
- Automating Transactions with Smart Contracts: Smart contracts, enabled by blockchain technology, can streamline transactions and automate payment processes, reducing the risk of payment fraud.
From Theory to Triumph
Some industry leaders are already reaping the benefits of blockchain technology. Walmart, for example, has developed a food safety blockchain that tracks the origin of produce from farm to store. This increased visibility improves food safety and reduces the risk of foodborne illnesses. Walmart and IBM have also collaborated on a blockchain-based platform to track the origin and journey of food products, ensuring transparency and accountability.
Looking forward, the global blockchain market in the logistics and transportation sector is expected to experience substantial growth, reaching USD $889.3 million by 2025. As the number of blockchain-based solutions in the logistics industry increases, interoperability will become crucial, requiring the development of common standards and protocols that enable different blockchains to communicate seamlessly.
The Road Ahead
The growth of blockchain technology in the logistics industry holds enormous potential to revolutionise supply chain management. By addressing challenges such as lack of transparency, non-standardised procedures, and manual processes, blockchain technology can unlock value and improve efficiency in the global logistics sector.
The adoption of blockchain technology will not only help to enhance provenance tracking and supply chain visibility, and facilitate smart contracts but also pave the way for a future where global trade and commerce are seamlessly integrated. As more companies embrace blockchain-based solutions and interoperability becomes the norm, the benefits of this technology will continue to reshape the logistics landscape, offering a promising future for both the industry and global trade.