Blockchain Technology and its Impact on Logistics

Blockchain Technology

Did you know that the less than truckload industry is dominated by less than 30 national carriers?

In fact, as of 2017, just 25 companies fulfilled 90% of LTL shipments in the United States!

These companies consisted of giants in the industry who utilize multiple hubs and hire thousands of employees to transport more than 100 million tons of freight every year. Keeping such large-scale businesses running smoothly is, to say the very least, a challenge.

To help keep those wheels turning and goods flowing out the warehouse doors, many of the biggest LTL companies rely on blockchain technology. 

Now, it is quite possible that you have never heard of the blockchain being used in the logistics space. Most people know that this computer algorithm as a distributed ledger for cryptocurrency. But... in the logistics industry?

Yes! Just like any other technological solution that takes the world by storm, blockchain is finding a home in logistics.  

And here's how...


What is the Blockchain? 

The blockchain was created back in 2008 by a person or a group known simply as Satoshi Nakamoto. Originally, it's purpose was as a ledger for transactions of the cryptocurrency Bitcoin. It uses a dedicated and proprietary mathematical algorithm alongside artificial intelligence to organize, catalog, and securely store information about these transactions within the cloud.

What makes the blockchain so useful is that it essentially tracks the flow of data that is carried in individual blocks throughout a network. This network is accessible by multiple partners but not altered by any one party. It provides a living transaction warehouse that displays facts to which only the algorithm itself can make changes. This type of transparency and security is vital when dealing with peers and other stakeholders in any industry. 

Nowadays, many supply chain companies are integrating blockchain technology into their transportation management solutions (TMS), customer relationship management software (CRM), and other cloud-based platforms they depend on daily.  



How is Blockchain Technology Used in Logistics?

Blockchain technology adds an additional layer of transparency that provides clarity and peace of mind to all stakeholders. The key to any successful business is the ability to communicate effectively and clearly with your partners and clients. What better way to achieve that goal than to implement a platform dedicated to that single purpose?

Let's take a look at how that applies to the logistics industry...


  • Blockchain solutions will document and record the transfer of all commodities used throughout a shipment. Every time a pallet moves, a container filled, or delivery attempted, it creates a record. This provides an incorruptible digital paper chain.  
  • Blockchain software also records transactions and can store digital copies of important paperwork such as a purchase order, bill of lading, customs documents, and more. Additionally, it is possible to update it on the fly. This allows carriers to update their shippers and recipients about any freight delays or expected arrival time changes all while on the road. 
  • This type of software also records temperature zones for cold storage supply chain operations. Not only does this provide a digital record, but it also improves the safe movement of temperature-sensitive materials. As such, it reduces the potential for bacteria spread or foodborne illnesses. 
  • Blockchain also provides a digital link between tracking software and hardware tools such as serial numbers, bar codes, RFID tags, and the product itself.  


Final Thoughts

Third-party logistics companies like Redwood Logistics have been at the forefront of blockchain technology. More importantly, we've been applying it to supply chains large and small with great success.

Working with an experienced 3PL allows carriers of all types to access customized blockchain solutions with ease. Blockchain technology is scalable, affordable and significantly reduces mistakes. Best of all, it adds a new layer of trust and transparency to your partnerships. 

Simply put, blockchain technology is a win-win solution for the logistics industry. 

Want to step into the future with us? Give us a call or send us an email today, and let the team at Redwood get your new system up and running!