How it will be with the blockchain. As for the problem with counterfeit products, the blockchain technology allows you to track the origin of goods from the counter in the store to the specific manufacturer: factory, farm, enterprise, person. And this data has a high degree of truth, since each consignment of goods (or each individual product, if it is something large and / or expensive) is equipped with an RFID tag that constantly monitors the location of the product and the interaction between participants in the supply chain.
In addition, RFID sensors can also measure speed, temperature, humidity, and other empirical indicators. Thus, it is possible to detect a violation of transportation conditions and to identify spoilage of food products, as well as to track the process or the participant who is responsible for this. In addition, if a product is infected, for example, with E.coli bacteria, then a blockchain-based system can identify the source of infection in a matter of seconds and track all infected batches of goods.
Who implemented (cases):
- Everledger uses blockchain for the diamond industry. The registry stores data on the origin of the gemstone, color, transparency, cut, carat weight, certificate number and other information.
- A project of the type “Software as a Service” that collects and verifies the history of goods. It is used by Martine Jarlgaard, The Grass Roots Farmers Cooperative, Organic, Pole and Line, Co-op and many other organizations and manufacturers of goods around the world.
- MediLedger uses blockchain to manage EPCIS-compliant drug supply chains. By 2023, all US pharmaceutical companies are required to adopt this standard.
- SkyCell has developed cargo containers for transporting medical goods that require strict adherence to temperature conditions. Inside the container IoT sensors connected to the blockchain in the cloud.
3: Freight and Delivery Improvement
How it is.
In a typical delivery scenario, about 30 parties are involved: shippers and consignees, 3PL, carriers, government services, banks, insurers and others. Moreover, during the delivery of only one consignment of goods, they exchange more than 200 paper messages: POD (delivery confirmation), invoices, BOL (bills of lading). The cost of servicing this paper work is $ 300
, or 10-15% of the cost of transportation.
How it will be with the blockchain. According to IBM, the implementation of the blockchain could save the logistics industry $ 38 billion a year. This will be possible thanks to smart contracts that automate most of the workflow and business processes. In addition, a distribution registry will reduce errors, shorten delivery times, and detect fraud.
Who implemented (cases):
- Maersk and IBM launched the TradeLens logistics system based on the Hyperledger Fabric blockchain (created by the Linux Foundation) to track shipping freight traffic and exchange customs and financial information between participants in the supply chain. In mid-2019, TradeLens accounted for about 30% of the global shipping market.
- A direct competitor to Maersk with a comparable market share. The project involves Evergreen Marine, COSCO, CMA CGM, Yang Ming and OOCL. Technical partner - CargoSmart.
- Singapore BaaS platform for logistics and supply chain management. It is used by BMW, Renault, DNV-GL, H&M Group and other brands
4: Billing and Payment
How it is.
As we noted above, the shipment of goods from one country to another creates a supply chain in which about 30 organizations participate, interacting with each other more than 200 times. A significant part of these interactions is billing and payment. In the traditional approach, these financial transactions are complex, require a lot of time and bureaucratic efforts, which creates the conditions for manipulation, fraud and generates a lot of mistakes.
How it will be with the blockchain. The technology allows you to automate the billing and payment process by linking these calculations to a specific action, for example, making an entry about the completion of the shipment of goods or the passage of a vessel, container and / or cargo through the border of a country or port. IoT sensors are responsible for tracking actions; smart contracts are responsible for process automation.
Thus, the blockchain solution:
- will ensure accuracy and compliance with the timing of financial settlements;
- reduce the need for paper circulation and intermediaries, which are necessary to guarantee honesty and compliance with transactions, which will greatly reduce costs;
- help prevent fraud or quickly identify it;
- reduce the generation of errors (for example, the wrong company name or account number) to a very low level;
- speed up all processes.
Financial settlements between participants in the logistics processes can be carried out in fiat and / or cryptocurrency money. The latter option is more efficient, since it allows you to reduce costs in trans-currency and international payments.
Who implemented (cases):
- Tallysticks has created a blockchain platform that can process invoices and payments for logistics and other enterprises in real time, which potentially allows it to become the base platform for the invoice factoring industry with a turnover of more than $ 1 trillion.
- Blockshipping creates a global container platform for managing transaction payments between supply chain participants, as well as real-time container tracking.
- trade (a joint project of HSBC, Deutsche Bank, Nordea, KBC, Natixis, Rabobank, UniCredit, Santander and Societe Generale) has established partnerships with TradeLens and TradeShift to digitalize the document flow of shipping and offer comprehensive services for participants in global trade processes.
- Visa also saw great potential in the blockchain and launched its B2B Connect payment service. With this solution, banks and other organizations will be able to digitally identify counterparties and financial transactions within seconds, rather than 2-5 days.
5: Freight Market Launch
How it is.
In the current state, the freight market is inefficient and incomprehensible. There are no clear standards and rules that would address the issues of liability of the parties for compliance with transactions and explicit or implicit fraud. In addition, this market is opaque, which quite often leads to unpredictable changes in freight costs, despite the absence of significant changes in supply and demand, as, for example, in early 2019, when the market fell into a state of shock due to the rapid drop in bulk carrier rates tonnage.
How it will be with the blockchain. Blockchain technology and smart contracts can be used to create a fair trading platform where companies can hire freight carriers in the shortest possible time on understandable and transparent conditions. At the same time, since all the terms of the contracts will be pre-specified in smart contracts, the level of responsibility of companies will increase, so it will occur immediately automatically, and not after long negotiations and / or a decision of the arbitration court.