What is Blockchain Logistics? (Applications of Blockchain in the Logistics System)

08/15/2023 14:06 • AI & Tech Insights • 66 views

What is blockchain logistics? Logistics is one of the areas where blockchain technology is being implemented globally, but it is still in the early stages of development due to many existing issues in various industries.

For example, the pain points in the logistics industry are information asymmetry and lack of transparency, which are problems that blockchain technology can solve. So, what exactly causes this phenomenon? Today, I will analyze this topic in-depth from several aspects. First, let’s briefly summarize what blockchain is: supply chain, Internet of Things (IoT), big data, and artificial intelligence (AI). Let’s take a look at the progress in these three areas.

1. Supply Chain: Establish a record of the circulation of all goods and items on a chain through smart contracts.

2. Logistics: Manage every step of the transactions in the entire industry chain using automated technological processes.

3. Logistics: Implement multidimensional collaborative functions based on machine learning and algorithms. This process involves two main business sectors: transportation of goods and handling of information related to transporting goods. The most important aspect is tracking the status of goods, or tracing the process of goods. Another aspect is obtaining relevant data information from different sources, forming a distributed network system. Blockchain can provide security services for these aspects. Additionally, there are other application scenarios in the finance industry, such as supply chain management and insurtech. Therefore, in these three cases, we also need to understand what exactly blockchain logistics is.

2. Logistics: Utilize the tamper-proof nature of blockchain technology, allowing all parties involved to share relevant documents in a decentralized manner and trust each other. This can be achieved through invoices or notarization, as well as the reliable timestamp verification mechanism of blockchain, ensuring the uniqueness and immutability of each invoice. As each document’s authenticity is verified and proven publicly, making it impossible to forge, it ensures the reliability of the entire flow process.

For enterprises, blockchain is not particularly valuable, as one should never mistake “counterfeit currency” for genuine currency or junk bonds. But as a new asset type, is “real bitcoin” meaningless? If it is only used to replace gold, its practical use may not be significant.

So, how can blockchain help large entities in traditional businesses avoid risks? How can it improve efficiency and reduce costs? Let’s take a closer look at these four aspects:

1. Supply chain: Different complex product categories exist in supply chains, and various industries encounter complex tasks. For example, the occurrence of instability when chartering vehicles for business trips, or some companies not reimbursing customers, etc. Such reasons lead to a very chaotic organizational form of logistics, especially in order to avoid losses caused by duplicate work, a series of disputes, accidents, and other problems often arise.

2. “Logistics + E-commerce”: Traditional e-commerce platforms rely on a large number of orders, and it is difficult to guarantee receiving correct payment notifications for every shipment. However, with the increasing popularity and development of the Internet, more and more small and medium-sized enterprises are looking for suitable solutions for themselves. They not only need to bear the pressure in terms of logistics to meet the needs of cross-border trade but also need to handle more fund flows, eventually becoming an important part of the logistics industry.

Applications of Blockchain in the Logistics System

According to coincryptorama, the use of blockchain technology in supply chain management is becoming more widespread in the logistics system. From car manufacturers to transportation companies, agent banks, and financial institutions, these giants are actively developing their own solutions based on distributed ledger technology. It is reported that more than 20 companies worldwide have already started using this technology to improve their business processes. Blockchain can be used to record the entire lifecycle of goods without relying on third-party intermediaries, thereby eliminating trust issues.

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What is Blockchain Logistics? (Applications of Blockchain in the Logistics System)

Applications of Blockchain in the Logistics System

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