What Are The Aspects Of The Application Of Blockchain Technology In The Logistics Supply Chain?

What are the aspects of the application of blockchain technology in the logistics supply chain
What are the aspects of the application of blockchain technology in the logistics supply chain

Blockchain Applications In Supply Chain Logistics

Blockchain Applications In Supply Chain Logistics
Blockchain Applications In Supply Chain Logistics

Suppose that a brand-new age of high-quality and reasonably priced supply chain logistics technology begins in the next ten years. In the near future, it’s possible that no supply chain operations will be supervised by various third parties. This is already possible with supply chain blockchain, a decentralized technology that can simplify logistical operations.
Over 55.3% of companies offering logistics services have already made investments in blockchain-related logistics research.

These numbers show that innovation will be actively sought in the near future, but there is still a large amount of potential for market growth. How can blockchain logistics firms apply the tech to their supply chains, or maybe create advanced technologies that might have an effect on the entire business? In this article, we’ll discuss practical blockchain applications in supply chain logistics

Blockchain No-Middlemen Supply Chain

Blockchain No-Middlemen Supply Chain
Blockchain No-Middlemen Supply Chain

The term “blockchain” refers to a distributed ledger that immutably records data transactions. Blockchain enables direct database sharing between all parties, eliminating the need for middlemen in transaction verification. The blockchain history is stored in the network permanently; it cannot be changed or removed. By itself, this makes supply chain and blockchain the ideal match for enhancing logistical transparency.

A decentralized data storage system is blockchain. Data is shared among all connected devices rather than being stored in server farms. The task of data storage is shared by many parties. All devices would need to be offline for the network to be down, which is highly unlikely.

Four Main Characteristics

There are four main characteristics of the blockchain in supply chain logistics, let’s talk about them:

Cryptographic Protected: Every transaction on the blockchain is protected by a layer of cryptography. The transactions are verified using the public and private keys that each user owns. All users of the network can view the public key, but only the user may see and use the private key, which is used for self-identification.

Accuracy: All devices connected to the blockchain network verify the data that is stored there. A majority vote is required for a transaction to go through. After every transaction, the blockchain automatically updates, giving users access to accurate real-time data.

Data Management: Blockchain keys can be used to trace an object’s history. Assets maintain their past on the blockchain. You will be aware of every user who interacted with a blockchain transaction as well as its whole history if you have received one.

Easy and Fast: Contract terms in blockchain-based agreements are written in code. No legal or regulatory mediation is necessary because the agreement is immediately executed as soon as the prerequisites are satisfied. Once a contract has been transformed into a smart contract, the conditions cannot be changed, which speeds up and simplifies partnership agreements.

Improved Security for Logistics

Improved Security for Logistics
Improved Security for Logistics

In their adoption of digitalization, supply chains are lagging behind other industries. New and quicker procedures are required for its reliability, monitoring, verification, and strategic planning. Documentation alone makes up approximately half of the cost of transportation for containers. Security for logistics might also need to be significantly improved. Electronics, pharmaceuticals, fashion, and other high-end industries are also frequent targets of copying. Let’s examine whether blockchain supply chain application examples can tackle these issues.

A unique version of Blockchain

Supply chain administration By giving each item a unique version, blockchain can assist manufacturers and logistics companies in locating missing or stolen goods. Each physical item can be converted to a digital version, and the two can be linked via a barcode. All parties involved in the supply chain will be informed of any changes to the product’s license, route, or location.

Thanks to Blockchain Technology

Global losses from online piracy in 2017 totaled more than $323 billion. All supply chain participants can access the history of items and their supplier’s thanks to blockchain technology. It is not possible to replace the original data on a product’s history because blockchain is an irreversible record. The licenses, documents, and place of manufacture of the original product would always be preserved in the decentralized database provided the manufacturer assigned it a special code.

Logistics Sector: Aggressively Competitive And Unique

The logistics sector is both aggressively competitive and unique. To provide a flawless service, international businesses must collaborate, and this raises numerous obstacles. Companies are unable to transparently update each other and synchronize their tracking systems, which causes delays. Blockchain technology enables tracking deliveries in decentralized databases. Every link in the chain has access to information about the status of a specific product at any point in the chain, including its specific location. Investors can view expenses, customs paperwork, and travel time. Because blockchain restricts modifying data that has already been entered into the system, all of this information is impenetrable.

What Prevents Businesses From Adopting Such A Useful Innovation?

What Prevents Businesses From Adopting Such A Useful Innovation
What Prevents Businesses From Adopting Such A Useful Innovation

Even though the technology has significant advantages for logistics and supply chain management, just a third of all suppliers are now using it. What prevents businesses from adopting such a useful innovation? Let’s talk about the top issues with supply chain blockchain implementation.

Unaware Of The Advantages

Immutable ledgers might be eagerly adopted by shipping companies, but suppliers are frequently unaware of the advantages this technology brings. Others may believe it’s too complicated, while others may be doubtful about the idea. Companies that handle logistics must show the platform’s obvious advantages. Each and every successful example offers partners benefits that are obvious: greater transparency, better product control, and more convenient paying. The worries of suppliers can be solved if logistics providers can effectively communicate this added value.

Blockchain Technology: Challenging To Understand

For those without extensive technical knowledge, the technology itself can be challenging to understand. It takes a lot of effort and studies to grasp the immutable ledgers’ internal structure, security procedures, and data algorithms.

Blockchain deployment is not supported

To manage their supply chains, the majority of logistics firms largely rely on enterprise resource planning software. Blockchain deployment is not supported by current solutions, and integration is not a priority when designing blockchain tools. The AWS blockchain-as-a-service platform, a backend website where businesses may deploy blockchain and combine it with current web and desktop applications, can, however, solve this problem.

Blockchain: Lack of Investments And Development

Blockchain Lack of Investments And Development
Blockchain Lack of Investments And Development

Many logistics companies have not yet adopted digital transformation, nor have they built an IT system that is capable of supporting blockchain. Therefore, creating the necessary framework for putting such a challenging invention into practice would require study, reorganization, development, and investments.

Businesses Aren’t Willing To Divulge Information

Blockchain suggests that all logistics information is shared among all network users. Suppliers and providers are cautious of transferring their data from their central storage, despite the fact that it is encrypted and protected by crypto keys. Also, their transactions and commute history would need to be made public; otherwise, the solution won’t be transparent. However, many businesses aren’t willing to divulge that much information.


Because blockchain technology delivers suppliers and logistics service providers equal transparency, cost reduction, and traceability, its advantages surpass its drawbacks in the implementation of supply chain and logistics technology. Enterprises and startups need an expert development team with strong knowledge of blockchain and logistics to grasp the impact of the technology and implement it in the system.

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