How Blockchain Technology Impacts Cargo Shipping Services
How Blockchain Is Changing the Face of Trucking, Logistics and Tracking System
Best known as the technology behind cryptocurrencies like bitcoin, ether, and alike, blockchain uses distributed data storage technology in line with first-class data encryption to record transactions, protecting from malicious revisions, deletion, disputes, etc. Blockchain has multipurpose implications for the way the products are being transported and delivered. Blockchain, with the help of innovations in AI and IoT, can be particularly useful for capacity monitoring. Blockchain-based smart contracts can automate trigger actions such as payment of invoices, thereby eliminating hundreds of man-hours spent reconciling documents. And with issues such as crypto stability presenting real challenges for crypto payments, stable coins (which can be easily acquired at any online crypto exchange, for instance, Switchere or alike) can help solve payment value instability problems.
Permission-Based VS. Permissionless Blockchains
The prevailing majority of the blockchain solutions in logistics and container shipping use closed, permission-based blockchain ecosystems to limit access to a closed network. This type of solution is being widely used for various purposes in the fintech sector, where it is necessary to request permission from the owner before joining the blockchain network. On the contrary, permissionless blockchains like Bitcoin are open and transparent. Presently, there are very few use cases of permissionless blockchains within the logistics industry. Nevertheless, the most common challenges in logistics are multi-stage supply chains and a lack of transparency.
Improved Shipping Process Efficiency
By deploying the distributed ledger technologies, the first thing that will enhance in logistics is the shipping and freight. Case in point, it can be used to level up the delivery process both internationally and locally. Successful blockchain implementation allows for reliable, immutable data storage and transparent access to it. Supply chain management and logistics can benefit blockchain to track order status in real-time, generate bills for payees and payers, whereas AI can entirely replace dispatchers and automatically distributes orders. Besides adding visibility and predictability to logistics operations, it can fundamentally speed up the physical flow of goods.
Blockchain Impediments in Cargo Shipping
In many cases, blockchain implementation may be challenging due to a fragmented value chain, absent common implementation of technical standards, and complex international regulatory requirements. Some of the milestones are described below.
If the cargo shipment is international (overseas), it becomes more complex due to the entry of more entities in the workflow.
Blockchain Integration into Existing IT Ecosystem
The full-cycle blockchain system integration can take up a significant bulk of time and I oftentimes challenging to re-master the existing IT infrastructure.
Versatile Data Storage Models
Different companies introduce and manage different data models to collaborate on the blockchain, thus the implementation stages can be rather time-consuming.
In summary, the logistics companies that play a role in the global supply chain are obliged to recognize the full potential of DLT to accelerate the inventory tracking, transparency, and time for delivery.
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