As a result of rising e-commerce, the demand for global shipping is at an all-time high. Freight lines have been forced to increase staffing volumes by nearly 20 percent, and trucking companies and warehouse operators created more than 15,000 jobs in July alone.
Yet as the demand for cheap and efficient delivery of goods rises, supply chains are suffering the consequences of inventory pileups. With the world’s commercial storage almost at its limit, many companies have had to find new ways to combat rising costs, streamline time delays, and eliminate inconveniences in the supply chain. Blockchain, the decentralized technology backing most cryptocurrencies, might just be that solution.
Blockchain technology is a decentralized ledger of information that can be used to input data along the supply chain. Unlike traditional recordkeeping, blockchain ledgers are immutable, meaning that information can be added to, but not edited or deleted. For organizations liaising with multiple vendors, blockchain holds tremendous value by using metrics to optimize best practices in real time. It’s an innovation set to revolutionize the way that modern retailers understand manufacturing, optimizing the use of storage capacity by eliminating bottlenecks in the system.
Blockchain can provide three different, but equally important, solutions to this problem. Firstly, it can increase liquidity for stored resources by releasing much of the working capital currently tied up in the supply chain. Using smart contracts, businesses can form trusted relationships with intermediaries, creating frictionless trade between buyer and seller. With faster payments, companies can ensure that products aren’t held in storage for longer than necessary. No longer will they have to cut through excessive red tape in order to obtain their accounts receivable, because transactions will occur instantaneously.
Secondly, blockchain allows for the sharing and monetization of underutilized assets, including trucks, planes, and cargo ships. There is an enormous missed opportunity for corporations to utilize untapped resources from the larger network. Millions of square feet of warehouse space are under the control of companies that don't use it, and thousands of trucks are carrying less than full loads. However, with blockchain technology, companies can form meaningful connections with third parties in a way that promotes fair and equitable asset sharing.
Finally, and perhaps most importantly, blockchain provides greater transparency for companies looking to expose vulnerabilities along the supply chain, allowing them to minimize communication lags between trade partners. Picture blockchain as a decentralized accounting system that automatically tracks storage capacity, delivery times, and product liabilities at the touch of a button. Here, employees at all stages of the corporate ladder can input verifiable information onto the blockchain, which can then be used to gain a more detailed picture about vulnerabilities in the system. Companies can then extrapolate this information to highlight red flags, and ensure that storage space is being maximized to the best of its ability.
Ongoing growth in e-commerce isn’t going anywhere anytime soon. Society’s focus on convenience is only going to increase, and companies will need to continue to expand their storage capabilities in order to keep up with the pace. The simple fact is that companies cannot build out their infrastructures in time, and need to find another way to increase efficiency before it’s too late. Instead of buckling under the the pressure, they should find new ways to rise to the occasion. Through blockchain, this is more than a possibility; it’s a reality.
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