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Blockchain in the Logistics Sector – Making a Real Difference

Blockchain in the Logistics Sector – Making a Real Difference

The blockchain logistics sector is one of the fastest-growing areas of interest. Already, major firms like IBM have put forth millions into integrating blockchain tech into the market. This desire to innovate coupled with a need to reduce inefficiencies in the sector has made blockchain logistics a top priority for some of the largest firms in the world. Here’s how this tech is helping to improve the lives of millions already.

What is Logistics?

Logistics is a term used to describe the business of taking products from manufacturers to the market. It encompasses a dynamic range of services from shipping, tracking, distributing, and securing items. As such, analysts predict the global logistics market to reach USD 15.5 Trillion by the year 2023 in terms of revenue. As one of the largest industries in the world, the logistics sector is an area of concern for many reasons.

Logistics Statistics

The logistics sector is one of the largest and fastest-growing industries in the world. According to recent reports, 2022 saw massive growth with the freight market hitting +$15B in profits this year. Analysts have predicted the market to grow 4% annually for the next 3 years.

How Logistics Demands are Changing

This year saw even greater demand for end-to-end delivery services. These are networks that get products to customers’ homes rapidly. E-commerce giants like Amazon continue to push the boundaries of logistics with services like 24-day delivery service. These users want fast and low-cost delivery globally.

Pushing the boundaries

The constant search for ways to improve the logistics sector has helped to drive innovation across multiple markets. Robotics, AI (artificial intelligence), VR (virtual reality), and Metaverse technologies are all seeing innovations thanks to these demands. For example, Amazon has integrated robots into their shipping warehouses.

These robots are designed to improve efficiency by providing 24-hour support and delivery services. The concept has seen many iterations with Amazon pushing for high-tech drone deliveries in the near future. The integration of all of these techs with blockchain systems will provide the boost to efficiency that is needed for the new economy.

Problems in the Logistic Sector

There are a lot of inefficiencies in the sector. The logistics market is currently composed of thousands of independent systems. These systems often intertwine digital and paper records as many of them have been in use since the early ’70s. Consequently, they lack the efficiency of blockchain networks. Here are some of the main ways blockchain technology is changing the logistics sector forever.

Too Much Data to Sort

One of the biggest problems with the logistics sector today is simply there is too much data to sort promptly. Data overloads occur due to the various ways in which firms track merchandise and services. They result in delays and companies missing out on timely data resulting in additional losses.

Today’s massive logistics networks can include thousands of different groupswhen you combine this fact with all the products sent daily internationally, it’s easy to see how the data sorting requirements are too much for today’s centralized options. Only a distributed ledger could support the level of monitoring required to stay on top of these massive networks.

Blockchain technology enables near-instant consensus. These networks require each node to verify the state of the network in real-time. The system can then utilize each of the node’s inputs to create an overview of the entire network. Blockchain networks are a great way to transfer massive amounts of data instantly in a peer-to-peer manner and share network statistics globally.

No Distributed Way to Monitor

The current approach to logistics is scattered. There are islands of information and agencies that don’t exchange data directly. Most of the time these systems operate using different mediums and require some form of data transference which also adds to data delays and fraud.

Distributed ledgers enable all members of the logistical equation to collaborate in real-time. A shared distributed ledger would be ideal because it would give all parties a location to store important information regarding the product and its state, location, and validity.

Lack of Transparency

The current setup leaves the consumer completely out of the loop. Buyers have no way of ever seeing where and when their products hit the shelves. This lack of transparency has led to higher rates of fraud in the logistics sector. Blockchain networks can provide a new level of openness to the market.

Anyone could use a Blockchainexplorer to cheaply and easily certify the state of a product. Blockchain networks provide immutable data to the ledger. As such, it would prevent fraudsters and scammers from changing key details to alter the audits. Adding transparency to the sector will improve all aspects of the logistics sector and lower loss rates.


When you have a variety of different systems attempting to exchange information in a timely manner, it is expensive. In many instances, the data conversion requires another party to be involved to streamline the process. Sadly, this approach adds to the overall costs of doing business at nearly every level.

Blockchain-based logistics systems can operate in a p2p manner. The open nature of these networks and their flexible structures can ensure that the network is energy efficient and has very low operating costs. It is much cheaper to leverage a blockchain logistics system compared to today’s best-centralized options.

Also, blockchain networks can monitor massive amounts of data without delays. The use of blockchain consensus and network sensors enables firms to track the entire logistics system in near real-time. Even today’s best logistics systems can’t compete with this as they require massive amounts of manpower to operate.


Censorship is another issue that logistics firms are dealing with currently. As political tension converts into hostilities, there will be more firms that are left in the dust due to factors outside of their control. A decentralized logistics sector could support a more robust and open economy.

In the future, it could become more difficult to ship items that are deemed politically incorrect or out of touch with a current beliefs. Blockchain logistics options could be a smart way for people to ensure their voices are heard. It would also open the door for more concepts to hit the market.


Another major issue for the logistics sector is the rising amount of fraud. Fraud and counterfeiting are major issues for suppliers when discussing name brands clothing, electronics, and more. However, the risks are upped when discussing counterfeiting medications. The latter has seen thousands of people die yearly.

Blockchain technology enables firms to confirm the authenticity of products in real-time. They can even utilize NFT (non-fungible token) tech to ensure that each product is accounted for and untampered with. This information could be made available to merchants, vendors, and consumers which would provide another layer of transparency to the market that could help to save lives and money.


Delays in data ascertain and transmission cost companies billions in losses yearly. Blockchain technology enables firms to transfer data in a permissionless manner globally in seconds. This data can be proven to be unaltered and in its original state making it more valuable than traditional centralized digital information.

A delay in shipping food items can result in serious injury and losses for firms. In the past, there have been logistic firms that have smudged the dates of produce and other foods to prevent losses. These actions resulted in consumers purchasing unhealthy items. Some of these items had their labels changed to appear still valid.

The problem is exasperated when discussing medicines. The fraudulent medical sector has now reached billions in losses and thousands of deaths yearly. Many of these injuries could have been avoided had the logistics been able to verify the true data and validity of these medications.


Another major advancement that has the potential to upend the entire market is the merger of IoT (Internet of Things) and blockchain technology. The IoT includes all of the smart devices around the world. There are already billions of these devices in operation. To be considered a smart device an item must have a censor and the ability to communicate data to the internet. Everything from your Tesla to your electronic thermostat can fall into this category.

How IoT Solves Many of These Issues

IoT sensors are the perfect match for blockchain logistic systems because they streamline the process of taking real-world data and transmitting it to the blockchain. IoT sensors can also function as oracles. Oracles are off-chain sensors that communicate data to and from blockchain networks. They can leverage consensus to better monitor network conditions at minimal cost and autonomously execute smart contracts based on the state of the network.

Tracking Agreements

Sending an item across the world requires multiple firms to make agreements regarding their portion of the trip and responsibilities. These agreements can be done electronically or on paper but both require time and must be stored safely or risk loss. Additionally, it is easy to alter these records at a later date as the majority of centralized systems have no way of showing who accessed their systems and what changes were made.

Blockchain logistic firms can leverage smart contracts to improve trackability across the board. This technology enables retailers and logistics companies to enter binding agreements that immediately dissolve if either party fails to meet their responsibilities. These decentralized contracts increase transparency and profits. They also help to reduce delivery times and costly human errors.

How AI and Blockchain Technology is Driving the Next Generation Platforms

Another powerful way in which logistics firms are gaining a better understanding of their inefficiencies is via the integration of AI (artificial intelligence). AI provides companies with real-time insight into all of their shipments globally and locally. Companies like Slync are pioneering this sector. Their services reduce workflow, help the firm anticipate potential delays, and gain a better overall view of their operations.

COVID-19 Changed Everything

The sudden and unexpected entrance of COVID-19 into the market shut down international trade for weeks. Unfortunately, another major downside to today’s centralized logistics systems is that they are not that easy to shut down or restart. As such, the world is in the midst of shortages of a variety of products. In some scenarios, these products are just sitting in cargo ships offshore waiting to be unloaded.

COVID – Recovery Drives Growth

The rollback of COVID-19 pandemic quarantines and lockdowns has sprung the logistics sector back into overdrive. Firms are now seeking new technologies as it has become evident that the legacy options would cost more to start back up than upgrade. The integration of high-tech options will lower costs which could result in lower costs for consumers.

A blockchain-based logistics system could monitor products in real-time and could be more easily adjusted to accommodate the required changes at a minimal cost. Consequently, the pandemic has only upped the desire of firms to integrate blockchain tech into their logistic processes.

War Logistics

War has always driven innovation in the logistics sector. It’s often said that logistics is what wins wars. While all the movies highlight the front line, little attention is paid to the massive logistics setup behind the war machine. This year could see militaries seek to leverage blockchain efficiency to try and bring some much-needed oversight to their spending.

Aside from the efficiency, the military would enjoy more security. Blockchains have an advantage over the current systems in that they can report if they have been altered and by what address. Unlike a normal logistics system that would only reveal information following a discovery, blockchain logistics systems could show what was altered and even viewed.

Blockchain Logistics in 2023 – The Games Have Begun

The Blockchain sector is eager to see more Blockchain integration. As such, you can expect to see more platforms launched in 2023 to combine advanced technologies to streamline international logistics. For now, the market is in the midst of a major transformation as these protocols enter service.

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