BLOCKCHAIN
Is Blockchain the New Internet?
Evolving beyond its association with bitcoin, blockchain and other distributed ledger technologies can remove significant layers of complexity from global supply chains. It can facilitate greater trust and transparency between supply chain stakeholders, supporting the automation of administrative and commercial processes. Smart contract concepts will also create opportunities for new services and business models in logistics.
Key Developments & Implications
Blockchain is a nascent technology which at its core represents a fundamental shift from a centralized to a decentralized and distributed database system. By sharing information on a blockchain-based system, the technology can support collaboration and transparency in the highly fragmented logistics industry. The greatest application area lies in global trade, where solutions that reduce supply chain trade barriers can increase global GDP by nearly 5% and global trade by 15%. Looking ahead, industry adoption, governance of standards, and interoperability will be critical to the success of this technology in enterprise applications.
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Faster and leaner logistics in global trade using a common blockchain-based system creates transparency for all supply chain parties as they can view progress of goods, status of customs documents, and other data (e.g., Maersk/IBM joint venture). Key trade documents such as the bill of lading can be digitalized with participants issuing, transferring, and receiving the original document through a blockchain network (e.g., ZIM e-bill of lading). Industry-wide adoption will have significant impact, reducing delay, fraud, and costs across the supply chain.
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Improving traceability and transparency of goods across the supply chain, from point of origin to last-life will be possible with blockchain technology. Several initiatives are monitoring goods provenance, from how they were made to how they are being managed. This data is stored permanently and shared across decentralized networks, enabling comprehensive track-and-trace beyond current capabilities. Users can verify if products are authentic or have met handling requirements (e.g., Walmart pilot on food tracking).
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Automating commercial processes with blockchain-based smart contracts can greatly enhance payment times and reduce invoicing errors through instantaneous payment once agreed conditions are met (e.g., initiating payment as soon as a pallet arrives at the right location). A key application area in future will be machine-to-machine payments (e.g., IoTA).
Topics Covered in the Report
- Understanding blockchain
- Blockchain examples across industries
- Blockchain in logistics
Talk to an Expert
Gina Chung
Head of Innovation
Americas and Trend Research, DHL
Gina Chung leads the research and innovation activities of DHL and is in charge of the DHL Americas Innovation Center: a state-of-the-art platform to engage startups and industries on the future of logistics. Since 2012, she has shaped DHL’s global innovation agenda by driving a portfolio of projects focused on the rapid testing and adoption of technologies such as collaborative robotics and artificial intelligence across DHL’s operations. Prior to her current role, she also led the development of DHL’s trend research series including co-authoring publications such as IoT in Logistics together with Cisco and the DHL Logistics Trend Radar. Gina is based in Chicago and holds two degrees from the University of Auckland.