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Connectivity Standardization in Logistics

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It is feasible to imagine a network of systems that independently coordinate the facilitation of efficient movement of goods without human intervention, assuming all went according to plan. The novel concept of smart contracts powered by blockchain technology shows the potential for powering this system by eliminating trust and security concerns that plague the current system, but this has yet to reach mass adoption. For more details on this, see Ariguiz, Tran, Margheri, and Xu's chapter on smart contracts.

As if navigating the hundreds of three‐letter acronyms used in logistics was not enough, when it comes to the IT portion of logistics, systemic standardization and incompatibility issues are holding the industry back. From a systems integration perspective, just as a company needs staff that speaks the same language, the global trade network also need systems that speak the same language. Information may need to flow through 12–15 different systems ranging from manufacturers in developing world countries to automated ports. An industry must have some standards in place, as these are the foundations of a company's ability to implement these technologies.

For a company who wants to ship goods and to get shipment information back into its ERP system, it has to connect to the freight forwarder who is coordinating the transportation, who in turn has to communicate with a trucker to pick up the goods, a customs broker, and a shipping line often through specialized messaging partners called. The freight forwarder also needs to link to its internal origin, in China, for example, and the destination office, in the United States, either of which could be a different agent company. With little coordination in terms of standardizing digital connectivity beyond EDI between core segments of the supply chain, there is a huge opportunity for companies like Chain.io who are offering a digital connectivity platform to translate all the different fields from different providers to the freight forwarding ecosystem. With no player having more than a 12% market share, it will take the efforts of entrepreneurs and startups to innovate solutions (Riedl and Chan 2019).

The Digital Transformation of Logistics

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