Vivien Christel Vella
Vivien Christel Vella
3 min read
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Some people might still associate blockchain technology with cryptocurrency - but blockchain in supply chain management has the potential to transform industries. Here we look at its potential to change the way businesses manage their supply chains and the benefits it offers to SMEs.

What is blockchain?

Blockchain is a secure, de-centralized way to record and track transactions or other events, like a package moving around the world. Imagine a digital ledger, accessible to all participants, that can’t be tampered with – that’s the essence of blockchain. Transactions are recorded in "blocks" that are linked together securely, forming a tamper-proof chain.

With no central authority controlling the blockchain network, users don’t have to rely on the security infrastructure of a central database administrator. Instead, all participants maintain a copy of the ledger, ensuring transparency and security1.

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Benefits of blockchain for SME logistics

Blockchain offers lots of potential advantages for SME logistics. Let’s take a look at some of the most significant ones.

Supply chain transparency

Blockchain ensures all participants in the network have access to the same data, which promotes transparency and streamlines communication. So, in the context of a logistics supply chain, blockchain can provide an accurate and indisputable record of every step a product takes. This enables businesses to track goods from origin to destination, ensuring visibility and eliminating potential bottlenecks. For instance, the US retail giant Walmart has successfully used blockchain technology to track the origin of food products, enhancing transparency and consumer confidence2.

Improved efficiency

Blockchain can streamline logistics processes by automating tasks such as document verification and customs clearance. With no need for manual intervention, this eliminates the chance of human error, leading to increased efficiency (not to mention cost savings).

Enhanced security

Blockchain uses cryptography to secure transactions. It creates a unique fingerprint for each block, making it virtually impossible to alter data without it being detected.

Once a transaction is recorded on a blockchain, it can’t be altered or deleted. This makes it ideal for protecting sensitive logistics data. Because it’s so secure, it helps prevent fraud and keeps data safe from hackers.

Boosted customer confidence

By making their supply chains more transparent, SMEs can build trust and boost confidence among their customers. For example, blockchain can help businesses demonstrate their commitment to ethical sourcing and sustainable practices, which are increasingly insisted upon by environmentally conscious consumers.

Streamlined payments

Traditional payment methods can be slow, especially for international transactions. Blockchain can facilitate faster and more secure cross-border payments with reduced fees.

Improved inventory management

Blockchain enables real-time tracking of goods throughout the supply chain. In turn, this facilitates better inventory control and reduces the risk of stockouts or overstocking.

man scanning barcode on parcel

Applying blockchain to your own supply chain

If the benefits of blockchain technology sound impressive, here are three of the main areas to think about when introducing it into your own supply chain:

Granting permissions

To begin, consider the number of parties and who you are working with. You can use a blockchain to grant permissions and abilities to multiple users outside of your business. You may even choose to add features such as digital thumbprints to further enhance security through encrypted data.

With greater trust between you, your partners, and key employees, you can rest assured that the information your business is receiving remains secure. Moreover, you will be able to track who receives the information and when, through blockchain records that are only shared within your chosen network. 

Tracking information 

After determining permissions, you can better track and control the flow of information in supply chains. This allows you to decide how you want to collect, utilize, and disseminate important data. Using blockchain technology, you can streamline your processes in supply chain management to eradicate any step that hinders fast and efficient results.

For instance, you can allow the blockchain to replace manual and traditional processes with automated and digitalized solutions by using a blockchain bill of lading. This is a type of electronic bill frequently used in logistics and shipping, but made unchangeable to allow for total transparency and trust between all parties involved. These are especially useful for international e-commerce businesses where many parties are involved, as transparency helps keep all stakeholders in the logistics process accountable.

Reviewing processes 

By moving your data to a digital space, you are essentially improving the traceability of your products, processes and all other information being exchanged. Leveraging crypto networks such as blockchain gives you all-time access to real-time information and ease of sharing this information with involved parties within your distributed ledger. In the long run, this helps businesses value-add in logistics management with greater convenience, while reducing high-cost and time-consuming reconciliations or discussions. However, always bear in mind to keep your blockchain aligned to the latest standards. In order to be successful, you must ensure constant reviewing of your processes and keep up with market trends.

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Why blockchain can be a game-changer in logistics

As blockchain technology matures, it could start to revolutionize SME logistics. And here are some key reasons why this is expected to happen sooner rather than later:

  • Increased adoption: major logistics players, including DHL Express, are actively implementing blockchain solutions – a strong indicator of its potential.
  • Cost reduction: as adoption grows, the associated costs will continue to decrease, making the technology even more accessible.

  • Standardization: industry-wide standards for blockchain use in logistics are being developed, which will facilitate interoperability and still wider adoption.

  • Scalability: the technology is constantly evolving and becoming more scalable, which indicates that it should be able to meet the growing needs of the logistics industry.


The future of blockchain in SME logistics: trends and opportunities

Early adopters are already using blockchain in SME logistics and reaping the rewards. However, there are even more benefits and innovative applications on the horizon. Here are some key trends to watch out for and new opportunities you’ll soon be able to take advantage of.

Integrating blockchain with the Internet of Things (IoT)

The convergence of blockchain and IoT holds huge potential for logistics. IoT devices can collect real-time data on the movement of goods, which can be securely stored on a blockchain. This brings even greater transparency and efficiency throughout the supply chain.

Blockchain-enhanced Track and Trace

When powered by blockchain technology, track and trace solutions become increasingly sophisticated. You’ll be able to track goods in real-time; not only by location but also by environmental conditions like temperature and humidity. This will be particularly valuable for perishable goods or products requiring specific storage conditions.

Using blockchain to promote sustainable logistics

 As consumers become more environmentally conscious, blockchain will play a crucial role for SMEs who want to promote their sustainable practices to customers. For example, by tracking the origin and journey of your goods, you’ll be able to demonstrate your commitment to ethical sourcing and eco-friendly practices3.

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Getting started with blockchain for SMEs

If you’re interested in exploring blockchain for your business’s logistics needs, here are five initial steps to take:

  • Familiarize yourself. Get to know the basics of blockchain technology and its potential applications in logistics.

  • Identify your needs. Evaluate your current logistics challenges and identify how blockchain could address them.

  • Research blockchain providers. Explore the various solutions available for logistics. Consider factors such as scalability, cost, and ease of use.

  • Start small. Don't try to implement a comprehensive blockchain solution all at once. Start with a pilot project to test the technology and identify any potential challenges.

  • Seek expert advice. Consider partnering with a blockchain technology consultant to help you navigate the implementation process.


Whilst you consider the benefits of blockchain, let DHL Express take care of all your international shipping needs. 

Preparing for a blockchain future

Your FREE essential guide to blockchain: what it is, how it works and why it should matter to you.

Preparing for a blockchain future
Preparing for a blockchain future