Samsung is joining a number of other companies in exploring the idea of using blockchain logistics to streamline global supply chains. It is reported that the tech giant has already begun developing a distributed ledger system to monitor international shipments.
Recently, IBM has teamed up with Danish shipping giant Maersk and India’s JM Baxi, in order to digitalize their import and export process with blockchain.
Energy is one of the most frequently traded resources and the implementation of a more efficient system has captivated market leaders. BP was testing a gas trading platform, while E.ON and Enel, have also experimented with similar energy trading platforms.
Sinochem, one of China’s main oil companies, used blockchain to monitor and store data on a shipment of gasoline to Singapore.
Issues surrounding current logistics
The top 20 exporters of containerized cargo transport a total of around 127.6 million fully-loaded TEUs (twenty-foot equivalent unit) globally a year. Countries with a higher level of human intervention can take up to 11 days to process logistics. OECD countries have managed to reduce this to about 9 hours but the process is still prone to human error.
Fraudulent goods are worth USD 1.4 trillion globally and tax avoidance continues to be an issue. Not only does this affect profits but health depending on the type of product and its use. There is a growing concern among consumers about imitations and problems with verifying the authenticity of a product.
Documentation can be held up or lost by middlemen, resulting in perishable goods being stuck in transit. This can end up costing up to a fifth of the total transportation costs as well as the price of the goods.
Benefits of blockchain logistics
Blockchain is set to help shippers, ports, customs offices and many other parties in the global supply chain by replacing paperwork with irrefutable digital records.
Blockchain could provide proof of provenance for goods by tracking them globally from the manufactures. Import details, fees, and taxes could all be programmed into smart contracts that release payments automatically once the conditions where met. Customers will see an improvement in services as the overall speed of the processes increase. Tracking will include improved shipment data with timestamps and data being instantly accessible through a ledger.
Blockchain will benefit logistics by providing enhanced security and vendor management, as well as preventing the loss of goods.