ASX-listed logistics innovator Yojee Limited (ASX:YOJ) has received a reiteration of a “buy” recommendation from technology analysts TMT Analytics, after the research house noted an acceleration in the adoption in blockchain technologies within the logistics industry.
According to the report In Logistics, Blockchain is not just a buzzword, TMT expects Yojee’s blockchain-based technology to have the potential to significantly reduce the costs of transporting goods and may substantially add to the company’s revenue growth.
The blockchain innovation uses so called “smart contracts” inbuilt into its software. Using a secure, distributed ledger, Yojee’s system can automate payments to suppliers and intermediaries, but is also capable of making these payments only after multiple parties have confirmed delivery verification, proof of existence and proof of movement.
The technology not only facilitates a more rapid supply chain, it also improves the accuracy of its deliveries – which can be of utmost importance when delivering items such as medical supplies or agricultural products.
TMT notes that traditional methods for of tracking and verification have remained largely the same since the 20th century and are fraught with inefficiencies and errors.
As an illustration, shipping a sea freight container across the world can involve more than 1,000 pages of logistics documents. The number of interactions between the parties involved is typically around 200,” the report states.
Parties involved in the distribution of goods are numerous, for example carriers, forwarders, ports, customs agencies, banks and insurance companies – all of which amounts to an intransigent system for moving goods.
Yojee’s solution automates much of these impediments and the company is also currently developing and testing several other modules, including Proof of Existence and Proof of Origin/Authenticity, distributed clearing, and digital management of shipping documents.
The company already has a foot in the door with one of the world’s biggest logistics companys. It is currently piloting a technology project with UPS Asia, a subsidiary of United Parcel Service (NYSE:UPS).
TMT notes that the trial has a potentially massive upside, with a United Nations estimate that digitising trade-related paperwork in the Asia-Pacific region could cut logistics costs by about 30% and boost trade by nearly US$260 billion, annually.