Could 2019 be the year of the blockchain in logistics?
Blockchain is most mentioned trend to watch in 2019 finds new report
Blockchain was the clear winner when more than 750 transport industry professionals were asked to identify what what they thought would be the major trends to watch in 2019. The survey, which features in the Supply Chain Hot Trends 2019 report, also notes actors across the supply chain are concerned about rising costs and low visibility, both of which may be helped by wider adoption of blockchain.
What is blockchain?
Sami Rusani, CRO, Shipchain
Traditionally, you have a ledger that’s owned by someone – a bank, an association, a company – and they have a designated administrator. Now, that administrator handles all the transactions on that ledger but you have no insight into what’s going on. You can’t call the bank and say ‘Hey, I thought I noticed something kind of shady here. Is it OK if I verify your transactions?’ That’s never going to happen, right? In the blockchain technology, there’s a distributed ledger that’s public. Everybody has access to the ledger, although the information and the accounts, everything is encrypted, although everybody verifies it. There’s no middleman. I don’t have to trust a single entity to verify or handle all the transactions, so it makes it way more fair, so to speak. I don’t have to trust you, I don’t have to know you, but I know that everyone together is verifying what’s going on.
The State of Blockchain
However, blockchain will need to overcome relatively low rates of adoption currently. Amongst retailers, brands and manufacturers, the majority are only just getting acquainted or probing the technology. Fifty percent are not yet involved and 38.2% report that they are largely spending on understanding the technology, with just 18.4% either testing or implementing blockchain technology.
Logistics Service Providers (LSPs) are much more involved in putting blockchain into the supply chain, with 31.2% reporting that they are either testing or implementing the technology. We can expect them to help spread blockchain adoption outwards and to bring in end-customers to distributed ledgers over time.
Those actively incorporating blockchain into their business operations remain a minority currently. However, it does feel that a tipping point has been reached in terms of awareness and understanding of the potential value-add that widespread blockchain technology would bring.
When it comes to where executives are expecting blockchain to have the biggest impact, there was a consensus that pharmaceuticals will see the most change as a result of the technology being adopted. The strong need for governance and proof of origin for pharma products means that blockchain would be well-suited to creating more visibility and safety in the pharma supply chain. Given that pharma products move across a wide variety of actors, all with their own systems and the need for a high degree of privacy in each, blockchain offers a potential means to reduce the cost and complexity of shipping drugs between factories, pharmacies, hospitals, end users and back again when product recalls are required.
This report gathers together the top trends across the industry from the opinions of more than 750 industry thought leaders. In it you can find:
- The key technology trends set to disrupt the supply chain.
- Economic sentiment analysis.
- The thoughts at the forefront of the industry’s mind.
- The risks and concerns that cloud the horizon in 2019.
- Key strategies to mitigate costs and drive productivity.