Blockchain-enabled digital assets for e-commerce logistics financing

Abstract

E-commerce retail sales have seen significant growth in the past decade with their proliferation into the consumer markets at unprecedented rates. This has led to a rise of logistics companies (LCs) and the advent of logistics financing (LF) to attain business advances. However, small and medium-sized logistics companies failed to notice their business expansion opportunities due to financing environment created by various challenges, such as a lack of an integrated framework. This thesis investigates some related technologies and decision-making models to facilitate LF applications through three scenarios. The first scenario introduces a platform that utilizes the digital assets (DAs) from LC to aid LF. It enables external systems integration (e.g., stakeholder legacy systems) by designing and implementing a blockchain-enabled traceability platform and demonstrating its application for LF using an illustrative case study. The blockchain platform uses DAs to impart visibility and traceability in the supply chain’s cyber (information flow) and physical (logistics flow) transactions for LF. It minimizes the required upfront expenditure and displays excellent performance (e.g., throughput) for the platform’s seamless adoption by the stakeholders. The second scenario investigates the problem of incentivizing DAs’ sharing through a novel tokenization mechanism. A two-stage Stackelberg game captures the interaction between providers and users of DAs to analyze various factors on participant benefits, such as technology adoption costs, level of cost sharing, and symbolic incentives. It is found that an increase in incentive stimulates participant payoffs, whereas increasing technology adoption costs decreases the benefits. However, there exists a unique level of cost-sharing that delivers maximum utility to the users of DAs. Finally, this study delves into the valuation problem of DAs using a model that takes inspiration from a standard monopolistic screening model. The model consists of a unique cost structure of creating and providing DAs to agents who consume its versions by incurring a token payment. The valuation mechanism shows that the cost factors are the sole determinants for the optimality of the DAs provisioning strategy. Interestingly, the costs do not directly influence those who consume DAs.