A Century ago, supply chains and logistics were easily manageable. The commerce was generally localized and were handled by a few number of legal boards. Today, population, businesses, commodities grew exponentially and commerce has grown incredibly complex. We are technologically advanced now and implemented them to facilitate the globalized economic exchange.
Today, we have all the key players required for smooth transition of courier industry:
- Transportation: Cargo planes, truck drivers, railways, container vessels
- Enterprise players: Retail, manufacturers and suppliers
- Middlemen: Brokers, freight forwarders and other third parties
- Ancillary players: Financiers, insurance, regulators
Yet, there are a multitude of issues when it comes to trust and time. If you’re moving commodities across borders, there are many countries operating electronically. But there are a number of countries that still relies on paper works and manual protocols. Many of them have isolated software. They all have their centralized solutions but not effectively communicating with each other. This creates a lack of trust as any bad player can potentially harm your business. With several entities involved, invoicing and payment processes consume a lot of time. These problems are quite prevalent in the supply chain.
It’s really important all the players interact with each other and achieve end to end exchange of information in a secure manner. And therefore, blockchain is the need of the hour.
Blockchain is a cloud-based distributed ledger that provides an immutable record of transactions. Its decentralized platform provides a single source of truth that everybody can trust. Though transaction of information is shared on public ledger, the information can only be accessed by players involved. The data flows in encrypted form that can only be unlocked with private key.
The goal is to facilitate transparent information flow and solve the biggest issues of courier service industry. One of the benefits is that it eliminates a significant amount of middlemen that take a big chunk from your pie. Not only SMEs, customers also have to pay unnecessary fees.
Blockchain technology features new governance and economic models. It combines smart contracts and IoT. Smart contract is a coded agreement that automates the actions on blockchain. That means, it executes payments only if certain condition is met, also called ‘if-then’ principle.
Secondly, it features Internet of Things solutions that connects blockchain to the real world. Technologies such as RFID tags, NFC chips and QR codes are used. RFID chips helps transmit information in the radio waves, for example, in contactless credit cards. NFC works similarly (in smartphones). During packaging at warehouse, QR code is generated which helps to record time of shipping. In case of perishable food items, IoT sensors help to monitor the temperature conditions around the package.
As blockchain network is immutable, fraud is easy to detect. This has immense potential for pharmaceuticals, clothing and luxury goods as they suffer a lot from counterfeits. So, blockchain can closely monitor their logistics activities and extend beyond the confines of e-commerce industry.
Although blockchain is nascent, many businesses have started implementing the technology. Blockchain holds a promising future for courier industry as it will enable us to closely follow the shipment lifecycle that never existed before.