Report Released Analyzing Blockchain in Supply Chain
By Alex Batty, MHI Marketing Communications Coordinator |@
Earlier this year, I set about trying to figure out what the heck blockchain actually was and why everyone was talking about it. Because it’s not going away. And apparently Morgan Stanley agrees.
In a recently released report titled “Blockchain in Freight Transportation: Early Days Yet but Worth the Hype”, the research foundation discusses the idea that blockchain technology has the potential to join other automation technologies as “a key disruptive technology that can bring operating and cost efficiency to supply chains – while also being a threat to existing asset-light business models.”
So good and bad. Like most other technology.
Blockchain is considered much more secure because it has a visible data chain – which makes it hard to make unwanted changes. The interconnectedness of the data also makes it efficient, which is really important in next-generation supply chain.
As a reminder, blockchain is still relatively new, and Morgan Stanley points out that there are still more questions than answers a this point, but this is what they’ve been able to extrapolate.
Blockchain is a way to connect things, to make them visible and efficient. As a result of increasing use of blockchain, 3PLs may find themselves under pressure. For example, shipper-carrier matching services will have to increase efficiency and cut costs as blockchain demands visibility and efficiency.
One benefit of blockchain is in financial security. Because it uses auto-executing smart contracts and a public/distributed ledger, companies can operate on a “trustless” basis, where no central copy exists and no user is trusted above another. All parties can just move forward and blockchain handles a lot of what would become red tape.
Blockchain can also increase product quality and track big data. Maersk uses it to track millions of shipping containers and Walmart uses it to monitor food supply chain to prevent massive recalls.
Morgan Stanley outlines what blockchain can do for supply chain. By standardizing payments, verifying product quality, and optimizing cargo capacity, it can increase supply chain transparency in giving real-time visibility from pickup to delivery and increasing accountability while reducing costs.
Morgan Stanley claims that blockchain will eventually be able to automate the tasks 3PLs usually provide at lower cost and higher security. 3PLs most likely won’t be eliminated completely, but will have to scramble to keep up with the potential of blockchain.