Blockchain technology and the 3PL industry

Third-party logistics businesses are getting more dependent on technology and smart solutions. You may be baffled with how to operate your record-keeping or perhaps how to secure your supply chain. Creating your own in-house system is costly, complex, and simply irrelevant. One of the best solutions now available is employing blockchain technology. This technology is globally known and said to vividly develop the supply chain industry. Even if you have not heard of blockchain, you most definitely have heard of Bitcoin. This, by the way, is the cryptocurrency that entirely operates on the so-called technology.

(Photo Unsplash @chuttersnap)

So, let us discover what blockchain is. How it coherently works, and why would you want to implement it in your business. Do not be threatened by how complicated it may look and operate! In reality, it is not as complex as it may seem. 

Imagine a chain of spheres connected to each other by thin pipes. The spheres are all the same – there are no biggest or more important ones. You cannot change a single sphere, as well as their order or quantity. When at least one sphere fills with anything (try to use water for your imagination), this anything immediately goes into all other spheres via the pipes. This is roughly what a blockchain looks like. 

Blockchain is the sort of database that securely stores data in blocks that are then chained together. In a real blockchain, the spheres from the above example are called blocks, and the pipes are cryptography. When new data comes in, the data then spreads into a block of the blockchain one by one, in strict order of the block, until each block has the data. Blockchains are often public, meaning that everyone equally has access to the information. At the same time, nobody can control or delete the data that already is in the system. In the case of Bitcoin, the transactions are permanently recorded and viewable to anyone.

 

“…The whole point of using a blockchain is to let people — in particular, people who don’t trust one another — share valuable data in a secure, tamperproof way…”

–  Massachusetts Institute of Technology Review

 

More and more companies and organisations (especially in 3PL Industry) begin to implement such database technology. No surprise here – this is by far a stunningly promising and revolutionary technology in the opinion of many. 

Not to make naked assertions, here are a couple of such companies that decided to implement blockchain technology in use. In 2016, an American best-known financial enterprise Visa introduced its new blockchain platform designed for dealing with business-to-business payment services. By the end of 2019, the company has covered 90 markets that various businesses could send payments to. 

Another great example is likewise from the United States. This is retail giant Walmart. The company soon designs the blockchain solution to improve their food safety and also to enhance the overall transparency of their supply chain. 

Blockchain is one of such technologies that is predicted to revolutionise and completely change many businesses and markets. The Third-party industry is not an exception. A lot of 3PL providers these days search for and employ blockchain technology partners. 

Here below you can see a short, yet comprehensive table of the pros and cons of using blockchain technology specifically for 3PL providers:

Advantages

Disadvantages

Outstanding Level of Security – impossibility to corrupt recordkeeping or to compromise data

Immutable Data – it may be seen as both positive and negative. Blockchain cannot go back as data is immutable and cannot be corrected or replaced

Removal of Unnecessary Intermediaries – no need to keep costly go-betweens (freight brokers, carriers, etc.) when the blockchain is implemented

Still Immature and Not Implemented Globally – this is a pretty young system and has a long way before it gets standardised and recognised

Convenient Record-Keeping – no necessity to exchange loads of documents and papers. A great simplicity of transferring info in contrast with traditional methods

Replacing or Adapting Existing Legacy Systems – it may be an issue for an enterprise

Not only companies, but their clients too benefit loads from blockchain technology usage. Mainly, consumers benefit from the transparency of the blockchain – they can purchase goods and services safely, with a very low risk of a company manipulating or sabotaging it. Blockchains allow customers to verify the whole life cycle of a commodity they have bought.  

Many say (and also you may now realise) that blockchain technology is rather a necessity than just a beneficial system to employ. It brings more profit to a company, more convenience to its workers, and better services to the clients. Many companies of different sizes and areas start to be customers of the blockchain vendors. Here is for you a little glance into the future – the market of blockchain supply systems is estimated to grow twice as much compared to now – up to 3,272 million USD by 2026! And it is in accordance with these, rough for the global economy, coronavirus times. 

Speaking of the virus, it may be astonishing that, in the opinions of some economists and IT experts, a blockchain implementation is a wholesome tool for many establishments, medium, and small businesses. The tool that actually, with no exaggerating here, is capable of helping with this whole COVID-19 pandemic and its consequences. Specifically, in the healthcare area, usage of blockchains can help control the pandemic by:

  • Early detection of outbreaks 

  • Fast-tracking drug delivery 

  • Protecting user privacy during treatment.

Let alone other, non-medical spheres. Especially in Third-Party Logistics Businesses, this technology definitely “makes waves”. The blockchain has many benefits and a lot of potential for its users and users-to-be. Shortly, the reasons for using the blockchain are:

  • Reduced costs

  • Better security and transparency of records

  • Greater scalability

  • General convenience

Generally speaking, blockchains in logistics are used as ledgers, where each involved party can access information and securely audit paths of shipments. Blockchain implementation definitely alters this whole supply chain industry. It makes tracking more transparent and accurate. The third-party logistics industry really benefits from this form of technology, which is paperless and fully digital, easily accessible to everybody, and hacker-proof with a very high standard of safety.

Soon enough, these blockchain systems will become a new standard. Many companies already employ the technology, and many other ones intend to. Will you begin the “blockchain-based future” in your enterprise? Will it be suitable for the consistent, profitable work of your logistics business, your employees, and your clients?

We from Viking Consulting can support you in entering the European market and find the optimal solution for your needs & wishes. This complies with our culture to build long-lasting beneficial relationships.

We welcome you to book your free meeting now to discuss further. Hit the “Let’s talk” button so we can start our journey together. As well, stay up-to-date and connect with us on LinkedIn. Glory and honour await us! 

 

Friendly regards

Viking Consulting team

 

Who we are

We are Viking Consulting. The specialists within the fields of 3rd party integration and eCommerce software solutions. With 20+ years of experience in eCommerce, 15+ years of experience in development and integration, and 5+ years as a 3PL provider. We are the only contact needed for implementing integration, development, and consulting.

 

The company is based in Scandinavia and the team extends to even embracing more countries. We serve companies worldwide. Our foundation is based on the values: Be Brave, Be Prepared, Be A Good Merchant, and Keep The Camp In Order. Therefore we see ourselves as business partners and friends of the clients, employees, companies, networks, and the industry. 

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