Can the Use of Blockchain Revamp the Logistics Industry?

The logistics industry’s vastness raises numerous challenges that are holding it back from becoming a smoothly-functioned one. Some of the many issues that the logistics sector faces include high dependency on paperwork, lack of trust and transparency, and delay in consignments and payments. There has been an attempt to make the shipment process a lot smoother with the implementation of many technologies.

However, none of the technologies has made a substantial impact. But now, with blockchain technology, there is a possibility that the logistics industry can be revolutionized. Implementation of blockchain in logistics has many potential applications that can mitigate all the logistics industry’s inefficiencies and issues.

What is Blockchain?

Blockchain is a decentralized ledger technology to store digital information in the form of a chain. Every blockchain block consists of digital data that can be transacted or used to create smart contracts and decentralized applications. There is no central management body in a blockchain network, and every transaction is recorded in the chain after verification from miners. Hence, it is immutable by nature and the most secure and transparent technology out there.

These features of the blockchain network make it a perfect match for the logistics industry. With the use of blockchain in logistics, you can easily upload all the paperwork on the network, and anyone can access it from anywhere in the world. This can make logistics a completely transparent process and eliminate any middleman’s need to handle the paperwork. Various other blockchain applications in logistics can mitigate several problems and act as catalysts in the industry’s growth.

What are the different blockchain applications in logistics?

From improving efficiency to simplifying tracking, everything can be done with the help of blockchain. Now, with the emergence of the Ethereum blockchain and other blockchain networks, you can also create smart contracts to automate payments and transactions for delivered consignments. Let’s go through all the potential blockchain applications in logistics.

1. Enhanced shipment tracking

The condition of shipments and the products within has always been a significant point for disputes in logistics. By bringing blockchain in logistics, we can simplify the process of tracking products. All the concerned parties can easily track the shipment status on the network throughout the supply chain. This can reduce the condition-related disputes in the logistics industry.

Blockchain can also be used with other modern-day technologies such as AI and IoT to make shipment tracking even more effortless. For instance, IoT and blockchain together can help monitor a container’s temperature throughout the supply chain. This can be especially useful in the transportation of medicinal drugs and other pharmaceutical products. Medicines are supposed to be kept within a temperature range. IoT can determine the container’s temperature and update it on the blockchain network to update all the concerned parties with the relevant information.

2. Automated payments

Smart contracts are one of the most useful applications of the blockchain. They include all the necessary information in the form of codes. They can consist of all the protocols and agreed-upon terms in the way of smart contracts, and they will be automatically enforced on all involved parties. When certain conditions are met, smart contracts can trigger transactions. This blockchain application in logistics can eliminate all the payment and delayed shipment problems.

Both the sender and receiver can agree on the necessary terms such as change of custody or delivery date range and set them in smart contracts on the blockchain. When the consignment is delivered, the ledger will be updated, and if the date is within the decided range, it will trigger the automated payment transactions. On the other hand, if the consignment has arrived late, the smart contract can reduce the pay according to what was decided and pay the remaining balance to the vendor.

3. Mitigated paperwork

This can be stated as one of the most effective uses of blockchain in logistics. The logistics industry relies heavily on paperwork, as digital records can be easily altered. Mis-placement or loss of a single piece of paper can delay the delivery or result in the entire consignment’s cancellation. The use of blockchain here can help upload all the paperwork on the immutable network. Every block on the blockchain network is reliable and secure.

With all the paperwork and invoices uploaded on the blockchain network and the transaction history visible to all, there would be close to zero invoice disputes. All the relevant parties can easily tally all the invoices with their respective payments using this network.

4. Improved security

Fraud and theft have been heavily impacting the growth of the logistics industry. Blockchain technology can quickly eliminate this problem with its secure ledger. With blockchain in place, you can create strict protocols for transferring the goods or carriers’ possession from one person or team to another. 

For instance, you can record and upload ID proofs while handing over any consignment to another person and ask all the members and parties to do the same. If any fraud occurs during any time in the supply chain, you can check the history and find the culprit. This will make transporting goods very secure. 

Checkout: Blockchain Project Ideas


This blockchain application in logistics can increase trust and reliability among all the parties involved in the transportation, thereby increasing transparency in the system.

Not just among the B2B parties, the use of blockchain in logistics can also increase trust and transparency with end customers, thereby fostering the industry’s growth. It is the logistics industry and every other industry in the world that has witnessed blockchain technology’s potential. Every business out there is planning to leverage the benefits of the blockchain network. This has caused a surge in blockchain careers. I

upGrad offers various online courses in collaboration with world-renowned institutes that can help you learn every bit about blockchain. Some of the courses you can start with are:

1. PG Certification in Blockchain Technology (upGrad and IIITB)

2. PG Diploma in Software Development with Specialisation in Blockchain (upGrad and IIITB)

3. Executive Program for Blockchain Technology Management (upGrad and IMT)

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