Blockchain in megacity logistics

Megacities are expected to grow from about 14% to over 20% in worldwide GDP this decade. Grocery stores sprout to supply the needs of megacities' population. Third party logistics (3PL) providers handle the supply chain aspects of stores so that stores can focus on their retailing competencies. The retailers often desire having a single point of accountability, hence fourth party logistics provider (4PL) is entrusted to manage activities of 3PL. However, 4PL in the long term has the tendency to collude with 3PL and misuse its status. This is possible due to the information asymmetry between logistics providers and retailers. In order to combat information asymmetry, a peer-to-peer audit system is necessary since it enforces price rationalization. Logistics providers are given access to the transaction data, which is ripe for analysis, as an incentive. We see blockchain as an appropriate tool to support the search and negotiation phase of a logistics contract. In this paper, we detail the data architecture and incentive structure for the proposed decentralized retailer-logistics provider ledger. Finally, we provide a sample execution to demonstrate how blockchain may be implemented in logistics contracting.