Making moves: How blockchain is quickly becoming a must-have in logistics
As of 2017, the logistics industry was valued at a staggering $8.1 trillion; it's projected to nearly double that valuation by 2023.
Although the payouts can be lucrative, shipping companies and retailers are losing out on a significant percentage of the profits due to inefficient practices, unnecessary middlemen costs, theft, cyber attacks and food spoilage. Mislabeled, mis-shipped and stolen cargo alone accounts for at least $50 billion in losses every year.
Blockchain offers an end-to-end solution for companies that want to run leaner, more organized and more efficient operations.
A decentralized public ledger system that documents all changes to a record in real time, Blockchain can help make logistics companies more efficient via a public ledger system that records the motions of each shipping container. Armed with that data, companies can implement faster routes and eliminate unnecessary steps in the delivery process.
Distributed and decentralized ledgers reduce bottlenecks and clerical errors, as well. Using smart contracts, retailers no longer need brokerages, lawyers or other third parties to complete tasks. Smart contracts enable retailers and logistics companies to enter binding agreements that will immediately dissolve if all agreed-upon stipulations aren't met. These ledger-based contracts increase transparency and profits while decreasing delivery time and costly errors.
The field of logistics is primed for a technological upgrade, and a distributed ledger is the next big thing with its transparent recordings, reduced costs and efficient route information. Coupled with emerging technologies like big data and artificial intelligence, Blockchain could even increase the global GDP by 5%.
Below are 13 innovative examples of how blockchain is delivering on its promise in the logistics industry.
Location: San Francisco, California
Blockchain logistics application: Chronicled is combining blockchain with AI and IoT devices to automate traceability and instantaneously approve financial transactions in the shipping industry.
Chronicled’s blockchain-enabled IoT devices give logistics companies better insights into environmental conditions and transfer-of-custody processes. As a result, businesses can securely and efficiently move their products all over the world.
Real-life use case: Part of the MediLedger Project, Chronicled already worked with pharmaceutical industry giant Pfizer on a pilot program to better track medicines.
Location: Los Angeles, California
Blockchain logistics application: ShipChain built a blockchain-backed logistics platform to support the shipping process from end-to-end. The platform allows for all parties on the chain to receive updated information on a container's whereabouts and estimated arrival times via encrypted public ledgers. Founded in 2017, the company has already received more than $30 million in funding.
Real-life use case: ShipChain offers incentives for logging the most efficient shipping routes on their blockchain platform, enabling other users to replicate these time-saving routes.
Location: Zurich, Switzerland
Blockchain logistics application: Pharma-focused modum offers blockchain-enabled products that manage the production and shipment of medicines. The company’s temperature monitors, en route tracking and smart contracts all work to ensure that medicines arrive safely and on time. Modum raised more than $13 million during its token sale in late 2017.
Real-life use case: Modum recently announced a partnership with the Swiss Post to integrate temperature monitoring and track-and-trace mechanisms into Switzerland’s national post office.
Location: Hong Kong, China
Blockchain logistics application: 300cubits’ tokens are cryptocurrency for the logistics world. By locking into smart contracts and using the company’s TEU tokens, retailers ensure that they will provide a certain quantity of products to ship, and shipping companies set deadlines and quality standards for their shipping processes. The TEU tokens bring an element of trust to a sometimes trust-less process.
Real-life use case: In March 2018, TEU tokens were successfully used as a blockchain-based booking deposit on a shipping container going from Malaysia to Brazil. The tokens were paid by both parties and returned upon successful execution of their smart contract.
Location: Zurich, Switzerland
Blockchain logistics application: SkyCell’s shipping containers are designed specifically for the pharmaceutical industry. The company’s containers are made of recycled materials and contain temperature barriers to protect the most sensitive medicines. SkyCell is placing their entire infrastructure on a decentralized blockchain platform because they believe it offers the best security, product monitoring and data verification at a 20% lower cost.
Real-life use case: SkyCell has partnered with Cargolux and Emirates SkyCargo to give them exclusive rights to ship their temperature controlled containers to more than 150 locations worldwide.
Blockchain in Transport Alliance (BiTA)
Location: Chicago, Illinois
Blockchain logistics application: The Blockchain in Transport Alliance (BiTA) was created as a forum for the logistics industry to discuss and develop plans for implementing ledger technology in shipping.
The alliance is currently working on common standards and practices for the industry while attempting to educate professionals on the benefits of blockchain. Logistics behemoths like UPS, FedEx, Uber Freight, Union Pacific Railroad and project44 are just a few of the companies who are members of BiTA.
Real-life use case: Currently boasting more than 100 global retailers, consulting firms and logistics companies, BiTA has been influential in implementing blockchain in everything from the Port of Shanghai’s receiving systems to easing cargo movement in Britain’s maritime trade.
Location: Phoenix, Arizona
Blockchain logistics application: Sweetbridge focuses on liquidity and flexibility in the supply chain. The company uses blockchain to help free up billions of dollars that are currently in limbo over payment disputes. With real-time auditing ledgers, smart contracts and Sweetbridge’s own crypto, Sweetcoin, disputes over payments are easy to settle in a matter of seconds rather than days or weeks.
Real-life use case: Sweetbridge’s technology is starting to be implemented in food supply chains to speed up shipping processes and ensure a longer shelf-life.
Location: London, England
Blockchain logistics application: Provenance uses blockchain to increase transparency in the retail industry.
To give consumers a better idea of their business's practices, Provenance retailers can document the origination of their products and showcase their supply chains on a ledger. Provenance's goal in using blockchain is to hold retailers accountable while helping members make higher-quality, more trustable products.
Real-life use case: Working with members of the nonprofit International Pole and Line Foundation (IPNLF), Provenance developed a blockchain system to track the fishing chain of tuna. The program is now being used in small fisheries in Southeast Asia.
Blockchain logistics application: WaltonChain is enabling the next generation of Value Internet of Things (VIoT). Still in its early stages, the company plans to combine blockchain-backed RFID chips with IoT devices to boost safety and efficiency.
They are looking to integrate the ledger technology with supply chains for smart cities and agricultural IoT devices.
Real-life use case: The company worked with a high-end Chinese fashion designer to implement a blockchain-backed sustainability technology that will transparently display how a shirt was made, from thread sourcing to shipment.
Location: Zurich, Switzerland
Blockchain logistics application: The sister company of SkyCell, FoodGuardians helps protect food and keep it fresher longer. Paired with the company’s temperature barriers and patented insulation, the blockchain-based software helps food supply chain managers efficiently track and trace the life cycle of their most sensitive foods.
Real-life use case: Still in the early stages of development, FoodGuardians has done a few successful tests of its blockchain-backed food supply software and containers.
Location: Amsterdam, Netherlands
Blockchain logistics application: Koopman Logistics is an automotive transportation company using blockchain to ship cars all over the world. The company uses ledger technology to reduce paper supply, quicken the payment process and enhance the overall security of the shipping process.
In April 2018, Koopman became the first automotive logistics company in the world to deliver a vehicle in a completely paperless blockchain process. Customers used smart contracts and a chain-of-custody tracking system to keep an eye on their new roadsters throughout the process.
Real-life use case: Koopman partnered with IBM to develop a VIN-based blockchain car registry that instantly tracks and traces a car's life from first screw to owner acquisition.
Location: Irvine, California
Blockchain logistics application: Guardtime’s blockchain for maritime logistics aims to correct industry issues stemming from inefficiency as well as lack of trust and transparency. The company’s ledger uses smart encrypted contracts and decentralized shipping tracking to quickly verify data in a manner that protects it from cyber attacks and manipulation.
Real-life use case: Guardtime recently introduced the world’s first blockchain-backed insurance for maritime shipping companies. In partnership with Maersk, Willis Towers Watson and Microsoft, Guardtime’s Insurwave will use blockchain to collect pertinent insurance data on more than 1,000 vessels.
Location: Amsterdam, Netherlands
Blockchain logistics application: CargoLedger builds blockchain-based software for the logistics industry. Mainly focusing in reducing physical and time waste, the company is looking to implement personalized blockchain technologies into all aspects of the logistics process.
Real-life use case: The company recently partnered with the Port of Rotterdam Authority to help them streamline their financial processes. By moving all financial processing to a blockchain, CargoLedger has helped to significantly reduce the Port of Rotterdam Authority’s processing costs for port dues. The company also installed smart labels that, once scanned, could immediately relay temperature, humidity level and state of the cargo in each container.