Blockchain technology has potential to save millions of dollars for the world’s transport and logistics companies.
As a means of creating secure, tamper-proof records in real time, blockchain technology is attracting the attention of the transport and logistics industry. The ability for every member of a supply chain to associate the correct documentation with goods and track their progress from supplier to customer should not only cut costs and reduce errors but also bring transparency to transactions for all parties. People at the forefront of these developments say the arrival of blockchain is likely to be as transformative for the freight industry as the advent of containerisation was in the 1960s.
The world’s leading consortium for testing blockchain technology is the US-based Blockchain in Transport Alliance (BiTA), with more than 230 members, bringing together freight and logistics operators with other stakeholders in transport, finance and technology.
In Europe, Danish shipping container line Maersk and German-owned parcel delivery service Deutsche Post DHL Group are testing blockchain in ‘real life’ operations. Likewise, PLM, a provider of refrigerated food delivery services has set up a blockchain supply chain delivery service and GE Transportation is prototyping a blockchain service for better managing and monitoring the transportation technology it supplies to its customers worldwide.
This article takes a look at blockchain technology, its applications, benefits and obstacles to adoption in the transport sector.
To understand the applications and implementation details of blockchain, it is necessary to understand its fundamental principles, architecture, types and components. This level of detail is currently being explored by pioneers, but a skeletal outline for non-practitioners can be seen in the diagrams later in this article.
Oxford Internet Institute defines blockchain a shared digital ledger including a list of connected blocks stored on a decentralised distributed network that is secured through cryptography. Each block contains encrypted information and hashed pointers to a previous block, making it difficult to alter without changing the entire chain and the replicas within the peer network. This means the blocks of information are authenticated by peers on the network, providing trustworthiness and thus preventing malicious activity and policy violations. Cryptography and membership functions provide easy data sharing between parties without privacy breach and vulnerability of tampering of records. All confirmed transactions are time-stamped to provide full record provenance.