Blockchain and Bill of Lading: What the Future Holds

by Vector | Dec 18, 2020 12:02:00 PM

Blockchain-and-Bill-of-LadingHere's a trillion-dollar question: What will the future relationship look like between blockchain and bills of lading (BOLs)? Blockchain technology is theoretically intriguing, yet it has a chasm to cross before it reaches its potential.

That puts us at an interesting point in the history of blockchain. The chasm is wide, but I'm a long-term holder of blockchain's immutable ledger. Put another way, I think blockchain was born to do BOLs for the global logistics industry. The real time, no-fuss, decentralized, digital contracts and currency of blockchain make perfect sense for an industry that moves and exchanges goods from place to place around the world.

BOLs Are Blockchain's Path to Widespread Use by Consumers

As such, "I think blockchain's legit" is a statement that's lost any shock value. At this point, the more critical question is, "How will we achieve mainstream blockchain integration?" That's what this article looks at.

And I'll even cut the suspense. My conclusion is this: Not only will blockchain integrate with BOLs, but also BOLs are the perfect on-boarding vessel for widespread global blockchain integration. Developers of decentralized applications (also called dApp developers) should treat blockchain for BOLs like a modern space race.

Why? First of all, bills of lading are contractually binding. That added factor of legality makes BOLs specially tuned to blockchain's immutable features. Secondly, people and businesses universally use BOLs across the global supply chain. The BOL is in a sense already decentralized. Businesses agree it's beneficial for all of us to track the chain of custody during the transfer of goods from one party and place to another.

There are also a host of other use cases across logistics that blockchain can tap into. But BOLs provide the best path to consumerization for blockchain. In other words, bills of lading will help blockchain become widely used by ordinary consumers rather than only by tech-oriented companies.

Blockchain will make the giant leap at some point. But you can already become an early adopter in the blockchain space today through digitized BOL document apps such as Vector's.

We'll cover Vector more below. But the premise for this advice is simple. Digitized BOLs will be a prerequisite component of blockchain in the future. So it makes sense to adopt the digitized document software and get a competitive advantage today.

To Look Forward, We Must First Look Back

Here's the thing about blockchain innovation. We've seen the narrative play out for countless inventions throughout history. We already know that one day we'll look around and it will seem as if a Copernican revolution has happened. In other words, suddenly blockchain will have simply taken over and become mainstream.

Indeed, after blockchain is everywhere, streamlining life, we'll probably wonder how we got along without it for so long. That's how it's been for every major invention throughout history, including online banking, smartphones, the internet, television, radio, electricity, the automobile, plumbing, conditioned air, and TikTok.

Technological Adoption Life Cycle

Every innovation in history has undergone a similar technological adoption life cycle. In fact, we and our businesses can be categorized as one of the categories on Roger's bell curve of adoption:

  • Innovators
  • Early adopters
  • Early majority
  • Late majority
  • Laggards

Let's look at the differences between those groups.

The Divide Between Early Adopters and the Early Majority

Note that the life cycle features an adoption gap—a divide—between the first early adopters and the early majority category of people. That gap is called the great divide. Blockchain is essentially in its early adopter phase right now. The goal? To gather enough traction to bridge the gap into mainstream adoption.

Needless to say, the experience of the majority of people is much simpler than the innovative few. For the vast majority of consumers, the experience of being introduced to new technology comes out of the blue. One day, we're sitting around sweating in the summer heat. The next day? Ahhh! We're chilling in air conditioning!

The point is, some might say Bitcoin has already become noteworthy for blockchain after hitting about $20,000 per coin in 2020. But on the other hand, what if blockchain is still in the pre-air-conditioning phase? I think it's the latter. Because despite their vast potential, blockchain, decentralized finance (DeFi), and decentralized apps (dApps) are still seeking adoption by mainstream global institutions.

In short, there's a non-zero chance we're primed for a blockchain Copernican revolution. And the quickest path there is BOLs.

dApp Developers Should Think "Inside the Box" and Design Blockchain-Integrated BOLs

To gain traction and make the jump to mainstream adoption, blockchain developers need to think inside the box. "Thinking inside the box" is a term we'll borrow from the world of art and design. The idea is somewhat counterintuitive. Instead of a blank canvas or blank check, the better route to creative development is through limitation. The constraint is what sparks the creativity.

A constraint provides a focal point for the designer. It's a problem to solve. To clarify, constraints can take many shapes and forms. A limited budget, limited timeline, specific legality, or the requirements of an audience are all examples of constraints. In every case, the constraint guides and focuses the design of the work. For window-unit air conditioners, the constraint is the size of the window. In the case of blockchain design, BOLs provide the constraint.

How so? First, blockchain is currently very technically driven. But to achieve retail adoption, industry insiders believe blockchain needs market-related use cases. In other words, blockchain needs guinea pigs. However, the use cases currently surrounding blockchain are abstract and theoretical. A lot of these models require a certain critical mass of adoption.

How do we clear the chasm? For starters, developers might spend less time thinking about outside-the-box abstractions and decentralization of processes. Instead, they could work backward a bit and consider the route we must take to get our friends and family active in the blockchain space. In short, the fuel that will put blockchain into orbit is "the consumerization of the technology."

Vector's Example, UX, and the Shift to the Consumerization of the Technology

Most people aren't technologists. That's a constraint developers can use to chart a flight path to consumerization. As noted above, BOLs are legally required and legally binding. We already know companies will love the immutable nature of the blockchain ledger. And Vector's digitized document app sets a very good example for the dApp community in terms of good user experience (UX).

Without the immutable aspect of blockchain, Vector delivers value to its customers based entirely on user experience. For example, Vector is increasing productivity and reducing dwell time through its contactless e-signature feature. Vector also helps back offices streamline the audit process because all documents are digital and stored in the cloud. Vector's features are intuitive, and its benefits are real.

Don't wait for blockchain to reap the benefits of this tech. Check out Vector now. The process changes and data mapping you do today to digitally transform your pickup and delivery process are the necessary steps you'll have to take to use blockchain tomorrow. And your worst-case scenario is that Vector's merely an excellent hedge against multiple future possibilities.

Logistics Dabbles in Everything

Let’s be honest—blockchain still faces some hurdles. It works only if it makes the leap into wide-scale adoption. Beyond that, the entire supply chain will need to standardize on a unique identifier, and every partner will have to standardize on a specific set of fields across all the disparate ledger systems. Surely, that unifying focal point is the bill of lading. It's a required legal document and essentially already decentralized.

Beyond that, how do you actually plan big, start small, and scale fast? Well, first of all let's not re-create the wheel—the answer once again is BOLs! There are 13 million U.S. citizens employed in transportation, warehousing, and related fields. Accordingly, every single one of them knows what a BOL is. Also, with Vector, the digital document processing infrastructure is already in place to apply blockchain on the supply chain.

Just about every single one of those 13 million people goes home to a family and talks about their job and the technology involved. To summarize, how's that for on-the-job training?

In conclusion, not only will BOLs be integrated with blockchain, they're also the way forward to the steep part of the adoption bell curve. Let's think inside the box, people!

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.

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