The opportunities within the use of blockchain for bill of lading in international trade, especially e-commerce, are significant. According to The LoadStar, the first ocean container use of a blockchain-based bill of lading was released successfully in the port of Koper, Slovenia. This resounding trial and win signifies a new way shippers will be able to compete in the global market, speeding delivery of international shipments, enhancing existing supply chain operations, and more. To stay competitive, shippers need to understand the current challenges of using blockchain in e-commerce, how it can benefit the e-commerce supply chain, and a few best practices for using blockchain to move toward a seamless, omnichannel experience.
Challenges in Using Blockchain in E-Commerce
The difficulties of blockchain depend on the source questioned. On the surface, blockchain is a relatively new technology, and its use in various applications, like the CargoX Smart Bill of Lading, is even more innovative. Unfortunately, the best blockchain-based e-commerce initiatives in the world are only as valuable as the sum of its users. In other words, blockchain suffers from a lack of use problem. Fewer users of the software diminish its ability to reduce fraud, increase trust, speed international shipments, and save money, says APPSeCONNECT. In other words, the technology will continue to present challenges until its use becomes a standard in global and domestic trade.
Blockchain for Bill of Lading, Payment Processing and Traceability Brings Opportunities
When blockchain reaches maturity, it will no longer maintain its namesake; it will just be a standard way of ensuring traceability in the supply chain. This is how its value will be portrayed, and its key benefits reflect this change in attitude.
For example, consider these benefits of using blockchain for bill of lading standardization and more.
- Standardized practices will reduce delays when crossing international borders.
- Increased use will reduce fraudulent, counterfeit products.
- Automated payment processing will reduce instances of payment fraud, prevent documentation issues, and increase the accuracy and validity of all transactions, asserts Abhishek Raval of Express Computer.
- Reduction in costs and hassle associated with cargo insurance claims filing and processing, says CargoX Founder and CEO Stefan Kukman.
- Use for transparency and traceability for buyers, marketplaces, sellers, and consumers, unifying the history of a product from procurement to end-users, as well as throughout returns, if necessary.
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Best Practices for Using Blockchain to Improve E-Commerce Supply Chain Processes
As explained by Giri Devanur of Forbes, the value-add of blockchain in the global supply chain will exceed $173 billion by 2025, so shippers that take notice of the technology now, despite its limitations and novice nature, can position their organizations to win with blockchain in the long-term. The technology is expected to be a significant disruptor of standardization and traceability in the e-commerce supply chain. Instead of succumbing to the disruptions through the use of blockchain for bill of lading standardization and cohesive e-commerce supply chain standardization, shippers should follow these best practices:
- Stop working on in-house blockchain technology hopes. Decentralized data is the hallmark of the blockchain, but companies working to develop in-house blockchain platforms will face a problem. The growth of blockchain will require the broader adoption of the same platform to derive its real value. If every company develops an in-house solution, it will be no better than the traditional means of tracking shipment data.
- Define your minimum requirements for blockchain technologies. Since companies will need to consider outside blockchain solutions, like CargoX’s platform, it is best to identify the minimum requirements for system use in your facility. Start small, but embrace the opportunities of the future. In other words, don’t try to deploy blockchain-based technology overnight. It will take time to explore its full potential.
- Upgrade existing systems to leverage connected devices and the Internet of Things. Blockchain relies on a robust data collection and aggregation process, so connecting existing systems now will be a significant precursor to the use of blockchain in the future.
- Integrate e-commerce and traditional supply chain systems. It is also essential to connect systems, enabling the seamless flow of data between systems and enhancing operations. Essentially, the open-standard architecture necessary to integrate systems will allow integration with future blockchain solutions.
- Consider OTS available blockchain solutions. Off-the-shelf (OTS) blockchain solutions will be the easiest way for shippers to leverage blockchain’s value. Since e-commerce demands continuous growth, all systems must enable scalability. In addition, look for methods that validate contractual requirements, also known as smart contracts in blockchain, which can be an extra benefit for companies building a business case for the use of the new technology.
- Choose a system, and stick to it. Use the list of minimum requirements in step two to find the system that will enhance your operation. However, your needs may evolve, so choose a vendor that understands the nature of an evolving blockchain-based supply chain. In other words, look to companies with a history of continuous improvements, such as Cerasis and CargoX.
- Encourage supply chain partners to adopt the same blockchain-based systems. The most significant value in blockchain exists through its wide-scale deployment. Shippers that promote a specific blockchain platform with existing supply chain partners can expand the user base and reap greater transparency.
- Leverage blockchain for marketing purposes. Blockchain holds additional value for marketing purposes. Increased transparency and accountabilities carry over into an array of systems to better serve consumers, including automated shipment tracking, increased use of and tracking of loyalty points, better aggregation of data for use in advertisement targeting and more.
- Remember the reverse logistics supply chain use of blockchain. Reverse logistics will also see gains through blockchain technology. Since shipments will always have a backward flow for reclamation of raw materials, recycling, disposal and resell for products that were cases of buyer remorse, the use of blockchain in reverse logistics will naturally reduce fraudulent returns, save money in a costly process and improve customer experiences. In sensitive supply chains, like cold chains, the use of blockchain will enhance the safety of products, reduce contamination, enable immediate action on recalls, and even save lives.
- REPEAT STEPS ONE THROUGH NINE.
What’s It Mean for the Future?
Blockchain will continue to push more shippers toward a connected, unified future. Shippers must embrace the technology now and begin the work to find and leverage systems that will enhance operations, brand value and customer experiences. Since the world is marching at full pace toward a digital future, now is the time to act.
E-COMMERCE SERIES SUMMARY
E-commerce is growing at a phenomenal rate and is expected to approach the $2 trillion valuation by 2020, says eMarketer. By 2025, it will double in value and become a more significant portion of the overall retail picture. This trend is not isolated to e-commerce; it is being felt in brick-and-mortar retailers, dropshipping centers and service providers, logistics service providers, industry-expertise circles, software developers and everywhere in between.
This is the era of e-commerce, and since e-commerce means purchasing through the internet by definition, it will naturally become synchronous with omnichannel customer experiences and supply chain practices. Although shippers can build a business case for the use of new technology in their supply chains, the best business cases will contain the information presented within this e-commerce series.
E-commerce is not going away, and shippers will face the perils of trying to stay competitive in an Amazon-saturated market, as well as an Amazon-defined logistics’ standard. Fortunately, Cerasis will be by your side as the world becomes more reliant on the internet, connected systems, artificial intelligence, Big Data, SaaS, e-commerce, omnichannel experiences, returns management standardization, and blockchain-based.
So, what’s keeping your organization from the precipice of the e-commerce revolution?