The Next Big Disruptor

Its tamper-proof design and unparalleled transparency enables decentralised, digital and trusted transaction. Blockchain is set to change the way the world does business and why blockchain will transform the logistics industry.

- Reji John

Economists have been exploring people’s behavior for hundreds of years. They study how people make decision; how they act individually and in groups; and how they exchange value. They also study the institutions that facilitate trade, like legal systems, corporations and marketplaces. But today there is a new, technological institution that will fundamentally change how we exchange value, and it’s called the blockchain. It is said that blockchain will revolutionise trust on a global scale and the implications are huge. When blockchain technology turned from a geeky thing into a buzzword for major businesses a few years ago, it was only a matter of time before it expanded far beyond finance into other industries. Its advantages, like tamper-proof design, utter accountability and unparalleled transparency, have drawn attention from stakeholders of very diverse industries, including logistics.

The concept of a blockchain – a distributed, tamper-proof and time-stamped database of transactions that can be managed without intermediaries – is highly attractive in the supply chain domain, and the industry has launched a number of proof-of-concept initiatives.

In logistics, the best known blockchain pilot programme involved Maersk and IBM. It centered on creating a digital distributed ledger to create a single electronic place where all the myriad documents related to a shipment could be housed.

Coming at a time when the Danish shipping giant Maersk accounts for 15.8 percent of the world’s global shipping fleet traffic has experienced a sharp decrease in annual revenue, the application was designed to help save costs by moving the expensive and time-consuming paperwork between each of the counterparties to a blockchain-based smart contract system.