At last week’s 2016 China Shenzhen Fintech Summit, the China Federation of Logistics and Purchasing (CFLP) revealed the launch of the Blockchain Application Sub-Committee – an initiative that will see the nation’s logistics firms collaborate with Chinese financial institutions and new blockchain firm Shenzhen Digital Singularity to help introduce blockchain technology into China’s logistics industry. Shenzhen Digital Singularity will be responsible for organizing and leading the initiative, which will work to establish rules and standards to guide the industry in its adoption of blockchain technology.
China’s logistics industry could provide fertile ground for the new technology, as the blockchain’s most hyped benefits appear to offer an ideal solution for that industry’s most well-known weaknesses. For example, China’s logistics companies suffer from the same type of problems that have traditionally plagued the industry, including mistakes with shipping delivery and the resulting financial loss. Blockchain’s immutable and transparent system for recording transactions should improve the industry’s tracking capabilities, while providing increased transparency at every stage of the shipping process.
The Sub-Committee’s efforts will be directed to small and mid-sized firms, and will focus on creating a blockchain system that improves their ability to demonstrate their operational status to lenders – something that should help those firms obtain the credit they need to overcome cash flow difficulties caused by larger firms delaying payment to their smaller partners.
This is not the first time that the blockchain has been looked to as a solution for logistics problems. Just three months ago, Marine Transport International (UK) Limited (MTI) announced that it was launching the first blockchain-based solution for the world’s shipping industry.