Use of blockchain technology in global logistics – Logistics Supply Chain

Blockchain in global logistics: potential and challenges

The use of blockchain technology in global logistics has the potential to fundamentally transform the industry and address various challenges. Blockchain is essentially a decentralized, transparent and secure database technology that stores transactions in the form of blocks and chains them together. Each block contains a checksum of the previous block, making manipulation difficult and making the system robust.

Here are some ways blockchain technology can be used in global logistics:

1. Transparency and traceability

Blockchain makes it possible to record every movement and transaction of goods along the supply chain in real time. Every participant in the logistics chain can access the same, unchangeable information. This increases transparency and improves product traceability, which is particularly beneficial for perishable goods or in highly regulated industries.

2. Efficient document management

Logistics processes often involve a variety of documents, such as waybills, invoices, certificates, etc. Using blockchain can simplify the management and validation of these documents. Digitalization and automated exchange of information can reduce errors and shorten processing times.

3. Smart Contracts

Blockchain enables the integration of smart contracts that automatically fulfill contract terms when predefined conditions are met. In logistics, for example, smart contracts could automatically trigger payments as soon as a delivery is successfully completed. This speeds up the payment process and reduces bureaucratic effort.

4. Combating fraud and counterfeiting

Since blockchain is an immutable database, counterfeit goods and documents can be more easily detected. The authenticity of products can be ensured through unique digital signatures and codes.

5. Supply chain optimization

The accessibility of real-time data on the blockchain allows companies to identify and address bottlenecks or inefficient processes in the supply chain. This leads to improved warehouse management, optimized route planning and reduction in waste.

6. Improved security and privacy

Because blockchain is based on cryptographic principles, the data is usually more securely protected from unauthorized access or manipulation.

7. View

Although blockchain technology offers promising solutions to many logistical challenges, there are also some challenges to overcome. These include scalability, interoperability between different blockchain networks, and compliance with regulations and standards.

A number of blockchain pilots have already been carried out in the logistics industry in recent years, and the technology is expected to continue to gain traction as these challenges are addressed and understanding of the potential grows.

In recent years, blockchain technology has generated enormous interest and potential in various industries, including logistics and intralogistics. Integrating blockchain in these areas promises numerous benefits, including greater transparency, increased efficiency, security and trust building in supply chain processes. The possible similarities and business models for blockchain applications in logistics and intralogistics are examined in more detail below.

1. Transparency and traceability

Blockchain enables a decentralized, immutable record of transactions and data. In the logistics industry, this property can be used to make supply chains more transparent. Companies could record their goods movements on the blockchain so that all parties involved, including customers and business partners, can track the current status of shipments in real time. This helps increase supply chain efficiency and better identify delays or losses.

2. Smart contracts for automated processes

Smart contracts are self-executing contracts that are automatically executed when predefined conditions are met. In intralogistics, for example, smart contracts can be used to automatically control warehouse processes. When certain inventory levels are reached, orders could be automatically triggered from suppliers without the need for human intervention. This speeds up the ordering process and minimizes human errors.

3. Proof of origin and quality

In the logistics industry it is often important to prove the origin and quality of the goods transported. With the help of blockchain, information about the products, such as place of production, supplier data and quality certificates, can be stored immutably in the blockchain. This allows customers and consumers to verify the authenticity and quality of the products, which is particularly important for high-value and sensitive goods.

4. Identity management and security

Blockchain can be used to securely manage the identities and certifications of people and companies. In the logistics industry, where there are many players involved in complex supply chains, digital identities can be securely mapped on the blockchain. This reduces the risk of identity theft and fraud and creates a higher level of trust between the parties.

5. Consortium blockchain for collaboration

In logistics and intralogistics, multiple companies can work together to ensure efficient supply chains. Consortium blockchains allow these companies to collectively access a blockchain and share data while maintaining control over their own data. This allows supply chains to be managed more effectively, for example by exchanging freight information, customs documents and invoices in real time between consortium members.

6. Tokenization and financing

Blockchain enables the creation of digital tokens that can serve as value representations for real or virtual goods. In logistics, tokens could be used to represent freight capacity and facilitate trading of freight shares. This could allow smaller carriers to participate in larger logistics projects and optimize financing of freight movements.

➡️ Blockchain technology has the potential to fundamentally change logistics and intralogistics. The use cases mentioned show how blockchain can enable greater transparency, security and efficiency in supply chain processes. Business models could develop around the provision of blockchain platforms and solutions tailored to the specific needs of the logistics industry. It is expected that companies that take advantage of blockchain early on will gain a competitive advantage in an increasingly digitalized and globally connected logistics landscape.

Secure identity management with blockchain – Image: Xpert.Digital

Trust-building blockchain solutions for the logistics industry. Secure Identity Management with Blockchain: The Future of Supply Chains

An example of how identities and certifications of people and companies in the supply chain can be securely managed is by using a private blockchain for identity management.

Assume that the supply chain involves various actors such as suppliers, freight forwarders, logistics companies and customers. Each of these actors has a unique identity and requires specific certifications or authorizations to operate in the supply chain. This is where blockchain comes into play to securely manage identities and certifications.

1. Digital identities

Each actor in the supply chain receives a digital identity consisting of encrypted information that uniquely represents their identity and permissions. These identities are entered into the private blockchain as participants. The blockchain itself can be a consortium blockchain that only grants access to authorized participants.

2. Authentication and access rights

The blockchain verifies the identity of each participant and grants access rights based on the predefined rules and permissions. This can ensure that only authorized actors can access the data and transactions in the supply chain. Authentication is usually carried out using cryptographic keys, which further increases security.

3. Management of certifications and licenses

Each participant can store their specific certifications, licenses and qualifications in the blockchain. For example, a freight forwarder can store its ISO certification for quality management or a logistics company can verifiably store its AEO (Authorized Economic Operator) approval for international trade on the blockchain.

4. Verification and proof of authenticity

If an actor needs to present their certification at a certain step in the supply chain, this can be done quickly and verifiably via the blockchain. The other participants can verify the authenticity of the certification through the cryptographic properties of the blockchain without having to directly access sensitive information.

5. Updates and Revision History

Changes to identities or certifications are stored on the blockchain as new transactions. This creates an immutable revision history, which can be helpful in the event of errors or traceability requests.

➡️ By using a private blockchain for identity management, supply chain companies can increase security, increase trust among each other, and minimize potential risks such as identity theft and counterfeiting. This promotes efficient and reliable collaboration along the supply chain and offers customers and end users greater security and trustworthiness of products and services.

Strengths of blockchain technology – Image: Xpert.Digital

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The real strengths of blockchain technology: security and smart contracts – Image: Xpert.Digital

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