ECLAC, the economic commission for Latin America and the Caribbean, prepared a new report where he reflects on disruptive technologies, opportunities and challenges that the implementation of the blockchain technology may have on the competitiveness of the region. Prepared by researchers Díaz, Rodrigo Mariano, Valdés Figueroa and Luis Pérez, Gabriel the bulletin highlights the positive impact that Blockchain technology can have on business logistics processes, as well as on the operation in the transportation industry.
The newsletter is structured in six modules and highlights a set of recommendations for both public and private actors regarding the blockchain. Over time, numerous studies ensure that the use of blockchain technology in logistics makes the tracking of some important or high-value cargo much more genuine, since buyers can have all the information of origin and the paperless ownership history involved.
In addition to all the product information registration, from the manufacturing process, tracking and delivery, along with sensors, QR codes, transponders and NFC stickers, which also provide guarantees of compliance with regulations.
In the particular case of trade and logistics, digital transformation is causing far-reaching changes in business models, where the borders both between actors and between countries are increasingly blurred and competitiveness puts more and more value on the quality of services over their prices.
Blockchain and its opportunities for international trade
The report indicates that, in each international trade operation hundreds of operations are generated that as they are carried out, are registered in the systems of each participant. Throughout the entire logistics chain, this data is replicated in the systems of each participant, where many times the information is even redigitalized to enter it in a new system.
In the case of Latin America and the Caribbean specifically, it is estimated that 75% of exporters re-enter the data in their systems and then present the documents printed on paper before the respective commercial authorities. Having multiple records often leads to errors, time lags in information, delays and inefficiencies, and even possible fraud.
Blockchain can lower trade logistics costs
Since blockchain contains a single shared and verified version of the data, an adequate implementation of this technology can provide the same information to all participants, eliminating the need for a centralized authority, reducing the volume of paper (paperless trade), time, costs and complexities that arise from commercial bilateral communications.
The bulletin published by Cepal, shows that the Blockchain is one of the most promising technologies within the group that make up the fourth industrial revolution. This is because, regardless of the size of the logistics actor or its location within the value chain, there is a high probability that its processes or the data generated will use this technology very quickly, either directly or through applications that use blockchain. partially.
They point out that its use in logistics activities promises to reduce the handling of information on paper, improve controls, reduce failure rates in dispatches and allow smart contracts that are self-executing when the conditions established by the parties are reached. Along with this, it is expected that a proper implementation of this technology can substantially reduce trade frictions related to cross-border controls, simplifying and making trade logistics operations cheaper.
Blockchain applications in the logistics field
For its part, blockchain technology is interesting to improve the confidentiality, integrity, and availability of commercial information and logistics processes, favoring cooperation between dispersed actors.
These potentialities have driven the appearance of developments and initiatives related to blockchain especially oriented to the logistics sector such as CargoX, Tradelens, CargoSmart, dexFreight, and others, that seek to generate digital solutions for the management of cargo documentation, the traceability of certificates of origin of products, facilitate financial exchanges, take advantage of the Internet of Things (IoT), contract automation, among other multiple applications that are being developed and that will see the light soon.
In short, the contribution of blockchain technology in logistics is that everyone has access to the information they need to know or know in real time. Therefore, all the information that is provided from the distribution of the product is added to the data that is already in the production of the product. All safely and reliably.
Decision tree for the use of Blockchain technology in a determined company
However, despite the numerous benefits that technology brings in different areas, this report also highlights a practical diagram which is recommended to be tested by the user. Since through it it will be possible to identify if a certain business organization really needs the implementation of Blockchain technology within its processes in business logistics. While it is true that Blockchain can solve, simplify and lower costs and processes, it is important to remember that not everything can be applicable, or rather, it is not always necessary. For this reason, it is important to carry out a preliminary study to really determine the execution parameters.
Now, the decision diagram shown in the report allows you to analyze in 10 steps if blockchain is the most appropriate technology for your requirements. Questions like Is there a need for a distributed database? Does it involve multiple actors? Do those involved have conflicts of interest and / or reliability problems? are some of those that make up the test.
At the end of the report, they highlight that despite the benefits that blockchain technology can have by itself, it would not be enough if there are other types of failures in the business organization. For this reason, they reiterate the importance of first analyzing the problem from the need of the business and not from the benefits of technology, having in mind “that blockchain is a technology with particular characteristics within a set of technological solutions “.
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