What Is Blockchain And How Will It Change Parcel Shipping?

Blockchain Technology

If you keep up with tech news, you’ve probably encountered 2018’s hottest term: blockchain technology.

In brief, blockchain is a digitized, decentralized, publicly distributed ledger. It is a way for organizations to keep track of what went where, all in the public domain. More and more industries are finding ways to apply the technology to their companies. Shipping and logistics industries are no exception.

Blockchain technology promises to deliver a cheaper, more efficient way to manage logistics. Its decentralized, unalterable ledgers could be a valuable tool for understanding the movement of goods in a supply chain.

In December, UPS joined the Blockchain In Transport Alliance, expressing interest in a secure, industry-wide blockchain system. And in March, DHL announced it had partnered with Accenture to create a blockchain prototype that would track pharmaceuticals to provide end-to-end supply chain visibility.

While blockchain’s applications to shipping are still mostly in prototype form (like DHL’s) they’re coming. Blockchain technology will help increase efficiency and accountability in shipping. And shippers and carriers alike need to understand how it will impact them.

What is Blockchain Technology?

Blockchain is on the cutting edge of database technology. Blockchain is a ledger of transactions—exchanges of money, packages received, ship manifests, customs declarations, you name it.

Most famously, all transactions made in leading cryptocurrency, Bitcoin are stored on a blockchain and available for public review.

How could this apply in shipping? Imagine if every transaction in shipping, such as the organization of shipments within warehouses, the processing of packages by brokers, brokers’ deals with carriers, the delivery and receipt of packages at every warehouse and their destination were stored in the same place, where everyone in the process could see them.

Currently, all that information is siloed with little transparency.

After UPS announced its membership in the Blockchain in Transport Alliance, the company’s Director of Enterprise Architecture Linda Weakland said in a statement: blockchain “has multiple applications in the logistics industry, especially related to supply chains, insurance, payments, audits and customs brokerage. The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders.”

To summarize: blockchain data could be a valuable tool for understanding the movement of goods in a supply chain.

What Could Blockchain in Shipping Mean for Your Company?

First, blockchain will increase transparency along the supply chain. If every step must be recorded on the same ledger, shippers can track movement that is currently invisible. This includes where shipping containers are around the globe, whether they arrived at the scheduled transfer point on time, or even the temperature inside containers transporting frozen or medical materials.

In other words, when shipments fail, blockchain will allow shippers to know exactly who messed up and when. Contracts themselves can be encoded in blockchain. This would make invoice auditing worlds easier.

Second, blockchain will record all transactions in a public ledger where shippers and carriers will be able to see their competitors’ rates and levels of service.

Transparency like this might be intimidating for everyone involved. Opacity in contract negotiations allows carriers and supply chain middlemen to keep fees and surcharges higher than they might be otherwise.

But transparency also helps build trust. When every transaction is public, everyone has to account for their mistakes and make honest efforts to reduce errors. Risk is reduced because shippers can find out early if something goes wrong. And costs go down as middlemen are no longer protected by shadows.

The International Data Corporation estimates that within three years, one in three shippers will track the movement of goods along their supply chain using blockchain. And with good reason. Blockchain will transform supply chain networks, enabling cost and risk reduction and promoting nimble new business models.

Why is Blockchain Technology Important?

It’s easy to wonder if blockchain is just the latest shiny technology catching the eyes of shippers and carriers. We don’t think that’s the case.

Despite innovations across shipping and logistics, our supply chain records are still largely analog. Shippers have to communicate with each partner individually. It’s difficult to understand the supply chain as a system unless all that information can be stored, processed and applied as a single unit.

Blockchain implementation will allow for that transparency and increased communication. Though the adjustment may be tricky, we believe it will ultimately establish trust and accountability between shippers and their partners.

At the same time, blockchain can streamline business processes for companies at all steps of the supply chain.

Take DHL and Accenture’s prototype. According to DHL, the program is focused on tracking pharmaceuticals across the supply chain in an effort to keep counterfeit medicines from reaching customers.

Their blockchain was able to track seven billion unique serial numbers and as many as 1,500 transactions every second. The ledger they built is visible to all stakeholders in these transactions. Not only pharmacies, hospitals and doctors, but also manufacturers and distributors.

“Using a common, indelible and secure ledger, the industry can achieve much higher safety standards – from the factory to the patient – at much lower cost,” said Andreas Baier, Accenture lead for the travel and transportation industry and DHL client team leader, in a statement. “This is one of several opportunities blockchain affords to restructure business processes while reducing cost and complexity.”

There will be many more opportunities to come.


The Reveel App uses AI and machine learning to provide an unparalleled look into what’s impacting your bottom line. Through invoice audits, peer benchmarking, and rate modeling/simulations, you can see the health of your operation and assess pricing changes from parcel carriers like FedEx and UPS. Sign up for a free Reveel account today to see how you can leverage automation to synthesize your data, ship more for less, and reduce the time needed to identify issues and action items. 

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