Blockchain can replace the traditional paper trail
When we think of blockchain, we usually think of money; specifically, Bitcoin.
Blockchain serves as a general ledger for cryptocurrency transactions. The technology uses a peer-to-peer network of computers to validate and approve value exchanges using algorithms. Each transaction, once approved, becomes a tamper-proof “block.” Most commonly, these blocks represent the transfer of cryptocurrencies.
Blockchain is predicted to radically change the financial services sector. On May 21, Deloitte Tweeted that 10% of global GDP will be stored in #Blockchain. For companies like Deloitte, staying ahead of the curve in blockchain technology is paramount. But what about for logistics companies?
Get ready to say goodbye to the physical paper trail.
Just as blockchain enables financial transactions, it also stores blocks containing any kind of information to transfer. Despite its original design for cryptocurrencies, blockchain also presents unlimited potential for recordkeeping.
Complete digitization of documentation for transportation still faces challenges with security. Unique digital signatures on blockchain ensure protection from tampering. Its decentralized structure allows for free flow of documents between parties and countries without the interference of centralized authorities.
For carriers and third parties, billing on blockchain will help alleviate headaches. Tracking milestones of shipments in real-time backed by proper electronic documentation will mitigate disputes and allow for more accurate invoicing.
Bills of Lading
The bill of lading represents the title to a set of goods in transit. Blockchain’s infrastructure can facilitate the transfer of titles between parties in a completely digital manner. Each time a bill of lading changes hands, a block is created in blockchain.
Many bills of lading are already electronic. However, this concept still faces potential legal challenges. They are typically not accepted by banks. A usual arrangement between a seller and buyer calls for the buyer to pay for their goods in exchange for the bill of lading. The goods are often shipped before the buyer pays. In that event, original bills of lading are often exchanged by banks and title is granted to the buyer once they pay. This is common practice in international trade.
Without the support of global legal systems, blockchain bills of lading will not fully replace original bills of lading. Players in the supply chain may forgo typical legal protection by exchanging bills of lading in a decentralized system. At least for now. For scenarios not involving title transfer during transit, blockchain presents a modernized, streamlined substitute for paper bills.
The proof of delivery marks the completion of a job. When a trucker delivers, the document is signed by an authorized recipient and is time stamped.
Logistics professionals face challenges with PODs when they contain mistakes or get lost. In the current environment, many truckers take a signed POD, take a picture of it with their phone or scan it into a TMS system. This creates significant room for error.
Shipment tracking on blockchain will allow drivers to create virtual PODs automatically. The POD is another piece of paper facing obsolescence in the Blockchain revolution.