How Blockchain Is Making Liner Shipping More Efficient
Byline: Werle, Konstanze
Digitalization has taken the world by storm. Technology is being sought after in every industry, from retail to mining, to streamline operations and lower costs. The logistics industry is no exception.
Sensors placed on truck engines and linked to onboard computers evaluate fuel usage and mechanical performance. This helps drivers reach their destinations with less downtime while using less fuel. Sensors in shipping containers also help companies reduce damage to products. Logistics companies are optimizing processes with the Internet of Things (IoT) to share real-time data. Now warehouse managers, truck drivers, and retailers can track shipments with more accurate ETA’s, while also reducing lost and damaged freight.
Logistics companies are not being left behind in this digital disruption. They are turning to digital technologies to simplify documentation, track cargo, provide better customer service, and maintain international trade compliance.
Blockchain’s ledger technology: clarity in shipping transactions
Blockchain has evolved from being a technology associated with bitcoin transactions. Now, shipping companies are using this distributed database technology in innovative ways.
Blockchain, a public, distributed ledger, holds transactional information in “blocks” of records. Each person involved in a transaction can read the information without tampering with the data. This process makes the ledger completely secure. They can add their own information to show their completed blockchain transactions.
This digital technology can reduce the amount of documentation throughout the supply chain. It allows for real-time, secure access. Blockchain also allows customers to better understand the supply chain process so they can track shipments while speeding up the compliance process.
Here are several ways that blockchain can help liner shipping companies:
Document exchange simplicity
Liner shipping companies must deal with tons of documentation: certificates of origin, bill of lading, customs declarations, and vessel manifests. This documentation exchanges many hands at every port before reaching the end customer.
With blockchain, liner shipping companies, distributors, and regulators can access information through apps. This technology can reduce the amount of paper documentation and ensure greater accuracy of information while helping shipping companies stay in compliance with regulators.
Streamlined payment transactions
Since blockchain technology was first introduced in the financial industry, liner shipping companies can take advantage of this digital technology in their own financial transactions. Combined with the use of smart contracts, payment processes can be sped up when each part of the blockchain transaction is completed.
Algorithms can verify digital signatures and shipping services that have been completed. Then the digital technology can evaluate the smart contract’s payment terms. These apps can automatically send payments to the manufacturer, distributor, and shipper.
Improved delivery quality
Occasionally, shipments are lost or damaged during the transportation process. This can affect customers’ trust in a liner shipping company. Blockchain can provide better asset management for customers by offering increased transparency.
Customers can review the blockchain information and each company’s transaction. They can check the manufacturer’s certificate of origin to ensure quality materials were used to make products. They can also review the distributor’s documentation to view events in the logistics chain. Customers can track the blockchain information to see where the supply chain process failed.
With this digital technology, they can hold the right companies accountable for the missing or damaged products. Now, the customer can make more informed decisions about their supply chains for increased efficiency.
Blockchain enhances liner shipping operations for global market
More companies are taking a globalized stance with their supply chains. Liner shipping companies are seeking solutions to make their operations efficient and scalable. Blockchain technology is changing the logistical landscape. This technology provides more digital connectivity between manufacturers, distributors, shippers, and end customers. Transportation management is improved thanks in part to the blockchain’s digital disruption.
Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value: Accelerating Digital Transformation in Transportation.