In 2017, the electronic “cryptocurrency” Bitcoin exploded onto the financial scene as professional investors and individuals alike bought into the potential of a quick path to riches. The news feverishly reported each new milestone as the digital coin demonstrated its volatility day after day, which has made a recent resurgence in the media given COVID-19’s impact on the financial markets.
An unfortunate casualty in the hype and subsequent crash of Bitcoin was the tarnished reputation of the underlying technology, called blockchain. Google Trends showed that public interest in blockchain had dropped by 75% in the months following the initial craze, and the 2019 Gartner Hype Cycle report showed blockchain solidly in the so-called “trough of disillusionment.” But as the world and its supply chains scramble for answers and responses to the ongoing crisis, blockchain’s capabilities may be a welcome source of support.
A newfound purpose
The ground-breaking technology of blockchain is far from dead, as the benefits of the distributed database remain. In logistics and the supply chain especially, it shows much promise. Blockchain will enable companies to more easily communicate and show the location of their products throughout the supply chain, keeping all involved partners updated in real time while selectively showing the full history of all items in the chain. These newfound insights will not only show product movement, improve transparency, prove ownership, and allow defect traceability, but will provide accurate assurance to those awaiting the arrival of essential goods. This unprecedented visibility and its resulting improvements can also cut costs and give customers more confidence in making informed purchases, as they will see the complete product journey from the manufacturing floor to their shopping cart.
Blockchain’s future in supply chain
As the technology continues to mature, blockchain has piqued the interest of logistics companies looking to respond to current and future disruptions by investing resources in the expansion of pilot projects, eventually moving into mainstream usage. Last year, the Blockchain in Transport Alliance (BiTA), the Chattanooga, Tennessee-based organization with 500 global members, such as Target, UPS and J.B Hunt, held its annual symposium in Chicago. BiTA (of which Kenco Logistics is also a member) is focused on developing an open blockchain standard for logistics-focused blockchains. Once this standard is in place, software and technology groups will be able to more confidently develop compliant software platforms that will be able to seamlessly connect a multitude of companies up and down the supply chain using blockchain.
In this rapidly changing industry, it is more important than ever for shippers to adapt to the complexities of new market innovations. A 3PL using the best tier-one warehouse, yard, and transportation software can provide the expertise and tools to make procurement more efficient, while also helping shippers to operate more efficiently and effectively.
While the Bitcoin excitement has subsided, the possibilities of the underlying technology are endless. Blockchain technology is here to stay and is already proving value across the supply chain industry, speeding up track and trace processes for shippers and adding transparency to transactions for retailers and consumers through times of uncertainty.