Director, National Valuationt: +44 207 182 2663 Ben.Thomas@cbre.com
Senior Analyst, National Valuationt: +44 207 182 2683 Judy.Zhu@cbre.com
Following on from our previous post “what is blockchain?” we are going to look at the possible applications of blockchain technology in UK logistics property. We will break it down into two parts: the first part focuses on logistics and distribution industry and the second part on property industry.
In logistics and distribution, blockchain has the potential to lead to big changes in data management, which is the most critical part in any logistics and distribution system.
With blockchain technology, live manifest and delivery data on freight trains, shipping, cargo planes and lorries can be updated and shared across all points instantly as goods are collected and received. Problems caused by data update delays or poor communications between counterparties can therefore be avoided.
Blockchain can improve the efficiency of personnel management by instantly performing ID checks, personnel document verification, employment contracts, and references, which could lead to a more flexible labour supply for the industry.
- Warehouse space: blockchain can provide a transparent platform for warehouse supply and demand data, internally within a warehouse or externally across an entire distribution network. Knowing precisely where stock is, where it is needed and what should be ordered at any point in time.
- Picking: with blockchain technology, goods and pallets can be automatically recognised if the information is shared across all the links of the logistics chain. Blockchain together with robotics technology is being developed to make sure goods can be logged in, stored correctly and picked properly so from the time it reaches a warehouse to the time it leaves, will not be touched by a single human hand.
One of the key advantages to blockchain is the potential to enhance sales, lettings and document analysis. The ability to instantly read, check, sort and agree documentation through a series of prescribed steps has the potential to free up time for property professionals.
An example is in the purchase of a house. In blockchain, a contract could be established when the buyer and seller agree on the deal. The terms of the contract will be triggered when the buyer’s money reaches seller’s account. Finally, the contract will execute itself, which could involve sending the house key to the buyer.
This is known as a Smart Contract:
Smart contracts are just one of the many uses of blockchain in property industry. In the life cycle of property, we will see other uses of blockchain in this post.
- Data sharing: asset management has the potential to benefit from the data transparency enabled by blockchain technology. Information on occupiers, leases and facilities can be viewed, accessed and updated in real time across the network to produce up to the minute reports.
- Rent management: smart contracts can automate the process of rent collection, accounting and new leasing.
- Seeking potential investment purchases: blockchain technology has the ability to provide a transparent property database, if all property transactions and leasing records are kept in the same network. This would enable brokers to find suitable investments more efficiently and focus more on providing value-added services to their clients.
- Due diligence: once again, if all property information can be accessible in a network, it can be accessed and assessed instantly and automatically, therefore undertaking due diligence could be more efficient, and without intermediaries.
- Transaction: blockchain not only can simplify transaction documentation, but also can enforce the transaction agreement by using smart contracts.
In a similar manner to how blockchain could be used for property investment, the technology could also provide more efficient solutions for leasing team to seek commercial business space for their clients. In addition, through use of smart contracts, it could simplify leasing documentation.
In early October 2017, Dubai announced its plan to secure all government documents on blockchain by 2020. They also revealed an intent to develop a land registry system where all local property contracts are recorded on blockchain. This is a real-life example of government initiative of using blockchain in the property industry.
Blockchain technology is already changing and challenging the way we do business, with cryptocurrencies being the most widely known example. Although blockchain has yet to make a full impact on other industries, mindsets and business strategies are beginning to be alive to its potential.
So will blockchain change the logistics property industry? Yes, it will.
In the next post, we will have a look at Robotics technology.