Leveraging NFTs to Elevate Shipment Security
Non-fungible tokens (NFTs) have the potential to revolutionize shipping. By digitizing the shipment process and providing a secure, tamper-proof way to track shipments, NFTs can help shippers protect their valuable cargo from theft and fraud.
NFTs also can be used as smart contracts that automatically verify and execute shipping transactions based on “if/then” statements agreed to by all parties involved. They could automate many manual tasks currently required to manage shipments, making shipping more efficient, clearly defined, and cost-effective.
Let’s take the issue of insurance as one example. You need documentation to move products through a supply chain, and many key players are involved: shippers, carriers, vendors, and others. Insurance is required before any loads are moved, and for many companies, insurance documentation has yet to be modernized, sitting in paper form that can be easily manipulated or forged.
There are approximately 1.8 million trucking companies in America, 97% of which are small independent operators. Many of these businesses operate in chaos. Profit margins are thin and cash flow often is patchy. There is no premium to pay for insurance, so insurance paperwork sometimes gets manipulated to get loads moved.
Technology such as NFTs provides shippers and carriers the capability to build software solutions that address these issues and increase security for all supply chain stakeholders.
NFTs can authenticate the legitimacy of a carrier’s product. This is important to the consumer, who likely paid a large sum of money. Suppose insurance companies could provide a certificate of authenticity, knowing that product is protected as it travels through the supply chain. This would guarantee that a carrier could continually deliver high-quality goods to satisfied customers without the concern that the product may have been switched out for a fake during its journey from production to client.
NFTs act as verified, immutable ledgers. They eliminate piles of paperwork and manual labor, and can move the process to a decentralized, fixed network that cannot be manipulated. This removes issues of human error, fraud, theft, and other security risks to shipment loads.
If every trailer had a barcode to scan with an NFT attached to it, carriers would be able to track all the equipment, and shippers would be able to track every piece of the load to bring total transparency to the chain of custody. This allows businesses to go direct and cut out the middleman to scale and increase profit margins.
In the very near future, more companies will utilize NFTs to secure their shipments and scale their businesses.
Given these advantages, it’s not surprising that some of the world’s largest shipping companies are already experimenting with NFTs. For example, Maersk, the world’s largest containership operator, is piloting an NFT-based system for tracking and verifying shipments.
If successful, this could be a major breakthrough for the shipping industry. By leveraging the power of NFTs, shippers can create a more secure and efficient shipping process that benefits everyone involved.