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Blockchain is the underlying technology for smart logistics

In 2018, the Tmall 11/11 Global Shopping Festival turnover reached RMB 213.5 billion, a new record once again. In order to deliver as per the turnover, there is a massive demand for logistics services.In the era of online shopping, logistics demand from shoppers is on the rise.Although many top e-commerce and logistics companies are already highly automated. But for automation to reach a stage of precise logistics chain, it requires plenty of big data analysis and blockchain is the underlying technology for such analysis to take place.

Using smart analysis in business flow, logistic sand other information, the analyzed data can be used for demand forecasting,warehousing network and so on. The mainland e-commerce giant Jing dong (JD.com)uses data to make predictions, which can be used to understand the needs of consumers in advance and carry out pre-storage and inventory stocking. When demand can be forecasted, the logistics process will become easier to handle.As a result, the peak period will not appear to be “busy and chaotic”.

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At present, the technology behind drones, robot sand automation is quite mature. In many logistics companies, automation has been widely applied in various logistics links such as warehousing,transportation, distribution and terminals. The shuttle developed by JD.com has a top speed of six meters per second under no-load conditions and can be quickly shuttled between warehouses. In recent years, the 3D technology that arises in civilian use has also been used by JD.com. JD’s delta robots are equipped with a 3D vision system that can identify required goods from the totes and then use the suction cups to transfer the goods to the totes. There is not much need for human intervention in these large e-commerce companies’warehouses.

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When investing in a new technology, a company would be concerned with the relevant costs and benefits. According to the China Intelligent Logistics Development Report from Deloitte’s China Logistics and Transportation Team in 2016, Amazon deployed more than 30,000 Kiva robots inits 13 logistics centers around the world. Because of the effectiveness arising from the robots, each order on Amazon saved an hour’s time, from the time of stocking to delivery from the previous 90 minutes to 15 minutes at present. This allowed Amazon to save up to $900 million annually.

However,in order for the drones and robots to accurately carry out the logistics process, blockchain technology is needed to provide a database for analysis.Otherwise, automation is only a way for reduction in manual labor. Blockchain technology provides the base for the mechanical engineering technology.

After building a powerful blockchain database, it can be further applied to the Internet of Things (IoTs) and artificial intelligence. At present, IoTs mainly have the following four logistics application scenarios:

  1. Product traceability

At present, the level of consumer awareness is very high, and the product is often traced back from source. For example, agricultural products can be traced back to all the information from farm planting to transportation and delivery,including the farming conditions on the farm at that time, fertilizer usage, as well as the temperature during transportation, etc.

  • Cold chain control

For some products, such as red wine, controlling the temperature during transportation is essential. By combining blockchain with IoTs, the temperature control device inside the vehicle can help with monitoring to ensure product quality during transportation.

  • Safe transportation

Long-distance drivers are easily fatigued, and accidents often occur. Through blockchain technology, data of drivers and vehicle status can be collected through installed equipment. Situations such as fatigue driving, vehicle overload and over speed can be detected in advance to prevent problems and accidents.

  • Route optimization

Using blockchain technology, the information collecting equipment installed on vehicles would store information such as road conditions, weather, etc. and transportation could be optimized through analysis.

The application of blockchain in logistics is far more than this. Its essence lies in collecting useful information in order to help us make advanced predictions, conduct intelligent analysis and optimize procedures/operations.