Implementing Blockchain Technology in Business
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The world is run by trade. Freight and logistics in the U. The industry, however, is not prepared for growth, as it currently sits on top of a crumbling infrastructure prone to systematic inefficiencies and rampant fraud. Countless intermediaries rake in fees and drive up the price of shipping. The problem is that blockchain technology applications international corporation complexity and opaqueness of the process make blockchain technology applications international corporation difficult to put checks and balances in place.
In effect, cargo theft can cost consumers up to 20 percent more for their goods. Innovative startups, as well as major incumbent parties, are investing enormous amounts of time and resources in blockchain development.
The alliance hopes to spur standards development for the shipping industry as a whole by implementing a secure blockchain system. Why is UPS, along with hundreds of other major companies, betting on blockchain?
They want to be a part of the revolution. They want to play an instrumental role in developing the smart logistics network of the future.
The main appeal of blockchain technology lies in its ability to create blockchain technology applications international corporation and immutable ledgers — networks that have no single point of failure, are maintained by multiple parties and whose information cannot be hacked or corrupted. This increases the security and transparency of all information that is stored on a blockchain across the life cycle of a transaction. The freight and logistics industry incorporates a large number of brokers and significant amounts of hidden information across complex supply chains.
No single party can access all aspects of the chain. Currently, the freight and logistics industry is heavily controlled by freight brokers, which exist to facilitate transactions of loads from shippers to carriers. Brokers seek out loads, tag on a markup, then sell it to carriers.
This not only increases costs for carriers, it also leads to increases in downstream prices that directly affect consumers. The lack of efficiency, transparency and security across the global networks is precisely the problem blockchain technology is designed to solve. Blockchain, if adequately leveraged, will give customers the opportunity to participate in a freer, more transparent global trade, and potentially limit the need for brokers and blockchain technology applications international corporation intermediary costs.
The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders.
One effective way transparency and efficiency can be increased is by leveraging smart contracts, the core innovation behind the Ethereum blockchain. Smart contracts are essentially self-executing contracts that are fulfilled when predefined stipulations are met.
This is particularly useful when it comes to increasing the efficiency of blockchain technology applications international corporation escrow by removing or limiting the intermediaries involved, and therefore bypassing the markups they post. Blockchain also can increase the tracking and transparency of the supply chain. Shippers can gain more visibility across their supply chain and communicate important blockchain technology applications international corporation such as loads, geo-waypoints and basic compliance information with carriers.
Once a shipment is confirmed and recorded on the blockchain, it is immutable, meaning no party can dispute the validity of the transaction or fraudulently manipulate the records. Once transactions are logged, smart contracts can then release any payments in escrow instantaneously, limiting the time and costs associated with intermediary processing.
Given the nascent nature of blockchain technology, corporations and consortia around the globe are starting to invest in and partner with startups that are building proofs of concept in order to test solutions prior to commercialization.
The company, which is part of BiTA, is building a fully integrated supply chain management system that gives insight into each stage of the logistics process. In addition, the company aims to create a decentralized brokerage system — essentially an open marketplace for shippers and carriers. Leveraging the transparency of information on the blockchain, the marketplace will let shippers optimize blockchain technology applications international corporation and time for every shipment. In other words, shippers can track the capacity, cost and estimated delivery times for different routes for a given shipment before making a decision on the marketplace.
At the same time, carriers can continually post information about their capacity for shipping vehicles and lanes, thereby dynamically adjusting the fairest pricing based on supply and demand.
The transparency and efficiency afforded by the blockchain benefits all parties by allocating resources in the most effective way without artificial markups by rent-seeking brokers. This increase in visibility throughout the process will dramatically decrease the theft and hacking that plagues the industry. Inherent to blockchain technology is the ability to create a decentralized, encrypted ledger that logs all of the critical transport data.
This log is immutable to hackers, as no one has the ability to change or delete crucial information. While the premise of blockchain technology applications international corporation is promising for an industry rife with inefficiency, the technology is still very much in its early days. As of now, a shipment from East Africa to Europe could require approvals from as many as 30 different parties.
Many of these interactions happen not just between shippers and carriers, but also between regulators, retailers, wholesalers and even customers. For blockchain technology applications international corporation global shipping blockchain network to function effectively, participation is needed from all blockchain technology applications international corporation. The future of logistics and freighting will be heavily dependent on blockchain.
Even though shippers around the globe have existing means of tracking shipping containers, and detractors of blockchain may argue that completely revamping tracking for the freighting industry will be too massive an undertaking, industry leaders are already recognizing the potential of using blockchain to track supply chains.
Deep Patel is a serial entrepreneur, marketer and the author of A Paperboy's Fable: The 11 Principles of Success.
