How Blockchain technology is pushing innovation in the logistics sector

November 16, 2017 | Bas van der Meer | , ,

Blockchain technology is often compared to the rise of the internet. This “digital ledger” makes it possible to store data de-centrally. This is not only safer but also cheaper. It is still uncertain whether it will change our lives as drastically as the global web, but Maritime Maersk and the Rotterdam people are already overboard and have started experimenting with blockchain. But how progressive is the logistics sector exactly?

Maersk innovates

The blockchain application for Maersk that has to go live next year, solves a specific problem. There are many different parties involved in Maersk’s transport processes, such as the insurer, the owner of the cargo, shipping company, etc. They communicate through a variety of different documents, which is cumbersome, time-consuming and unnecessarily expensive.

Thanks to blockchain technology, everyone involved in the process knows where the load is at all times. It is also immediately clear whom’s cargo is insured and under what conditions. This makes insurance and handling claims a lot easier. Blockchain also makes instant information available.

Port of Rotterdam saves costs

The port of Rotterdam also acknowledges the importance of blockchain. That is why it is launching a knowledge platform together with the Port Authority, in which concrete applications and solutions are developed based on blockchain.

Thanks to blockchain technology, data can (quickly and safely) be shared with other parties. This makes it easier to purchase container trucking from unknown parties. There are also fewer links involved in the transport process. That saves a lot of time and therefore money. In some cases even five to ten percent of the total costs. That makes a huge difference to a business with very low margins.

Innovation lags behind

Of course the examples above speak to the imagination. Blockchain is no longer the shiny toy of startups or the technology behind the much-discussed crypto-coin Bitcoin. The technology seems to finally deliver on its promise. The fact that corporates in the logistics sector and governments dare to opt for this technology shows that blockchain appears to be mainstream.

That sounds like good news. But in practice, the use of blockchain encounters a cultural problem. Companies in the logistics sector are not willing to give up their autonomy in a (chain) collaboration. This was concluded in a recently published evaluation report from research agency Dialogic.

This report evaluates the government’s policy on the top sectors in the Netherlands. The logistics sector was also discussed. A poignant image is created here of a sector that would love to get started with a digital ledger to share data, but is very reluctant about actually sharing data. If this persists, the blockchain remains nothing more than a promise.

Cultural problem

We can in fact continue this line. The innovations seem promising and appealing to the eye. The fact that listed parties and governments are joining in quickly leads to an overall ecstatic mood. In actuality, there is little reason to cheer.

The digitization in the transport sector has in fact only hit puberty. Other sectors, such as the financial sector are further developing digital services and solutions. As an industry, we are taking the first steps towards digital maturity. Until logistics parties are willing to share data, blockchain technology is useless.

What needs to change? Not only must it become more common to share data, but traditional parties must now also really focus on innovations. Otherwise, they run the risk of seeing their business model disrupted by new, technology-driven challengers. If these cultural changes do not take place, there will soon be no more companies left to change the culture.