Blockchain – I hear about it all the time, but honestly – WTF is it?
Blockchain is a way of ensuring the integrity of transactional data without having a central ‘system’ to do all the work. In other words, it is decentralised and all the ‘work’ of ensuring the integrity is distributed among its users. This means that a) the data is not held on a central server – it is distributed all over the network and b) its distributed nature means it is very difficult to ‘hack’ and alter the data.
OK… so what is a block and what is the chain?
A block contains a few things. Firstly, the transaction – it contains the event that has taken place e.g. transfer 1 coin from person A to person B. It also contains a link to the previous block. It then further contains something called a ‘hash’ which is a digital fingerprint of the block. If a person tampers with the transaction (or anything in a block), it renders the hash invalid. This is practically impossible due to the data being distributed in multiple places.
The chain is automatically created by each block having a link to the previous block.
So who uses it?
The main adopter is crypto currencies such as Bitcoin which rely on blockchain technology. The use here is to validate and guarantee the auditability of transactions that happen without depending on a central bank or authority. Blockchain was actually invented in 2008 specifically to support Bitcoin.
OK I think I understand now, so what is the relevance to transport & logistics?
Well – let’s say you are ordering something from a website and the item is coming from China. That item will pass through many, many pairs of hands, companies and systems between the sender and you creating tens probably hundreds of track and trace events: The sender
- The sender
- Local network carrier
- International carrier
- Exports customs
- International shipper
- Local UK customs
- Domestic delivery carrier
Each one of those parties will move the item at least once, with some parties (such as the carriers) having 8+ track and trace events.
If there existed a global tracking blockchain, then this information would be distributed, available and tamper free from beginning to end, rather than the current rag-tag mish-mash of data from systems which may or may not be available and may or not talk to each other
It’s not a scenario that causes people real pain in today’s world and systems belonging to major carriers are very rarely unavailable. But it is a nice clean solution.
To make it happen – every party from beginning to end would need to agree on and to fully adopt a standard blockchain model. If ALL parties in the process don’t adopt and implement the same technology – it is worthless. Are all carriers around the world going to agree on and adopt the same blockchain technology? It’s extremely ambitious and unlikely, so the probable answer is no.
Is the transport and logistics world missing out on a revolutionary ‘thing’ as a result? No.
So bringing it back to my business, is it relevant to my sameday courier business?
In summary NO.
Pure sameday courier by its nature is mostly point to point and therefore doesn’t get lost or necessitate a complex track and trace solution (sender -> courier -> recipient) so a blockchain type solution is irrelevant.
If you are fulfilling the final mile component in a bigger chain which is someone else’s e.g. you are doing sameday distribution on behalf of someone else (Amazon style) then having track and trace adds value to the overall solution for your customer. In this case (as per the international example above), there is a use case for blockchain, but the real-world benefit is negligible.
Conclusion and your thoughts?
Blockchain is a clever solution looking for a problem to solve. The revolution hasn’t happened (beyond crypto currencies) in the way the technology proponents thought it would do. In the same way RFID never conquered the track and trace world (despite many clever examples of its implementation) – the advocates will obsess over finding a use-case for the technology in T&L.
We are constantly assessing new technologies and re-evaluating existing ones to see if we can find clever uses for them which makes the sameday world a better place. There may be a discovery in the future that makes absolute sense but as of today, blockchain doesn’t add any value to your courier business.