New payments for the logistics industry lower risks and encourage competition
One of the challenges faced by the logistics industry relates to the fairness of settling of accounts. If the sender pays for the service in advance, he needs to undergo a long and tedious process to reclaim the money in case of a (justified and successful) dispute. On the other hand, if the delivery company offers cash on delivery payments, it is expected to blindly trust the client to respect the agreement, which is a considerable risk. There is, however, the third option. One that comes with additional advantages.
The solution, implemented on the Hublock.io platform, is to use a blockchain-based token combined with escrow.
Ensuring safety of both sides of any agreement
Using a token (in our case the ERC20-compatible Hub) allows to settle accounts instantly after conditions of the agreement are met. On Hublock, this can be verified in a couple of ways, i.e. using real-time GPS tracking or video streaming – or bot. Until confirmation, the amount paid by the client is held securely in escrow in an online distributed, cryptographically encoded ledger.
This solution ensures security for both sides of the agreement. The money reaches the delivery company only when the client is certain that the service has been completed, and in case of trouble he can hold the payment and create a dispute. On the other hand, the delivery company is sure that the payment is secure and will be transferred immediately after the delivery is completed.
More information = more opportunities
Combining the token with a variety of tracking systems also allows companies to know exactly how many kilometers a package has travelled, and to charge appropriate fees based on the distance. On the other hand, they are able to charge for delivery time if they choose to, always knowing the exact time of departure and delivery. Agreement conditions may vary between service providers as Hublock doesn’t limit or force any options. In the end, it’s the client who will choose the most beneficial offer.
Blockchain brings even more advantages. The technology makes it possible to transfer funds without any delays, and without any bank fees. Furthermore, the Hub token can be used not only to settle accounts between delivery companies and their clients, but also to pay for products or services necessary for company operations: fueling, parking, vehicle leasing, insurance or B2B settlements.
Designing new solutions is the easy part
The switch from traditional currency to tokens is relatively easy to perform. The technological solutions are ready and tested, and proven to be safer than any system based on bank transfers. The only thing needed to actually perform the change is the willingness of the industry to implement the new technology.
In the earliest stage of the project we expect a degree of hesitation. It is perfectly normal to be uncertain about new solutions, however Hublock is a project by experts of the logistics industry. We hope to see companies adopting it, since the platform has been designed with their real needs and challenges in mind. Moreover, it’s fully flexible: it can be used as a separate tool or implemented – wholly or partially – into existing systems.
Learn more from our white paper.