BLOCKCHAIN IN FREIGHT FORWARDING – IS IT THE NEXT BIG THING?
Supply chain involves procurement, creating orders, packing, shipping and distribution of goods, etc., which in itself is a complex process. Depending on the product, the supply chain can go into hundreds of stages, to multiple locations across the world, a horde of invoices and payments and inclusion of many people and businesses, and delivery may even be spread to a few months. Well, with so much complexity, one would certainly require a reliable and transparent source to carry such enormous data and activities. This is where Blockchain is ready to transform the way the supply chain and logistics industry works.
The application of blockchain was first started with cryptocurrency ‘Bitcoin’ and now it’s spearheading to other businesses. As said by Jon-Amerin Vorabutra, VP of Process and Technology at Nova Molecular Technologies “The technology behind the digital asset and payment system Bitcoin – has the potential to transform the supply chain”.
Blockchain is a distributed database that contains records of events in continuity which can be assessed and inspected by users. Additional data can be included, however, no modification or deletion can be made leading to unforgeable data. Basically, blockchain is a record-keeping mechanism which makes business easy and safe on the internet by increasing transparency and providing end-to-end visibility from order to warehousing to delivery to payment.
How will blockchain impact freight forwarding?
Each time cargo is shipped, the transaction is documented, creating a permanent history of the shipment from order to delivery.
Transparent & secure
The blockchain database is transparent and secure which makes payment process and settlement order easily accessible across different ledgers. The tracking of purchase orders, modification of orders, receipts, shipment notifications becomes simpler. Anyone from anywhere at any time can access the decentralized information over the internet.
Eradication of fraud
The transactions involved in the shipment are easily accessible to everyone on the network and it cannot be altered, resulting in the elimination of fraud. With a host of transaction benefits, blockchain also allows real-time rerouting when it’s combined with traffic or weather data.
Availability of past records
With all the information available in blockchain, any person who participates in the transaction will be able to view the past performances. The sharing of information on the manufacturing process, assembly, delivery with vendors and suppliers becomes transparent and efficient.
With the new technology, blockchain, it is possible for purchasing agents or consumer to know from where products are procured and what it takes to transport it. It becomes easier for companies and individuals to bring in ethical procurement practices in place.
Because of the enormous benefits of blockchain, the freight forwarders like us 20Cube are busy finding ways to capitalize on this new technology to channelize profits and reinforce relationships across the supply chain. Even though there are challenges connected with the implementation of blockchain, but with more companies start using it, the more testimony of successful utilization will be seen.