The efficiency of logistics chains has reached its peak. The further development is possible only by virtue of innovation. The most demanded and expected innovation is the transition to the unmanned cargo robotic technologies.
Need for speed
At the end of 2016, Amazon had 310 million active users. The number of Amazon customers is growing by an average of 10 million people quarterly. Jeffrey Bezos logistics empire delivers your parcel this very day if you’ve placed your order before the lunchtime. In turn, the number of active buyers at the largest Chinese e-commerce platform Alibaba already exceeds 480 million people. According to the estimation of China state postal service, during Singles Day (the Asian analog of Black Friday) Alibaba sends more than 1 billion parcels, which is comparable to the total number of postal items sent within the country in a whole year.
Both companies conduct a kind of logistical war with the slogan “the fastest wins”. The Chinese giant has recently announced the introduction of same-day delivery for anywhere in the world. It is planned to spend $16 billion on this project. Amazon has seriously increased the number of its patent applications for logistics and supply chains. Only in 2016, the company has registered 78 patents, one of which turned out to be the sensational tower of drones.
Yet not only the B2C segment needs to increase efficiency. Most of the other manufacturers, from cars to computers, dictate the logistic principle of Just-In-Time. In case the customer is located in a difficult-to-access area, such as many mining companies, the costs of logistics usually rocket to the sky-high level.
Reached the limits of efficiency
To continue their expansion, companies will have to change the freight industry itself. Further optimization of the market of traditional logistics is simply impossible. Most of the proposed iterations make it possible to reduce only tenths, and sometimes even hundredths of percent of costs, or barely slightly reduce the time spent on delivery. In the United States alone, the total market for logistics and freight transportation was $1.5 trillion in 2016, which exceeds the market of 2015 by merely 2.6%. According to the same report, the annual growth of the sector was generally at the level of 7.5%. This indicates the market has reached a peak.
Now the industry is not ready for growth, the existing infrastructure becomes a subject to systematic inefficiency, and sometimes even fraud. According to the FBI estimations, the theft of cargo in America leads to an annual loss of $30 billion. The current system is not transparent. It includes dozens of mediators, and the number of their interactions with each other within a delivery can sometimes exceed a hundred or even a few hundreds. Blockchain can help that.
Distribute and transport
The technology will naturally fit into the logistics market and will make it more efficient in the very near future. The appeal of using blockchain is in its ability to create decentralized and unchanged registers supported by many parties at a time. Since the information cannot be hacked, damaged, or intentionally altered in behindhand, the transparency and value of the information stored in the chain increases significantly. As a result, all participants in the process will be able to access all sites, thereby minimizing the role of cargo brokers.
Furthermore, blockchain is necessary for the full implementation of unmanned delivery, whether it is to be done by drones or car wagons. Such platform can unite all participants as based on the same distribution system. This will remove a lot of problems, starting with the approval of the delivery route for robots and ending with the calculation of insurance fees and payment transfers. Working with blockchain will not only reduce the transaction costs, but also increase the speed and quality of cargo delivery. The transition of logistics to the unmanned systems (rather ground than aviation) is a matter of a very short time.
However, despite all the hypothetical advantages of introducing new technologies, it is difficult to predict the final consequences. In the United States, almost 1.5 million truck drivers are employed, and 13 million people were employed in the transportation segment for the year 2014 in total. Transition to the new technology will mean the release of colossal labor resources.
Right now, unmanned cargo delivery systems do not fit into the existing infrastructure. The current logistics market is based on the existence of a pilot. There is always an individual in a supply chain of decisions and actions. Reforming the market will only become possible if the initial environment will change to the one with no pilot present.
I see the appropriate market solution in elaborating an operational platform for unmanned cargo logistics based on smart contract technology, that should aggregate information on all the events of cargo robots lifecycle. Only in such case will the companies be able to reduce their costs and keep up with the forthcoming logistic revolution. And the only answer to this market challenge now is our open blockchain platform SKYFchain, that records all the key events occuring with cargo robots and their interactions in the supply chain. Each transaction is recorded on the platform. Each record has its own cost depending on the type, frequency and complexity of transactions and is denominated in a traditional currency. It’s mechanisms allow to guarantee the reliability of information for all its users. The platform also allows to implement logistics schemes and financial calculations of any complexity in the format of a smart contract. This significantly simplify the interaction between operators and customers and gives financial and insurance institutions an effective and clear-cut tool to control the assets (including lease, escrow, and any other transaction) both in traditional and crypto-currencies. SKYFchain can unite all the market participants as based on the same distribution system. This will remove a lot of problems, starting with the approval of the delivery route for robots and ending with the calculation of insurance fees and payment transfers. With the help of SKYFchain, we will support the logistics industry transition to the unmanned systems, which will result in a significant reduction of the transportation costs.
On March 1, the pre-ICO of the SKYFchain will start. The system is available to all market participants and allows implementing logistics schemes and financial calculations of any complexity in SKYFT tokens. 1.2 billion SKYFT tokens will be released at a price of 3.9 cents. Pre-ICO will continue until March 31. During the pre-ICO SKYFT tokens can be purchased with a 40% discount.
This is a sponsored press release and does not necessarily reflect the opinions or views held by any employees of The Merkle. This is not investment, trading, or gambling advice. Always conduct your own independent research.