Blockchain technology and the logistics industry in South Africa
By Murray LeClair - Mar 26th, 08:38
Blockchain technology has been something of a tech buzzword of late, especially due to all of the publicity around Bitcoin in recent months. While cryptocurrencies are the best-known use of blockchain as far as most people are concerned, its uses outside of financial transactions haven’t failed to be noticed, and it is something that is now being leveraged heavily in the logistics industry.
Here are some of the possibilities blockchain presents outside of Bitcoin trading in South Africa:
Blockchain’s Main Benefit In Logistics: Improved Transparency
Where blockchain tech is used, it creates a decentralised register of transactions that cannot be tampered with. Effectively, every user of a register owns an up-to-date version of a log, which they can only modify with the agreement of the majority of the system. This creates a number of inherent benefits that lend themselves very well to logistics, because it makes every part of the process, as a product goes through from one end of a supply chain to another, transparent.
Transparency is important because logistics is becoming ever more complex, especially where companies are striving to find faster and more efficient ways to offer their wares to customers. When blockchain is used instead of centralised registers, it becomes very difficult to tamper with data, and in turn, data can present a fuller and more detailed history for any given shipment or item.
How Blockchain Can Help Tackle Theft
Cargo theft costs the industry an estimated $15-30 billion USD every year, and these estimates are considered to be conservative, given that many companies do not report all of their theft losses for fear of showing that they have weaknesses in their security, for example in the vetting of the people hired to work with their shipments and deliveries. These losses end up being passed on as costs to consumers, and a recent estimate suggested that the price hike could be as much as 20%.
One of the biggest theft issues currently facing the logistics industry is what is known as fictitious pick-ups, where a crew presents falsified documents at a dock to collect a shipment.
Blockchain technology can be used to make it much harder for thefts and losses to take place during supply chain processes. With more transparent records that are less prone to mistakes or tampering, it is far easier to verify that products are making their way into the right hands, and far more difficult for cargo to ‘disappear’ in transit.
Is Blockchain the Future of Logistics and Supply Chain Management in South Africa?
Many big-name businesses are already either using or considering blockchain for logistics and so it is safe to say that, with time, it will become the established way for these things to be managed and recorded. Of course, rolling out new supply chain workflow systems is not a small undertaking for national or global companies, and so the shift to this technology being the industry norm will not be overnight.
Blockchain is now about so much more than cryptocurrencies and is a technology that businesses will certainly be keeping a close eye on this year.
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