As demand for transparency and the complexity of supply chains increase, it’s important to find an effective way to track materials and processes that contribute to the finished product to build trust with consumers who are increasingly environmentally and socially aware.
Blockchain can be used to improve transparency and traceability of goods along the entire supply chain, from raw materials to finished products.
Blockchain represents a technological breakthrough ideal for improving logistics, transportation, and the entire supply chain, but how have things gone so far?
Today, blockchain is a mature technology from a technical standpoint, but not yet from a social and application standpoint; many companies are experimenting with real-world applications, in many cases still as concepts or trials, but there are also definitive builds that are in production and delivering the expected benefits of this technology.
In the current context, the pandemic is strongly slowing down the sector with delays in the delivery of goods due to continuous stops caused by local quarantines and lockdowns; in this context, the adoption of fully automated processes would have helped a lot.
By using well-developed smart contracts, many operations can be executed quickly, such as waiting for documents related to customs clearance.
In general, the main advantages of using blockchain technology are transparency, speed, traceability, efficiency, and reliability in payments. But what is the current situation among logistics players? Let’s take a look.
Unfortunately, only 5% of companies in the industry have developed real blockchain applications.
Let’s discover what the major obstacles are that still hinder its adoption. Surely, not yet having tested and well-defined protocols and use cases; as mentioned earlier, many companies that have decided to adopt the technology based on distributed ledgers are still testing its effectiveness. This implies cost uncertainty, and in the current pandemic scenario, it is a decidedly determining factor.
Another important key is surely the complexity of the sector, which involves the continuous exchange of data between tools that are totally different from each other, from tiny IoT sensors to huge container ships with hundreds of devices connected in real-time; this also reflects on the panorama of stakeholders involved, from large multinational companies (which have nevertheless initiated pilot projects internally that involve the use of blockchain), to small and medium-sized enterprises of different nationalities, to various institutional entities such as port and customs authorities.
It is, therefore, a very heterogeneous universe where defining standards accepted and shared by everyone is enormously complicated; it is also necessary to consider the existence of different types of blockchains (public, private, hybrid) that are characterized by different features and functionalities.
It is very difficult to imagine having a standard that can be universally applied soon; probably every reality will find the solution that best suits its needs. As soon as companies’ blockchain readiness increases, we will surely have a great advantage in the entire global logistics chain, both for companies and consumers.
Mollicone Antonio
Business Developer @ OYB
References:
1 Global Liner Performance, Sea Intelligence, Novembre 2021.
2 Connected and Autonomous Supply Chain Ecosystem 2025, PWC, 2020.
3 Using Blockchain to drive supply chain innovation, Deloitte, 2017.
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