In today’s age, everyone has ordered something online and had it delivered to their doorstep, whether from a different city or a different country. You might order consumer goods like cosmetics, clothing, food, etc., online, which can be shipped over the ocean or by air. However, our everyday endeavors on the e-commerce market seem somewhat insignificant compared to imports and exports of capital goods.
When you think of capital goods and imports, you might think of building materials, equipment, vehicles, pharmaceuticals, fuel, etc., anything that’s in demand. Have you ever wondered how these things are kept track of? Billions of dollars go into imports and exports every year; surely, it’s going to be a bit difficult to get on top of all these transactions. The assumption is correct; paper documentation for millions of shipments is bound to become difficult to keep up with. So how can we fix this? What can we do to make transactions easy to record?
In 2018, Maersk, the world’s largest Danish shipping company that works both in the ocean and inland, and IBM, an American multinational technology corporation and a blockchain advisory agency, had the right idea. Many consumer and capital goods are up to Maersk to take care of. Maersk works with hundreds of countries and delivers materials to anyone to help them grow. They worked with IBM to introduce blockchain technology to the logistics market.
Maersk and IBM; How did they combine tech with logistics?
As mentioned above, the logistics industry has had trouble keeping all the shipping transactions and their receipts in order. In January 2018, an idea was put forward by Maersk and IBM to work together to create a new global trade platform using blockchain technology. The idea was to better the logistics industry by creating easier modes of data-sharing, visibility, and collaboration to create a digitalized supply chain pilot using blockchain.
You might wonder, how would blockchain help with all of this? What’s the use of having blockchain store hefty bits of data instead of using paper? The two companies set many goals to improve the logistics market thanks to blockchain, such as:
- Reducing global shipping costs
- Eliminating inefficiencies from paper-based processes
- Improving visibility across supply chains
The two forces joined to create a new platform called TradeLens. TradeLens is an open and neutral industry platform based on blockchain technology to promote the efficient, transparent, and secure exchange of information to establish trust across the global supply chain. The Maersk IBM blockchain strived for the neater storage of digitalized information to provide foolproof transparency between all involved parties in the ecosystem.
How does Blockchain Technology help?
The central idea behind blockchain technology is innovation, visibility, transparency, and trust among corporations and individuals. The blockchain format can provide viable contracts that keep the logistics facility running smoothly and securely. These contracts can deliver information to all who have access to the blockchain to strive for values and morals in terms of data transfer and visibility.
By digitalizing sensitive information involving billions of transactions worldwide, Maersk and IBM have chosen a safer route to secure the world’s assets. The most notable problems faced by the logistics facility and importers are:
- The biggest issue for importers is visibility; one cannot truly know where their shipment is until it arrives at the port.
- Another issue with the lack of visibility is that delays can be unaccounted for, making it difficult to prioritize different shipments.
- Some companies dabble in shipments of perishable items and have to account for transportation as soon as the shipment lands in their countries to avoid losses.
So what can blockchain do to help overcome these issues? What does blockchain offer as a solution to all these problems? TradeLens has narrowed it down quite well:
- Many importers lack visibility; TradeLens strives to eliminate this problem by establishing a networked supply chain platform on the blockchain.
- This shipping platform can be shared across all the stakeholders across the supply chain, such as ocean carriers, suppliers, retail customers, etc.
- The TradeLens platform allows suppliers to generate real-time status reports on shipments, providing complete visibility to the importer.
Blockchain for the Future
The TradeLens platform has already been on board for three years and, within the first year, it had logged 250 million shipping events in 2018. Blockchain in logistics has helped create a safer environment for importers and supplies and stakeholders and ocean carriers all over the world.
Easy data-sharing, visibility, and collaboration have built trust, values and have helped billions receive their shipments smoothly. If blockchain technology can help the logistics facility, there’s no telling how much more the blockchain industry can help different aspects of the business world. In trying times like the modern era, where values and trust are scarce across collaborations, we all need more blockchain to fill in the gaps.