How Blockchain Technology Can Change The Logistics Industry

Updated on :October 06, 2023
By :Nataliia Kharchenko

Modern technologies enable worldwide trading, making the fright business grow exponentially. Its annual revenue is running into many millions. Yet, the old issues are still here. Obsolete equipment, delays in the supply, imperfect system and tonnes of human errors can destroy the booming sector. Some specialists claim Blockchain to be an answer. We decided to find out if it really can save the logistics industry.

Reasons Why Logistics Companies Should Adopt Blockchain Technology


In plain English, Blockchain is a database which records everything that occurs. These records cannot be deleted or changed. It gives the logistics business a chance to perform all types of transactions in a more secure and transparent way. An item, being shipped, changes dozens of hands along with its documentation. The software system which is based on Blockchain technology allows you to keep all the papers safe. 


This is likely to be the main reason for several SaaS companies working in freight sphere to opt for Blockchain technology. Blockchain also brings a lot of advantages to the owners of logistics or transportation companies. Here are the most evident ones:


Transparency: The biggest advantage for you from a Blockchain system is that all the documentation will be perfect. Every consignment note, list, and waybill will be filed in a correct and timely manner without getting lost. Such transparency is vital for all participants. As a customer, you can see all through the process – right from goods ordered from the manufacturer to delivered and placed on your shelves. It gives you a chance to make a well-considered decision about the best price-quality ratio and decide the supplier you should partner with accordingly. As an auditor, you can see how the goods are distributed and how it can be improved. 


Security: A shared, indelible ledger with codified rules can exclude the necessary audit with the help of internal systems and processes. Origin, place of storage, authenticity, property certificates, records: all the necessary information is in a single ledger! The most important part is that all the changes in all documents are recorded and stored and can’t be deleted or changed. It comes with a guarantee that no single document will be lost, destroyed or mixed up. 


Scalability: One of the best parts of leveraging Blockchain technology is that any person from anywhere in the world can access the document from any device at any given time. 


Improved Management: Blockchain system is very structured; it gives you insights to improve your inventory or transportation system. With the right settings and customization of the program, it can give you recommendations that will save your time and minimize the expenses. Due to smart contract, that uses blockchain as a base, you can also automate the document filing process. This system works autonomously, which means it can execute the terms of a contract without your interaction. 


Cost Saving: Usually, the validation of all the transactions between a supplier and a customer takes a really long time. An automatic flow of documents reduces this time dramatically. Thus, you process more goods and earn more money. With a unified system of document management, you are sure that fragile goods with specific storage and transportation conditions will not be harmed during the delivery.

All these small benefits bring in bigger advantages in the longer run. In future you get:

  • No paperwork delays: A lot of them will be filed automatically. 
  • No identification issues: There were lots of instances where frauds through fake ids and documents stole goods. The Blockchain system ensures this doesn’t happen.   
  • No trust issues: Your customers can track the delivery process and see all the details anytime they want. You also will get a possibility to track your orders and choose the most reliable supplier or transportation company.

Blockchain Solutions for the Logistics Industry


If we have been successful enough in persuading you to believe that Blockchain based software system can boost your logistics or transportation business, then go ahead and take the next step to figure out which system exactly you need for your business. The only available two options are: either create a system from scratch or use existing ready-made solution. However, both variants have a bright and dark side. Let’s compare the two:
A custom solution developed specifically for your needs will cost you more than a turnkey solution. Yet, you should remember that when you use proprietary software solutions, you need to pay every month. This means that a system from scratch would cost you less in the long run. 


The turnkey solutions are ready to work within a few minutes you’ve purchased it. On the other hand, a custom solution requires more time for planning, development, and testing. Nevertheless, even if you paid for an existing platform, you also will need to hire an experienced development team for customization and settings of the system. 


When you start your own development, in the end, you get a system which fits all your needs. When you buy a system, you get the whole package of services and there are high chances you end up paying for the features that are not required. But this is not the worst scenario, it feels even worse when you’ve paid for the system but didn’t find there the functionality you need. In such an instance, you will need to contact the SaaS provider and find out if they allow external developers to customize the system and whether they provide any tools for that (like SDK or API). If they don’t, then you’ll have to look for another provider. Fortunately, the majority of software providers nowadays offer a free trial period which gives you a chance to test a system before you pay.


If you believe that turnkey solutions have more assets than faults, let’s take a look at the most famous, and efficient software solutions for logistics sphere based on the Blockchain technology. 

IBM is probably the most well-known Blockchain solution for Freight and Logistics. The tech giant offers:

  • Access according to a user permission level
  • Comprehensive data on a container, it’s location and stage of processing.
  • Real-time data about goods 
  • Data protection, no one can change the documentation, modify or delete it.
  • Fraud protection due to the transparency of the system and detailed records. 

Apart from the above-mentioned ones, the company also offers developers various tools to create own applications based on the Blockchain. This means it’s a great software to develop a custom solution specifically if your company is hiring a professional vendor.  

OpenPort platforms is an Asian company which created a Blockchain system on Ethereum to manage one of the hardest tasks in the supply chain and freight spheres – the cash flow issue. The main idea here is to get rid of all paper proof of delivery documents which basically slows the whole process down. OpenPort provides a single electronic platform, secured with the blockchain structure for all participants: shippers, retailers, and transporters. The system offers: 

  • A full set of products based on Blockchain technology, like a mobile app, analytics, and multi-modal TMS.
  • Easy integration with ERP system of a shipper. 
  • Fast and secure payments protected from frauds, cyber attacks and system failures.
  • Smart contracts which track every transaction and save it in a blockchain
  • Easy access for all participants 
  • Third-party data integration (GPS, IoT)

OpenPort recently joined Blockchain in Transport Alliance (BiTA). BiTA is a non-commercial organization which creates standards of Blockchain use in logistics and transportation sphere. 

BlockArray offers logistics enterprise solutions. The company provides a solution and guarantees on-chain privacy. Using symmetric and asymmetric encryption, along with blinded addressing, the software hides transactions from all non-transacting participants. In such a mode, you get a full confidentiality and all the benefits of a blockchain system. Another advantage of this solution is a distributed hosting scheme, which the company uses. The combo of collocated servers and usual cloud hosting providers makes it possible to guarantee an uptime of 99% and a compatible pricing model. 

How to Embrace Blockchain Technology for Logistics


If you recognize the potential of Blockchain technology for logistics business and seriously want to adopt it, you have to consider a few things before you develop the application roadmap. There are six basic steps that will lead your business through the way of Blockchain adoption.


1. Define the strategy
Brainstorm and find out how Blockchain can support your business and help reach your business objectives.


2. Outline the plan
Be specific. Choose certain units of your business where the value of Blockchain is most evident. Then develop the detailed plan that suits your business needs.


3. Prove the concept
With the focus on the outlined use case, you can perform the controlled learning of the technology values. Make as many iterations as you need and accordingly make necessary corrections before you jump to the next step. 


4. Develop and launch
After the assessment stage, you are ready to implement the project and launch the transition from your standard business model to Blockchain-based.


5. Scale
After a successful test, it’s time to implement Blockchain solutions for the next business units defined in the initial strategy.


6. Expand and manage
Finally, you can expand the platform and deploy ongoing improvements to it.

Last Words:

In summary, the Blockchain is the future of all Logistics sphere. The technology will solve all the existing issues which slow the growth. Hire a firm from the list of top blockchain technology companies to build a customized solution for your logistics business.

Nataliia Kharchenko
Nataliia Kharchenko

Nataliia Kharchenko is a Marketing Copywriter at Cleveroad  - A Mobile and Web development company, for 5 years. She has been among those who forged customer relations via content marketing.

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