What is blockchain technology?
You may be familiar with blockchain technology as a security solution for Bitcoin, but the core of its software is used across multiple industries (including shipping) on a daily basis. To get technical, blockchain technology is a peer-to-peer network within the internet that manages a time-stamped series of recorded data. Harvard Business Review defines blockchain as an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable, permanent way.
Translation: Blockchain is a transparent record of transactions that anyone within the network can see and track in real-time – unaltered. Because these data records cannot be tampered with or edited, they provide the ledger security against fraudulent activity.
What does blockchain technology track?
Blockchain ledgers track every transaction that occurs during an exchange, without the need of third-party entities or ownership. Each transaction is another “block” on the ledger – hence the name. In this digital world, these blocks are embedded within the ledger, where they’re protected from revision, deletion, tampering, or alteration.
These ledgers are accessible to all interested parties within the exchange – individuals, organizations, and operating systems have access to relevant information to enhance the efficiency in the supply chain.
Take LTL carriers for example (one of the largest users of this technology) and how they use blockchain to their advantage, in particular, for food-related commerce from harvest to consumer. Blockchain allows accurate tracing of food products. It ensures maximum quality and the reduction of foodborne illness by following proper cold chain procedures.
Blockchain technology goes beyond what traditional tracking numbers provide; giving a full breakdown of data points to track the products through every step of the supply chain. This includes:
- Who has control over the product at any given point in time
- When it left manufacturing/production
- The transfer of the asset (whether it’s via trucks, containers, pallets, parcels, etc.)
- Persons/Businesses that sign for/are responsible for the asset during each transfer
- Time-stamped entries for each transaction
- Every block on the ledger is digitally annotated for the date and final time
- Prediction for date/time of delivery to the end-user
- Organization of operational documentation for all shipping details
- Purchase orders
- Shipment records
- Alterations to shipping points
- Serial/product numbers
Blockchain allows you to see everything that’s happening with the product to ensure expectations are met throughout the supply chain. We call this ‘cradle to grave’ chain of custody – tracking that protects against fraud, loss, or damaged products.
What do parcel shippers need to know about blockchain?
Along with LTL carriers, many companies are hastily jumping on the blockchain bandwagon to track their products throughout their complex supply chain. Storing these data points allows shippers the ease to look back and monitor their supply chain, find cracks or areas of improvement, and ensure quality is maintained throughout. And because these blockchain transactions are verified by multiple junctions, errors reduce, fraud is less likely, and chain of custody is easily followed.
Blockchain also offers parcel shippers a decentralized source of record to avoid dependence on a single piece of tracking technology. Think of tracking numbers that carriers and consumers receive when they’re shipping a package – what if that carrier is down and you can’t see where your shipment is or where it’s been? That’s where blockchain comes in. It allows shippers to monitor, verify, and conclude all transactions within the ledger without a third party – saving time and pennies.
And since blockchain technology is digital, it’s always accessible. No more waiting around for days on end, or even hours, to confirm each transaction; it’s immediate and convenient.
In sum, the accuracy of transactions, independence from third-party intermediaries, beefed-up security, and efficiency elements make blockchain technology a no-brainer for shippers to look into for supply chain optimization.
Benefits of blockchain for shippers – they can:
- Optimize the supply chain
- Digital ledgers can highlight delays within your supply chain and shipping network
- Can optimize operations based on data – shippers can see if there are bottlenecks to look into
- Enhance customer experience and trust
- Improve traceability of transactions
- Open source of record keeping
- Complete visibility
- Heighten communication and transparency along the supply chain
- Reduce shipping costs
- Strengthen security against fraud
- Shorten last mile delivery speeds
- Create fixed/permanent distributed ledgers
What’s the future of blockchain for parcel shippers?
Blockchain technology goes beyond the tracking number, where everyone can see the efficiency of the shipping process – giving shippers a clear view into how to enhance operations with their data. This enhanced transparency and visibility into the supply chain has the potential to positively change the parcel industry and bring new opportunities to manage shipping, and beyond.
Blockchain goes further than just parcel shipping – it WILL be applicable to every facet of life, creating an open-source record of truth.
Any parcel shipper looking to enhance their transparency, increase consumer confidence and trust, and traceability within their shipping operations – it’s time to dive into your data and see if blockchain technology makes sense for your business. And Sifted can do the diving on your behalf. Let’s get your supply chain on track for maximum success, see what your data is telling you.