Shipping and logistics can become faster with automation and smarter with Blockchain.
Shipping and logistics, Supply chain, today have become an indispensable industry in the global market. Consisting of loads of processes, payments, invoices,geographical locations, executions and so much more, it’s the need of the hour that these mechanisms become smarter. However conventional shipping and logistics processes are broken in multiple ways, do not promise transparency, security and involve a huge amount. This makes the systemless trustworthy. Various companies involved in the entire shipping and logistics mechanisms are still aren’t digitalized and hence they increase the chance of counterfeiting and fraud.
Blockchain’s ability to record and timestamp various events and make progress in the processes only when the authorized peers in the smart contract make it happen, assures a highly transparent, secure and smarter system. Moreover all the events or processes are verified with the aid of automation involving IoT and AI. Blokchain will help the shipping and logistics grow in a better way, in the global market in the coming time.
Some of the major Issues in Shipping and Logistics sector in the conventional system
It’s impossible to trace how and where the products are processed through, without the aid of IoT and automation. Hence the conventional system has a high risk of low transparency.
Transactional history and relative details often go unrecorded in the current system. It becomes a cumbersome process to audit such systems and bring out an accuracy in the auditing and accounting process.
Centrally controlled systems
Centralised system is an unnecessary and risky dependency and lack of backup always creates issues in the times of data loss.
Conventional paper based and non-automated systems are vulnerable and risky in terms of fraud and counterfeiting.
High cost and time involved
Shipping and logistics involve a lot of third party agencies doing huge tasks involved in the SCM. It not only increases the costs incurred but also the time involved in the process executions.
High dependability on the central system
For the access and authorization of any available information, there involves a lot of time, as there is dependency on the central system. This leads to overall low productivity.
Partners involved in Smart Contract for Shipping and Logistics
A blockchain system promises immutability, and the smart contact partners play a major role here. The record is verified and validated by the authorized partner and is only then processed for further activities. This eliminates the need for a centralized system and the risk of facing challenges that come along in the centralized system.
The partners involved in the shipping and logistics blockchain smart contract are manufacturers, suppliers, warehouse partners, logistics companies, related consignees, related vendors,financial institutions and consumers.
The interesting part about blockchain is that the framework of the working mechanism of blockchain can be altered according to the requirement of the business. Thus customizable models are easier to handle, more efficient and makes blockchain the best technology to work with.
How Blockchain can help overcome the issues and improvise the system
Secure, Flexible and Transparent
Every transaction and its history gets recorded along with a timestamp in the blockchain ledger.It reduces the risk of insecure deals,making the system more secure,flexible and transparent.
Decentralized Automated operations
There is no central system dependency and the processes are automated and digitised with the aid of IoT, AI and blockchain.
Blockchain helps improve the auditability and traceability of the system to a higher level. Also the elimination of middlemen,reduces costs and time involved. This surely makes the shipping and logistics mechanism efficient and reliable.
Better Inventory Tracking
The warehouses’ storage and inventory tracking can be taken care of by IoT and digital devices communication, which reflects in the immutable blockchain ledger. It helps tracking the inventory easily and in better ways.
Improved invoicing and payments
Faster payments and micropayments, easy verification and management of invoicing and audit are also one of the significant features that blockchain brings along, helping the shipping and logistics industry achieve their goals easier, faster and better.