Digital impulse — for real movement
Blockchain-based logistics solutions. Part 2
Specific tasks in cargo transportation
The digital ledger allows for the elimination of discrepancies in documentation. To do this, we will take a closer look at the process of delivering cargo using the blockchain.
The consignee sets out the necessary requirements for the documents, after which the shipper uploads them to the online storage, as a result of which a pointer to the place of their storage appears in the distributed data register. All participants in this process, through special software, at each stage of cargo transportation, reflect all operations performed in the blockchain.
Subsequently, a customs officer, warehouse or consignee, using his unique signature, confirms the fact of delivery of the goods to the appropriate place. Each of the participants in this process has a private key that allows identification of the respective senders and recipients. In this case, the signature and the key are encrypted — as a result, all information from the cargo delivery process is reflected in the blockchain.
Further, for example, for various reasons, the consignee and the carrier may interpret the time of delivery of goods differently. In turn, this is reflected in the indicator of the timeliness of the implementation of this operation (on-time delivery) and is fraught with corresponding consequences for counterparties. However, the use of blockchain gives all participants in the supply chain access to a single version of shipping documents.
In addition, it must be taken into account that the data exchange is written to the corresponding blocks, which cannot be changed or canceled. Therefore, in the event of a disagreement between the parties, they are easily resolved. Blockchain provides end-to-end tracking of cargo status.
So, if we consider the situation with respect to supply chains, then the blocks can include information about a product, manufacturer, packaging, about the features of transportation, distribution, etc. In the course of the process, the corresponding blocks of data are embedded in the blockchain, connecting with each other. Therefore, a unique identifier is generated for each cargo, which makes it possible to track its status and prevents the possibility of data changes retroactively.
Through the blockchain, you can both store and exchange digital documents. In turn, this provides the ability to create smart-contracts that can be widely used, including in logistics.
Smart-contracts allow you to manage bills and payments as they provide automatic billing and payments. It is important that in this case the need for intermediaries disappears, their reliability, accuracy, etc. is ensured.
Blockchain can also be used to combat counterfeit products and thereby protect international supply chains. For example, to purchase a particular product, the buyer can use a special application installed on the smartphone and scan the digital code indicated on the packaging of the products he is interested in.
Through such an application, the code will be decrypted and the validity of the blockchain used for this package will be checked. As a result, the buyer will be provided with information about the authenticity of the purchased product. At the same time, information about its sale will also be entered into the blockchain to exclude the possibility of re-using this digital code in order to sell counterfeit products.
Efficiency, reliability, stability
Let’s consider the main advantages of implementing this technology for processing and storing data. First of all, security should be noted, since the blockchain is decentralized and cryptographically secure, and also records information about all operations performed. This feature eliminates the need for a trusting relationship between participants, and does not require regulators to exchange information.
In addition, the absence of centralized intermediaries allows you to reduce the cost of operations and reduce the cost of maintaining the appropriate infrastructure. For example, in this regard, McLagan and Wirex analyzed the operating expenses of 50 banking organizations, resulting in a number of conclusions.
In particular, optimizing data quality, ensuring a higher level of transparency and internal regulation have reduced the cost of financial reporting by 70%. Simplifying the reconciliation of financial transactions has resulted in cost savings of 30–50%.
What’s more, by making it easier to share customer data, the cost of centralized operations has been cut in half.
Thus, blockchain is an important achievement of our time, the scope of which is constantly expanding. If initially this technology was used in the field of cryptocurrencies, today it is starting to be used in various industries, including logistics. The caution in using the blockchain is due to the need to further study the risks of its functioning and the peculiarities of adaptation in the conditions of the national economy.
Today in the world, blockchain has found its application mainly in the financial sector. So, on its basis, a register of bank guarantees functions, accumulating and providing information on issued bank guarantees and servicing the provision of new guarantees.
In addition, on the basis of blockchain technology, registers of transactions with stage securities are created, through which reports on completed transactions are compiled.
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