Freight, logistics and trade keep the whole wide world moving. In the U.S. alone, these aspects of industry accounted for nearly $1.5 trillion annually according to data from 2015. The economies of the world are scaling up, and that is only projected to grow as we rely more heavily on international supply chain for our products.
UPS believes that part of that part of the path towards cheaper and more accurate logistics can be found in blockchain technology. They announced they would join the Blockchain in Transport Alliance (BiTA), a forum for education and development for blockchain technology for the shipping industry. UPS as well as other major companies are banking on being part of the blockchain revolution when it hits.
Why the curiosity about blockchain? The short answer is this: the logistics industry is not prepared for the predicted growth. Right now, it is perched on crumbling infrastructure and inefficiencies in operation while being vulnerable to fraud. Endless middlemen slice and dice into profits with fees that drive up the price of shipping. However, it’s tough to put checks and balances in place because the system is opaque and complex.
Not only that, there is a serious need to find ways to reduce shipping costs. Cargo theft is estimated by the FBI to cause a loss of $30 billion per year with an average theft value of $190,000.
For consumers, this means spending 20% more for goods. Distributed ownership has eliminated the accountability necessary to solve this problem, despite the fact that it has been well documented.
Blockchain, experts say, will revolutionize how shippers like UPS track, organize and execute the needs of supply chains in future years.