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Blockchain for Logistics: Why It Matters

Logistics is an essential part of the supply chain and transportation management.

And even though it looks like a lucrative industry, many companies miss a significant percentage of their profits due to unnecessary expenses, inefficient practices, theft, and cyber-attacks.

Stolen, misshipped, and mislabeled cargo alone make up about $50 billion in losses every year.

Still, amid these challenges, there’s a technological solution that holds enormous promise — blockchain.

In this article, we will delve into the blockchain concept in logistics, explore its multifaceted benefits, and examine real-world use cases and success stories that underscore its undeniable significance.

What Is Blockchain in Logistics?

Blockchain in logistics and supply chain management refers to the application of blockchain technology to streamline and improve various aspects of the logistics and supply chain management process.

Blockchain is a decentralized digital ledger that provides a secure, transparent, and unchangeable way to record and check transactions across a network of computers.

In the context of logistics, blockchain serves as a distributed ledger that records information about the movement and handling of goods as they move through the supply chain.

Benefits of Blockchain in Logistics

Blockchain technology offers a wide range of benefits when applied to logistics and supply chain management. Here are some of them:

Improved Traceability

Blockchain for logistics offers live, start-to-finish tracking of goods. Every product or shipment gets a unique identifying code, and its journey in the supply chain is noted on the blockchain.

What Is Blockchain in Logistics?

This detailed tracking helps businesses follow their product’s origin, status, and location with pinpoint accuracy. In sectors like food and pharmaceuticals, this makes an essential feature for maintaining quality and meeting strict regulations.

Reduced Fraud and Counterfeiting

Blockchain’s unchangeable and secure characteristics make it very hard for unauthorized parties to alter or fake products and documents. By using blockchain, businesses can confirm the legitimacy of products, certificates, and shipping records, which lowers the chance of fraud and counterfeit items entering the supply chain.

Better Security

Blockchain applies solid cryptographic mechanisms to protect data. Transactions and data on the blockchain are encrypted and linked in a chain of blocks. This strong security reduces the chances of data breaches, unauthorized access, and data tampering, providing the safety and privacy of logistics information.

Efficiency and Cost Savings

Blockchain’s automation and smart contracts make logistics operations more efficient. Smart contracts are agreements that execute themselves when certain conditions are met.

They can automate tasks like payments, compliance checks, and order processing. By cutting down on intermediaries, paperwork, and manual data input, blockchain lowers operating expenses and speeds up transactions.


Everyone involved in the supply chain, including manufacturers, suppliers, logistics providers, and customers, can see the same blockchain record.

This transparency builds trust, breaks down information barriers, and allows for immediate collaboration. Problems and disagreements can be resolved quickly, which reduces the need for lengthy reconciliation.

Data Accuracy and Integrity

Data entered on the blockchain is recorded in a consistent and standardized manner, which reduces mistakes and differences that frequently happen in manual record-keeping systems.

The unchangeable nature of blockchain means that once data is recorded, nobody can change it, representing a single reliable source for logistics information.

Quick Decision-Making

Having immediate access to accurate and up-to-date data allows logistics professionals to make faster and more informed decisions. This speed is crucial in responding to supply chain disruptions, optimizing routes, and promptly meeting customer demands.

Compliance and Reporting

Blockchain makes complying with regulations easier by automating the recording and reporting of data required by rules and industry standards. This diminishes the risk of non-compliance and associated penalties.

Improved Customer Experience

Thanks to improved tracking and transparency, companies can give customers real-time updates on the status and whereabouts of their orders. This level of visibility reinforces trust and improves the overall customer experience.

Global Supply Chain Optimization

Blockchain’s standard and flexible design works well for worldwide supply chains with many parties and regions. In other words, blockchain makes cross-border transactions more convenient and simplifies the challenges of international logistics.

How Is Blockchain Used in Logistics: Use Cases and Success Stories

Blockchain technology has found lots of compelling use cases and success stories in the logistics and supply chain management industry. These real-world applications show how blockchain drives positive change and provides tangible benefits.

Blockchain for Logistics: Why It Matters

Maersk and IBM’s TradeLens

One of blockchain’s most compelling success stories in logistics is the TradeLens platform developed by global shipping giant Maersk and tech giant IBM.

TradeLens uses blockchain to provide end-to-end visibility of the global supply chain.

It simplifies and accelerates the flow of goods by reducing paperwork and improving collaboration among supply chain stakeholders.

The platform has gained support from over 150 organizations worldwide, which shows the transformative potential of blockchain in supply chain and logistics.

Everledger’s Diamond Tracking

Everledger, an innovative blockchain startup, has applied the technology to the diamond industry.

By creating digital certificates for diamonds on a blockchain, they can verify the authenticity and origin of each gem.

This case study has proved that blockchain is a powerful tool in combating the illicit trade in conflict diamonds and simultaneously boosting consumer trust in the diamond market.

Walmart’s Food Traceability

Retail leader Walmart is using blockchain to improve the tracking of food products in its supply chain.

If there’s a food recall or safety issue, Walmart can quickly find the affected items and where they came from, making it safer for customers and less costly for the company. This level of traceability improves food safety and consumer confidence.

Provenance in the Fishing Industry

Provenance, a UK-based tech company, uses blockchain to track the journey of fish from catch to consumer. Fishermen record information on the blockchain, guaranteeing the safety and sustainability of seafood products.

Provenance’s blockchain solution has been adopted by several seafood companies and retailers. It enables consumers to make informed choices about the sustainability and authenticity of the fish they buy, which promotes responsible fishing practices.

IBM Food Trust

IBM Food Trust is a blockchain solution focused on improving transparency in the food supply chain. It helps managers record and share data about food products, including their origins, processing, and distribution.

Major food companies, including Walmart, Nestlé, and Dole, have joined the IBM Food Trust network. By using blockchain, these companies have improved the efficie