Blockchain Will Transform the Logistics Industry

Blockchain Will Transform the Logistics Industry

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Team Shadowfax

Blockchain Will Transform the Logistics Industry

Table of Contents

  1. Introduction
  2. What is Blockchain?
  3. How Blockchain Technology Can Transform the     Logistics Industry?

           A.  Increase Security & Transparency

            B.  Improved Traceability

            C.  Increased Efficiency

            D.  Ability to create Smart Contracts

            E.  Eliminate the Need for Intermediaries

     4. Conclusion

     5. FAQs



As the world of technology extends to all facets of human needs, the industrial sector inevitably grows with it. Similarly, the introduction of blockchain technology recently has laid a great impact on boosting the working methods, areas of application, and speed of different industries including IT, finance, and healthcare.

Blockchain technology is being used in banking, healthcare industries, and other similar sectors using information technology to operate. It helps to establish an easy working environment by storing data in a decentralized form. The introduction of this technology in the logistics management industry can revolutionize the entire domain. Before grabbing on to the positive aspects of blockchain technology for the logistics industry, let us know what this technology is.

What is Blockchain?

A blockchain can be defined as a decentralized database where data is stored remotely over a wide range of computer networks by various operators or participants. Blockchain, also defined as a distributed digital ledger, differs vastly from a normal database system. This is because the information in a blockchain is stored in the form of blocks in all copies of data across various nodes or computers. They have their own unique address called hash codes.

The data entered in the blocks cannot be altered. If done so, this would change the hash code of blocks, and any tampering would be easily sighted. Therefore, blockchain technology has become a trusted source for executing secure and safe transactions. While any information can be stored in the blockchain, including transaction data, and supply chain data, it is used to store a variety of data throughout the world.


How Blockchain in Logistics Can Transform the Industry?

The supply chain and logistics industry deals with supplying and fulfilling orders from customers, locally and globally.  Without certain advantageous features of blockchain logistics, supply management can prove to be a difficult and vulnerable process to carry out.

Significant Benefits of Blockchain Technology in the Logistics Industry

Blockchain technology has been in great demand in the logistics industry recently. The blockchain supply chain industry was worth $253 million in 2020 since then it has seen a significant growth and is estimated to gain around $3272 million by FY 2026. Moreover, this technology has experienced a massive growth of around 37% in the logistics market recently. This clearly states how beneficial this technology is for supply chain management.

Here is what blockchain technology brings with it to completely transform the supply chain industry.

1.    Increased Security & Transparency

With the help of this technology, a secured and tamper-free record for every transaction can be maintained in the logistics and supply chain management industry. Since any tampering in the data will affect the entire blockchain, the chances of data manipulation are reduced to a great extent. Moreover, logistic companies using blockchain technology can also track the movement of their goods continuously in real-time. This further helps to ensure the goods are delivered to the desired customers only.  

Blockchain technology in logistics can help to increase the security of the industry in the following ways:

●      Prevent counterfeiting of luxurious goods by maintaining an original and tamper-free record for each good. This will detect any change in the transaction details and unique ID of goods that reach the end users.

●      Improves the authentication process through its public key cryptography method. This ensures that only authorized parties can access the highly secured data.

●      Improves the supply chain management by allowing real-time tracking of transactions.


2.    Improved Traceability

Tracing transactions is a great challenge for the modern-day logistics industry. But with blockchain technology, these transactions can be easily traced and monitored. Companies can even track the real time situation of their transactions and be assured of their successful fulfillment.

Since the data stored in blocks of a blockchain cannot be altered, storing the information of every transaction will make it easier to trace or recall at any time. Tracing of goods is an essential part of industries like food and pharmaceuticals, where blockchain technology can play a crucial role in monitoring the movement of goods.


3.    Increased Efficiency

The current logistics industry includes the involvement of a lot of intermediaries, such as banks and other financial institutions, to keep track of transactions and their revenue. This ultimately reduces the efficiency of the industry and makes it slow.

Blockchain technology in supply chain management holds the potential to eliminate these intermediaries by tracking and managing goods as well as transactions all by itself. This will increase the efficiency of the supply chain and will also make it fast and effortless. In addition to this, the overall investment cost will be reduced significantly.


4.    Ability to Create Smart Contracts

Blockchain technology promotes the use of smart contracts to ensure a hassle-free transaction process. These smart contracts are a digital form of the agreed terms and conditions between two parties. Since this data cannot be manipulated, it creates trust between both parties not to step away from the terms of the contract.

Thus, through smart contracts, false claims and fraud exchanges can be reduced and eventually eliminated.


5.    Eliminate the Need for Intermediaries

The logistics industry demands certain intermediary bodies, such as banks and other financial institutions, along with brokers and service providers, to streamline the entire process.

With the involvement of blockchain technology in the logistics industry, the need for such financial institutions will be reduced. With this technology, companies will be able to create a decentralized database to keep track of every transaction without the risk of data getting manipulated. This will not only increase transparency but also reduce the overall cost of the industry operations.

Although intermediaries might still play a minor role in the industry, blockchain technology will greatly reduce the dependency of the industry on them.  


Examples of Blockchain Being Used in Supply Chains

To better understand the use of blockchain in the logistics industry, let us consider a real-world example.

It was in 2017 that Walmart, a well-known food products distributor, decided to use blockchain technology and track the supply chain of its food products. Going ahead with the plan, Walmart started using the technology to track every transaction that takes place in the supply chain. Right from the harvesting of the food, until it reaches the end user, the entire process is easily traceable with blockchain.

This created an entirely transparent working environment in Walmart where all the parties involved could easily verify the data and trust each other. As a result, there was a significant downfall in fraudulent activities, and work was carried out with complete accuracy.

Thereafter Walmart expanded the use of blockchain technology to keep track of other products as well. This is a great example of how efficiently this technology can transform the logistics industry.


Impact of Blockchain Technology on the Logistics Industry

Blockchain technology has gained significant exposure in the logistics industry in the past few years. Moreover, the use of blockchain is expected to grow rapidly in the logistics industry in the years ahead.

A study states that its use in 2019 was estimated to be 55.3% in the logistics industry. However, it is estimated to rise by 39.78% between FY 2022 to 2027 and occupy around 94% of the industry. This technology is currently getting rapid exposure and recognition around the world, specifically in the logistics industry. Its impact continuously rises as the logistics industry discovers and implements its benefits.



To sum up, blockchain technology comes with an immense amount of potential to revolutionize the structure of the current logistics industry. While the technology can undoubtedly solve all the problems faced in the unorganized sector of the logistics industry, it will also increase transparency in the industry to establish more trusted and secure transactions.

Above all, blockchain for logistics has the potential to change the entire working environment of the industry chain with its unique decentralized data storage technique and immutable blocks.


What is the advantage of blockchain in logistics?

Blockchain offers a variety of advantages when it comes to the logistics industry. Blockchain in logistics creates a transparent and clean environment by maintaining track of every transaction. It also removes the role of intermediaries to prevent the overall cost of the industry operations.


What is the future of blockchain in logistics?

The future of blockchain shines bright in the logistics world. This is because it has the potential to solve almost every problem in the logistics industry, including transparency, efficiency, traceability, and security. Therefore, it will not only boost the logistics industry but will also ease the work of logistics chain management to carry out transactions accurately.


How can blockchain transform the modern supply chain?

The modern supply chain management process remains unorganized. It is susceptible to frequent tampering of data, human error due to manual execution of tasks, and a slow growth rate. With blockchain technology, all these aspects can be completely transformed. It will boost the speed of the industry by making things easier and safer.


Is blockchain a threat to the logistics industry?

No, blockchain technology poses no threat to the logistics industry. Rather, it can transform the logistics industry. It can eliminate all the problems of the industry and organize it towards secure and seamless growth.

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