Transport and Logistics Industry Slow to Adopt Blockchain: BCG Report
The transport and logistics (T&L) industry has been very slow to adopt blockchain. This may be because the industry feels that the new technology might be more harmful, disruptive than beneficial. According to a new report by the Boston Consulting Group (BCG), the world’s leading adviser on business strategy, the industry participants must collaborate to develop an ecosystem that forges trust and creates mutual benefits across the value chain. Blockchain will surely boost the industry, that if, given a chance.
In 2018, MTS Logistics, a shipping company, said blockchain technology can standardize payments and optimize cargo capacity. It also highlighted Europe’s largest shipping ports, Rotterdam and Antwerp working on blockchain projects to streamline interaction with port customers.
The BCG report says that many players in the T&L industry are exploring opportunities, but only superficially. The report said “60 per cent of respondents believe that a lack of coordination among industry players and the absence of an ecosystem are major barriers to blockchain adoption.” Co-author of the report, Andrew Schmahl said the best blockchain networks will be the hardest to create. “By increasing transparency, blockchain can mitigate the mistrust that often exists with the T&L industry’s multiparty transactions.” Schmahl said mistrust makes it difficult to bring together the industry’s diverse participants into a common blockchain ecosystem.
The report stresses the advantages of adopting blockchain as “improvements to speed, traceability, cargo safety and invoicing and payment processes. Such benefits can drive substantial cost reductions, helping to relieve the tense margin pressure experienced by many industry players.” Another co-author Camille Egloff said each player in the industry needs to see how blockchain can create value by relieving the points of friction in its own operations. She further says that working with suppliers, customers and even with competitors, a company can understand and implement solutions that address its specific business needs.