Community Blog How Blockchain Can Deliver a Safe Future for Logistics

How Blockchain Can Deliver a Safe Future for Logistics

Find out more about how blockchain can drive your business success in our Big Data and Blockchain white paper.

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Find out more about how blockchain can drive your business success in our Big Data and Blockchain: Innovative Fintech in the Cloud white paper.

The logistics industry is under more pressure than ever before - and the cracks are starting to show.

Today’s supply chains are simply too large and complex, lacking the transparency, integrity and resilience to meet the demands of consumers and global businesses. This is where the cloud and an exciting new service - Blockchain as a Service (BaaS) - can help.

Helping Cainiao Deliver

Cainiao is the logistics arm of the Alibaba Group. The business relies heavily on cloud computing, helping Cainiao achieve an on-time delivery rate of 98 percent.

Given the scale of Cainiao’s operations, this is no mean feat. The company’s deliveries cover more than 50 billion kilometers every day. To put this number into perspective: that’s more than 1,000 times the circumference of the earth.

Cainiao uses a range of cloud-based solutions to optimize its deliveries, relying on IoT solutions to help the company track packages and analyze shipping trends in 224 counties and regions worldwide.

Using Alibaba Cloud’s network and solutions, Cainiao also processes more than nine trillion pieces of data every day, and over 80 percent of its routes are calculated using big data algorithms run on the cloud.

As a result, and by leveraging our state-of-the-art cloud technology in the logistics field, Cainiao has saved an estimated 260 million hours a day in delivery time.

Cainiao has only just started to investigate the vast range of emerging cloud-based technologies to push its business further. Blockchain is one such promising solution not just for Cainiao, but for any business working in the logistics industry.

Introducing Blockchain as a Service (BaaS)

Blockchain is a peer-to-peer database technology that underpins today’s cryptocurrencies. It is secure, verifiable, distributed, decentralized; a permanent transaction ledger with no central authority, instead relying on member participation for consensus and verification.

For the logistics industry, Blockchain can both drive efficiencies and enable new business models.

Driving Efficiencies

Blockchain could greatly reduce the bureaucracy and paperwork that hampers global trade. For example, a lengthy paper trail could be replaced with an automated and digital process to store this information.

Blockchain could also remove the need for intermediaries including insurance, legal, brokerage, and settlement services. Instead, a company could track a product’s lifecycle and ownership transfer from source to the shelf, monitoring its progress as it travels from the manufacturer to the logistics service provider, wholesaler, retailer and consumer.

With Blockchain, each business transaction could also be automated, enabling a more direct relationship between each stakeholder.

New Business Models

Blockchain introduces a range of new, potential services to the logistics industry. Tamper-proof digital documents, micro payments and digital identities and certificates, for example, are now easy to implement using blockchain-based services.

But this is the tip of the iceberg - blockchain could revolutionize the logistics industry in a range of ways. That’s why we’ve recently introduced our Blockchain as a Service (BaaS) solution.

This provides businesses with a secure and easy-to-use open blockchain to build their own solutions, reducing the cost of your operations and maintenance, while helping you reap the rewards of this new technology.

Alibaba Cloud is a world-class cloud provider with extensive experience in the logistics industry. To find out more about our work and BaaS, download Big Data and Blockchain: Innovative Fintech in the Cloud white paper today.

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