Data stored in a block chain network cannot be tampered or erased, and can be verified quite easily. These characteristics would be immensely useful to sort out problems faced by the transport and logistics industry.
Realizing this, UPS announced its participation in a forum named Block chain in Trucking Alliance (BITA), which is planning to develop a custom block chain technology for the freight industry. Further, the forum will also educate its members about the block chain and its applications in logistics and transport industry.
The freight and logistics market is estimated to be around $1.5 trillion in the US. The figure is expected to increase substantially in the years to come, mainly due to the exponential growth seen in e-commerce, both in the US and worldwide. However, the cargo industry is ill-equipped to handle the growth. According to an FBI report, the cargo theft in 2010 was valued at $30 billion.
An increasing number of companies would require a tamper proof supply chain system. This is where block chain technology can assist cargo carriers such as UPS. Since data cannot be altered or erased in a block chain network, fraud and inefficiency will reduce considerably. The employees at each stage of transit will act more responsibly. Further, it will decrease the number of intermediates required to handle the cargo. Thus, package delivery delays can be averted.
Notably, a customer can track the package perfectly. If a baggage goes missing, trail verification is quite easy on a block chain network. Thus, the project is expected to provide a cost and time advantage to UPS and the 200 plus members of BITA.
For the reasons discussed above, Linda Weakland, UPS’ Director of Enterprise Architecture and Innovation, has a positive view on the use of block chain technology by UPS and freight industry as a whole.
Commenting on the project, Weakland said
“It has multiple applications in the logistics industry, especially related to supply chains, insurance, payments, audits and customs brokerage. The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders.”
There are also reports that an Italian company, named Local World Forwarders (LWF) is currently working on a decentralized logistics platform. Only time can tell us which one will prevail. However, what is absolutely certain is that block chain technology is reshaping the industry.