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A visual representation of a blockchain

For all the talk about blockchain, it’s still a concept that is hard for most people to understand. Even harder are the ways the technology is applicable to real-life and what’s most important to us – the logistics industry.

What is Blockchain Technology?

Although it’s been around since 2009, blockchain has only recently begun to be used by the supply chain industry. For a good primer on the technology, read this article by the Wall Street Journal.

At a high-level, a blockchain is a distributed database that keeps a list of records called blocks. The information in the blocks cannot change as each one has a timestamp and links to a previous block. So, while many users can access or add to the data, they cannot change or delete it. This creates a permanent trail of events, making it safer and easier for companies to conduct business via the internet.

Supply chains involve multiple stages and dozens of geographical locations, which makes it difficult to track events and incidents. Blockchain technology is one way for logistics providers to ensure that their data remains accurate and secure by recording and tracking vital information. The interface is easily adaptable to existing systems making it accessible for all type of companies.


The shipping industry is not immune to cyber attacks, some of which have left large shipping lines unable to serve their clients (as happened to Maersk earlier in 2017). Supply chain issues persist, such as counterfeiting, poor work conditions, or even revenues funding criminal groups. Investigation and accountability in the supply chain is very difficult because of the many links along the process.

With blockchain, a copy of the essential shipping data is stored on a de-centralized network on individual nodes so even if hacked, the data remains safe. Blockchain can also allow a company’s supply chain to identify security breaches more easily.

Increased Transparency

One of the challenges in a global supply chain is the difficulty of keeping track of all the moving parts – literally and figuratively. A blockchain is a way to connect different parties involved in the supply chain because of the transparency of the technology. Every time a product is handled, the transaction is documented.  The technology can enable everyone in the process of shipping to experience better visibility and connectivity.

Blockchain also enables customers to see where their products came from before arriving at their door.   For many customers, they don’t know (or can’t trust) the details behind the distribution, storage, and raw materials they’ve sourced. This means the price paid may not always reflect the true costs of production for the purchaser.

Increased Efficiency/Reduced Costs

The efficiencies this technology created will get orders filled and delivered faster.  It can record the transfer of raw materials and goods as they move through the supply chain as well as track purchase orders, shipment notifications, and receipts. Blockchain also has the ability to assign a serial number or barcode to goods so that they can be easily traced.

Losing orders and information costs money, whether the product needs replacing or the customer needs to be refunded. Blockchain technology creates a trail that can reduce delays and human error.

The blockchain has the potential to transform the supply chain and disrupt the way we produce, market, purchase and consume our goods. Although adoption by the logistics industry is still in its infancy, blockchain is shaping up to be a transformative technology. The transparency it offers will make every company’s more secure and reliable.

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