Blockchain Technology in Logistics: What Are the Implementation Challenges?

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Blockchain explores more and more industries every day. Due to a popularity of Bitcoin, this technology has already demonstrated countless opportunities for the financial area. Entrepreneurs from many other industries are trying to use the blockchain technology in other areas, and the window of opportunities looks impressive.

The main advantage of blockchain is its transparency and ability to optimize ecosystems of digital information. Understanding the opportunities of blockchain, many startup companies are beginning to use this promising technology even in areas that have nothing to do with cryptocurrencies and finance. First of all, blockchain offers numerous solutions for those who want to improve security and make operations with digital data more transparent.

The logistics industry involves many parties: manufacturers, customers, suppliers, auditors, etc. The blockchain technology offers benefits for everyone in this chain. It allows customers to track the product and trace the whole chain of product manufacturing. Auditors can easily verify and check any transactions. Information stored in blockchain is unalterable, it cannot be changed by any third party, which makes this technology more secure than any existing solution.

Why Is It Important to Understand Blockchain?

This technology can be useful in many ways. Blockchain allows companies to use verified smart contracts that automate the whole buying process, saving time and costs. With the help of blockchain, companies can make the supply chain more secure and improve the transaction flow. Each product gets a specific tag, which allows companies to secure their supply chains with just a few clicks.

A single ledger allows you to store the information on authenticity, origin, property certificates, place of storage, and records. Thus, all the information that you need is stored in one place that is easy to access, which makes the supply chain completely transparent. At the same time, this technology helps decrease the amount of fraud and cargo theft.

Why Blockchain will Create Extreme Supply Chain Management Optimization

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Influence of Blockchain on the Transportation Industry

Our way of life depends on the transfer of products, service, and value. Elizabeth Drew, a writer from Masterra with years of experience in logistics, underlines the role of this sector in the global economy: “The logistics industry gives jobs to more people than any other industry. It grows constantly, and we need to implement innovative solutions to cope with the growth of the shipping needs.”

The Internet of Everything creates new challenges associated with connected devices. They require a higher level of security, and blockchain is the best solution to date, as its protection is ensured by advanced encryption methods, distributed ledgers, and smart contracts. These features of blockchain allow us to tackle theft, ransomware, corruption, premium fees, and problems with tracking.

The implementation of the blockchain technology allows companies to save $50 billion a year at first, and more than $500 billion a year after blockchain networks reach the mass market. However, efficiency isn’t the main feature of this technology. It allows us to make the whole system less dependent on numerous intermediaries and significantly improve its transparency. For example, when buying a car, it’s important to know that it wasn’t involved in accidents that led to a serious structural damage. Having accessible records on the car history, salesmen wouldn’t be able to sell a car after major accidents.

Implementation Challenges

Let’s consider an example of a big telecommunication company trying to implement the blockchain technology. CRM systems collect orders from customers and send them to a provisioning system. In turn, the latter activates the shipping system. Such a company will also need a billing system that generates bills after the orders are completed. These are just a few of the necessary systems, and all of them use different formats of data as well as different models of data storage. All these systems are isolated. They are focused only on certain objectives. It will be a huge challenge for IT to connect all data and implement new technologies. Before a blockchain can be used, it must be re-architected for particular proposes. Organizations need to clearly define what business operations will be based on blockchain.

The new technology must be integrated into the existing IT ecosystem in order to address the actual problems of blockchain adoption. Some types of transactional data are shared with different partner applications, and the same can be done with blockchain. This approach allows companies to use the existing information in local databases and take advantage of the new technology at the same time. The existing data can be moved to the blockchain architecture, being integrated with the existing systems. Bugs associated with entering the blocks and deduplication mistakes can be eliminated using the data mapping technology.

Some companies are searching for a solution in hybrid IT integration frameworks. There is one transferring platform that transfers the electronic data from one end to another. This method of data transfer is smooth and fast. Special systems of data mapping on a generic level help eliminate or minimize the disruption on the integration level. Thus, there is one access layer that allows teams to update systems and add or remove data using one interface, without affecting other systems. A single access layer is a solution that allows companies to synchronize the existing technologies with the blockchain.


The shipping and logistics industry is searching for new technologies in order to improve the existing processes, cut costs and increase the transparency of the supply chain. The blockchain technology offers a solution to most current issues. There are certain challenges associated with the implementation of blockchain, but the more companies start implementing this technology, the more examples of successful utilization we will see. There is a number of effective implementation strategies that are being tested now, and the industry is going to change forever as more organizations get involved.

In January 2020, Cerasis was acquired by GlobalTranz, a leading technology and multimodal 3PL solutions provider. To learn more, please read the press release. If you are a current or prospective Cerasis customer, we invite you to reach out to us to learn how our combined capabilities can deliver new services, solutions and enhanced value to your supply chain. To learn more about GlobalTranz, please visit

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