Jargon. Buzz words. Industry speak. Every enterprise develops terminology that is, to some extent, unique to those who work within that sphere. When industries overlap and interconnect, that once internal language becomes commonplace. Commonly used, but not always commonly understood. A recent example of this is “Blockchain.”
Blockchain technology originated with digital currency. However, it is now being used in a wide variety of applications, ranging from financial services to smart appliances to the Internet of Things. This once Bitcoin-specific term has moved into the mainstream vocabulary. It can be found in newspaper and magazine articles. There are even television commercials going on and on about blockchain. But what is it?
Blockchain is best described as a single, computerized record of a transaction from beginning to end. Each action is validated and added as a new “block” to the existing transaction chain, which is broadcast across a network of users. Generally, once a transaction has been added to the chain, it cannot be deleted or changed. The path is transparent and the blocks are protected.
According to Anthony Lewis in his blog A Gentle Introduction to Blockchain Technology, a blockchain can be visualized as a book. Just as a novel would have the names of the author and the book across the top of each page of text, each block has a “header” containing the data about the block along with the text of its content. Page by page, the blockchain book is written in indelible ink, and it tells the detailed story of the transaction.
In the logistics business, blockchain is bursting onto the scene across all sectors and has the potential to revolutionize the entire industry. For customers, blockchain promises greater transparency, as the customer can follow each step of a product as it travels across the globe. For shippers, because each transaction is sealed into the blockchain, there is a permanent record of each link in the logistics chain. Companies can track their product, identify bottlenecks, and increase efficiency. Each block is a breadcrumb, and the transaction trail can be employed to fight fraud and enhance loss prevention.
In this era of same-day delivery, truckers are employing blockchain to avoid route congestion. Maersk and IBM have gotten into the game, announcing a joint blockchain initiative to manage and track container shipments. Food supply chains use blockchain to identify the source of quality issues. In the railroad industry, companies like BNSF are looking at establishing blockchain standards for train maintenance. And the trend is only spreading, as several transportation companies have joined together to form the Blockchain in Transport Alliance in order to develop blockchain standards for the freight industry.
Regardless of your company’s place in the industry, chances are that so-called “smart” blockchain contracts will impact your business. By linking together the parties and their financial institutions, funds can automatically be transferred when delivery is confirmed, saving time and cutting the cost of doing business.
The logistics industry connects the world. And blockchain technology might just bring us all closer together.