Globis enters global market through joint venture with NINtec
05/07/2017
Globis: ready for the major breakthrough
05/07/2017

Ready for the logistics blockchain revolution

Blockchain technology is set to be the next revolution in the logistics sector, although this is probably the first time you have heard of it. Nonetheless, the revolutionary system offers numerous benefits: transparency, reliability and a much more efficient distribution of data throughout the entire chain.

What is blockchain technology?

There are many ways in which blockchain technology can be used for logistics applications. “In the case of logistics, the structure used is based on the sender, recipient and haulage firm each managing part of the blockchain,” said Dimitri Verhelst, founder of blockchain specialist Juru. “Authorities such as the customs agency can also have a node, allowing them to obtain input in a blockchain. This allows them to record all the information in the blockchain. ”

The fact that so much information can be recorded in a blockchain presents opportunities. “The logistics sector is currently still heavily reliant on a number of central authorities, such as the customs authorities, and government databases,” Dimitri Verhelst explained. “A blockchain structure can remove the need for central databases, which are an easy target for people with malicious intentions. The data in the blockchain is spread across the internet, which makes it less vulnerable while retaining the same level of accessibility.”

Transparency and reliability

The main benefits that blockchains offer for logistics companies are transparency and reliability. Each transaction in the logistics chain can be recorded in a blockchain. All parties can view the transaction at any time. Moreover, they also have to endorse the history of all transactions in the blockchain, which guarantees the reliability of the data in the blockchain.

A blockchain can also process and record external data. “A thermometer can be placed in a consignment of frozen fish, for instance, and the data from the thermometer can be recorded in the blockchain,” Dimitri Verhelst said. “This allows the customer to monitor the temperature of the consignment in transit and check that agreed arrangements have been adhered to.”

Smart Contracts

The blockchain structure also opens the door for smart contracts. The terms of a smart contract are recorded in a blockchain, and the money to be used for payment is blocked by an external party. The sender is paid automatically when it complies with all of the terms of the contract. If any problems arise or errors are made, the money is refunded to the customer. This means that invoicing and payment can be handled without any human input being required.

Smart contracts and the blockchain technology on which they are based therefore offer the possibility of a fully automated chain, leading in turn to much higher levels of efficiency. “In order for a blockchain to succeed, however, there must be a willingness to cooperate,” Dimitri Verhelst noted. “Parties also need to be prepared to be transparent and share information with each other. While this can still prove problematic today, as it flies in the face of many existing business models that are based on pillars, the benefits of collaboration and transparency mean this development is inevitable.”

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