Blockchain’s immutable, interoperable properties are often touted for their potential to transform various industries, from global trade and energy to real estate and digital ID. This is why HEALE has chosen to apply blockchain to logistics – we believe the industry is riven with long-standing inefficiencies that this technology is uniquely equipped to solve.
While HEALE’s solution is at the forefront of blockchain application in logistics, the idea that web3 tech can solve many of the industry’s pain points is not new. So, why haven’t we seen a solution emerge that does just that? And what makes blockchain the right fit?
The Rise and Fall of TradeLens (And Others)
On the face of it, distributed ledger technology is tailor-made for logistics. Inherent features such as transparency, cryptographic security and decentralization suggest a logistics-focused network would benefit from multiple efficiencies, such as accurate asset tracking, a tamper-proof record of ownership/shipment activity, and traceable (not to mention borderless) transactions.
In truth, there are dozens of advantages to bringing web3 to logistics – we discuss many of them in our freshly updated whitepaper. It’s just a question of combining the constituent parts – network, smart contracts, crypto, Self-Sovereign ID, Zero-Knowledge Proofs, etc.– to deliver value for all parties: shippers, freight brokers, truckload carriers, drivers, ELDs, TMSs, etc.
Although critics may argue that the failure of other blockchain logistics projects – including Maersk and IBM’s TradeLens – show such advantages to be illusory, we disagree. These solutions failed because they lacked scalability, and in some cases, stakeholders didn’t trust competitors to operate the platforms neutrally. But blockchain has come a long way since the rise and fall of many of these ventures, and the industry’s aversion to a tightly-controlled centralized solution has been duly noted.
Although many blockchain-based logistics solutions have come and gone, it’s crucial to note that there is an evident appetite for web3 solutions – provided they can assuage the concerns of stakeholders, achieve the necessary scalability, and enhance existing operations without requiring a huge investment.For instance, in the case of TradeLens, we should note that the project was not a total flop: in four years it tracked nearly 4 billion events and processed over 70 million containers, with 300 clients (ocean carriers, port operators, customs authorities, etc) onboarded.
Data and Security – Two Potential Areas of Improvement
There are many reasons why logistics needs web3. But let’s focus on just two areas: data and security.
Data is the DNA of logistics. Without data, goods simply wouldn’t move from A to B. But logistics has a data standardization problem. Adopting standards and best practices that would benefit the entire industry is prohibitively expensive, with the cost of change perceived to be higher than the cost of staying the same. Thus, the majority of players (distributors, intermodal providers, etc) stick with their own internal systems and data formats.
Expecting global logistics to operate efficiently amid so many incompatible data systems is foolish. The lack of standardization results in suboptimal data exchange, inventory discrepancies, fulfillment delays, increased processing time, and inaccurate production schedules. The Data Warehousing Institute estimates that bad data costs logistics companies over $600 billion a year.
That’s problem one. Problem two is security. Documented strategic cargo theft events increased 430% year-over-year in Q3 2023, with a significant uptick in identity theft, hostage loads, late shipments, and other kinds of criminal intelligence records. Malware continues to be used by bad actors to interrupt supply chain processes and steal sensitive data. This problem is compounded by the amount of unsophisticated legacy infrastructures still used in logistics today.
With an open and secure decentralized logistics network that all stakeholders can plug into, without having to trust a third party, both of these issues can be addressed. HEALE’s ZK-powered blockchain benefits from tremendous scalability, incentivizes all parties to use best practice and share data, and employs end-to-end encryption. The outcome is reduced costs, improved shipment visibility, streamlined coordination, and increased profitability.To find out more about how HEALE can transform logistics for the better, visit https://healelabs.com/.
