Shipping with Blockchain

10 January 2020

In 2020, the majority of us are used to buy goods and services online, including things that a few years ago were considered impossible to sell on a typical e-commerce website, such as groceries and medications. Nowadays, however, we can buy pretty much everything online and get it in less than 24 hours out of our door, with easy-peasy return and refund policies, making websites trustworthy shops.

Behind the scenes, there are thousands of people who make our two-three clicks become a physical product, delivered at home. The shipping process alone, in fact, is the result of the work of warehouse pickers, managers, drivers, cargo pilots, and many other people involved. All of them carry documents required by the law that must be checked and validated, affecting the speed and the way shippings are carried out, and it is the same for duty taxes as well, whose payment must be certified.

These processes are so time-consuming that sometimes cargo ships or planes land before their landing bills are ready, so they have to wait until everything is approved in order to discharge their load. 

How can Blockchain help?

Blockchain technology can be used for nearly all kinds of digital transaction, from money to real estate contracts. It is transparent, because everything is recorded in a public (encrypted) ledger, and it is fast because there is no need for a middle person or entity (e.g.: banks, lawyers, agents).

Although shipments sound like physical transactions, rather than electronic, there is also a bureaucratic side that comes out every time the goods shipped move, and that is what can be digitised and safely recorded on the Blockchain.

With a blockchain in place, a common database would also be essential and helpful, because of the high number of parties involved, who often do not share any information at all.

With a common database, authorities and companies in charge of the shipment would be able to check ID and documents in a blink of an eye, allowing the goods to quickly reach their final destination.

Other advantages of shipping with Blockchain include making transactions paperless (our forests will be grateful for that), cutting middle-men off, drastically reducing prices and fees, and conduct freight negotiations via blockchain, with a higher level of accuracy and everything recorded.

Some actions could be carried out automatically with dynamics that recall those of smart contracts, saving more time.

Drones and the Blockchain solution by IBM

Amazon, DHL, FedEx, and other big companies of this industry have been using drones to deliver parcels for a few years with encouraging results in terms of reliability, speed, and accuracy.

Some companies, however, predict a future in which parcels could be stolen by other drones. IBM is one of them and is working on a sensor that detects changes in altitude of the parcel and records them on a blockchain. The recipient gets notified of all changes.

There are no figures about drone thefts, so we do not know how widespread this activity is, but it is still interesting to see how shipping with Blockchain could potentially work.

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