Shippers everywhere face an uncertain future. The constant threat of a trade war and increasing consumer demands have pushed existing operations to their breaking points. Customers want information and visibility at any given time, and any misstep in the supply chain could result in permanent losses to profitability, productivity, and efficiency. The situation leaves very little room for error, and unfortunately, to err is human.
Additionally, global trade scales are vulnerable to an impending digital documentation revolution, as noted by Kyunghee Park of Bloomberg.com. For shippers to stay competitive with big-box retailers like Walmart along with growing e-commerce vendors, they must think outside the box and cut costs wherever possible. Since documentation and paperwork make up a considerable portion of time lost in transport, shipping on the blockchain will revolutionize the industry and allow you to do more with less.
Challenges of Current Shipping Practices
The challenges of current shipping processes can be attributed to fundamental flaws in the way world trade operates. A shipment that is crossing international borders must go through customs, processing, container inspection, and approval. This can take days, if not weeks. This, in turn, contributes to delays. These delays can be in customers receiving a product, or for business-to-business (B2B) customers, it results in a cascading series of stock level impacts. The end result is that customers are not able to purchase what they want when they want due to stocking issues. And everyone knows that when the customer is unhappy, everyone is unhappy.
Shippers have a tendency to view shipping as a standalone process, but it is much more than that. Shipments must move through dozens of handlers to get from point A to point B. A single shipment of a perishable product could take up to a month to move across international locations and jurisdictions depending on distance, weather, and accuracy in documentation. When you think about all the players involved in a single shipment’s journey, it is really no wonder how often there are issues and inconsistencies in the supply chain.
The good news is that shipping on the blockchain will eliminate much of the hassle with poor visibility and paperwork. The bad news is that it presents new interoperability problems. Allow me to explain.
Many companies are developing their own blockchain-based shipping platforms using incorruptible distributed ledger technology. They see the benefits of jumping on the blockchain bandwagon, but because they are developing private blockchains, they are creating new issues.
In order for a blockchain solution to be effective for everyone, all systems must be able to communicate with each other. When a product moves in the supply chain, platforms must be able to communicate and interoperate. This means that differences in blockchain tracking platforms could have unintended consequences. In other words, it is not enough to merely implement blocking technology. Shippers must implement blockchain technology that can fit into the ecosystem with other parties in the supply chain, including end-users.
Blockchain technology holds great promise for transparency and accountability in logistics. As per Medium.com, transparency in the supply chain should record the full process of goods throughout the chain. Shippers who take advantage of blockchain can review the status of documents and charges incurred in real time. This enables new uses of data analytics and business intelligence tools to ensure data integrity and generate meaningful insights into shipping trends. Over here at ShipChain, we are working to unify track and trace to give shippers improved visibility into document status, data, and overall shipping activity.
Benefits of Shipping on the Blockchain
The benefits of implementing blockchain shipping resources and technologies are similar to the gains achieved when upgrading IT systems. With the movement toward software as a service (SaaS) platforms, deployment of blockchain technology is the next logical step. It eliminates many of the manual processes and complications associated with shipping and offers these key benefits:
- An added layer of transparency, which promotes visibility and reduces risk throughout the entire supply chain
- Increased accountability for all parties, reducing the risk of cargo theft and streamlining claims processing when problems arise
- End-to-end visibility through tracking and tracing, enabling shippers and customers to get real-time updates on product location and expected time of arrival
- Elimination of middleman markup for technologies and tools to track product, reducing overhead costs for shippers and carriers alike
- Aligning incentives of all parties involved in the supply chain, increasing collaboration and reducing costs along the way
Unlock the Potential of Your Team With Blockchain
Shipping on the blockchain is a multi-trillion opportunity. Everyone is taking an interest in the applications of this technology for improving traceability, visibility, accountability, and accuracy in shipping.