Global Trade Needs Blockchain!

The increase in connections and trade routes, more complex supply chains and the enormous amount of data are a big challenge for shipping companies. Distributed ledger can help keep all this information safe and transparent, to connect it in a network and to eliminate human errors.

Blockchain can compile data on goods movements and related factors which allows companies to carry out profound analyses and find more efficient solutions.

Another use of blockchain in this field is fighting the counterfeiting of products, especially medication, by assigning a unique identity to each unit, which is then linked to critical information about the product. This way the unit can be tracked online at any stage of its lifecycle.

Smart contracts are of special utility in this field. They allow retailers and logistics companies to reach agreements that will hold all parties accountable and will be unconditionally met. Besides they help to remove middlemen, this way decreasing delivery time and various errors.

Now let’s have a look at the real examples of blockchain use in logistics. There are many providers of blockchain solutions for various logistic tasks on the market including giants like IBM, Microsoft, Oracle and Accenture and other narrow-profile companies. Mostly they develop solutions for internal use in different enterprises. But also there are projects with a more holistic approach:

• In 2018 IBM and Maersk, a Denmark-based giant logistics company, created TradeLens which was supposed to be “an industry-wide, open platform solution for all ecosystem participants”. The platform was open to shipping and freight operators. Its members could validate the transaction of goods via distributed ledger. The project successfully developed for 5 years, had five of the world’s six largest carriers committed to the platform and included over 100 entities. Unfortunately, in 2022 it was announced that TradeLens would be discontinued as “the need for full global industry collaboration has not been achieved”. Well, blockchain in logistics (as well as anywhere else) can succeed only if there is a culture of collaboration.
• The holy place is never empty… After the termination of TradeLens project Hong Kong-based Global Shipping Business Network, which is “here to simplify trade for all”, became the largest blockchain platform for collaboration in shipping and logistics. Currently, it mostly involves Chinese companies but is working to attract more Europeans (even Maersk, which “may be slightly challenging,” according to GSBN CEO). Now the company has 8 shareholders: three shipping companies and five terminal operators, one of which is German-based Hapag-Lloyd. We hope that this project will grow fast and will soon go outside of China but the company’s CEO believes that blockchain adoption may take another decade.

Blockchain logistics is a good example of how this technology can be used outside of the crypto industry and shows that blockchain is more than just some “fake” money as some people believe. Just imagine having a global blockchain platform that tracks all the product movements. That would be an incredible leap in the development of global trade! Share your thoughts on this topic in the comments and we will continue to Observe for you.