The progress in technology development doesn’t stand still, constantly trying to improve user experience in every field – no exception for the logistics industry. Everyone is talking about the application of digital technologies to freight rate management which has to revolutionize the business, and many industry players are getting lost in the amount of information on the subject.
At the same time, nobody wants to miss out on the next ‘UBER’ that will disrupt the traditional industry with the brand-new business idea based on the brand-new modern technology.
We have prepared an overview of the ‘hyped’ technologies, using simple words.
This is the first article in the cycle about the future of automation and security of logistics transactions. We will cover the most modern technologies and their potential application to freight rate management.
Part 1: What is Blockchain and why is there so much hustle around it?
Blockchain is a technology created as a modern XXI century alternative to the transactional market reality. The increased risk of fraud and extortion has pushed the IT community to develop a secure transaction system. It turned out to be a possibility of business disruption from different points of view.
Blockchain is a modern technology that uses the opportunities offered by the modern IT world. The beginning of its popularity was directly connected to the virtual currency Bitcoin. However, it soon became apparent that blockchain has many more applications and can serve as an effective security shield for any business transactions, including online freight transactions.
How does the Blockchain work (in very simple words)?
Let’s look at a very simple example. Imagine that you have a shared drive with your colleagues. You just saved an Excel spreadsheet there with the list of your company’s transactions and shared access with your colleagues. They can open & review the file you’ve shared. They are also free to add new data, but they can’t make any changes to the information which is already there. As a result – the data is open and shared, but at the same time, it is also safe and secure. This is how the blockchain works in short.
Why is it called Blockchain?
The technology is called ‘Blockchain’ because it consists of a chain of blocks. Each block represents a piece of data. Blocks are connected in chronological order and are linked to each other.
How does the Blockchain really work?
There are a few things that you should know about the Blockchain:
- No data manipulation is possible
There is no central authority to control or manipulate the data. This allows for data exchange to be made directly with third parties.
- The data is crypto-safe
Cryptography is used for the security services
- Deleting the data is not possible
Once the block is added, it’s there forever – again, no manipulation possible.
All the parties involved have to validate the data in the block. No one is in control means that everyone is in control.
In the next post, we will cover the possibilities of blockchain applications in logistics software and sales automation tools. Stay tuned!