What do You Know About Blockchain in Trucking?
Everyone’s talking about blockchain!
but what is it and exactly how will it revolutionize the logistics industry? We’ve written about it before, but thought our customers might appreciate a primer on the various ways blockchain could improve and benefit supply chains.
So what is it?
Introduced in 2008, and first used in the cryptocurrency system of bitcoin, blockchain is comprised of a series of transactions or transaction blocks created by multiple users to verify a bitcoin’s validity. These blocks of data create a chain that everyone can see.
According to Don and Alex Tapscott, co-authors of Blockchain Revolution,
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
In layman’s terms, a blockchain is a distributed ledger or database with information stored in multiple locations rather than a centralized location. A “block” of information cannot be edited or added without general consensus of multiple users which makes it virtually incorruptible.
In a great article over at Fleetowner, Larry Kahaner explains that blockchain could impact the way a variety of logistics professionals do business because it “has a level of security that insures that no person can cover up a mistake by changing a database entry, because in a sense, everyone is watching.” In transportation that “everyone” might include manufacturers, customs agents, shippers, government regulators, carriers and drivers. Kahaner explains that a chain could even include the raw materials used to produce products.
How could blockchain impact the freight industry?
Experts believe that blockchain is revolutionizing and will continue to revolutionize the way we do business because it’s a perfect way to track and trade things of value. Sarah Holder at trucks.com explains that this innovative technology holds promise for a variety of implementations in the trucking industry.
- By creating a “digital roadmap” of routes, contracts, and deliveries triggering automatic payments–thus streamlining payment systems.
- By enabling trucking companies to keep complete records of vehicle performance, as well as, maintenance performed and damages incurred throughout the life of the vehicle. This would also simplify the process of buying used equipment.
- By creating an authenticated and time-sensitive ledger of the entire supply chain, blockchain technology offers transparency and visibility of all shipments. This could be a game changer in the temperature-controlled segment of the logistics industry.
- For customers, blockchain allows for complete tracking of routes, the ability to follow delays, and estimate delivery time. This gives shippers and 3PLs real-time information and the enhanced ability to react proactively.
Timeline for implementation?
Blockchain is already widely used in the financial industry, so how long will it take for implementation in trucking? It’s pretty new in the freight industry and there are more than a few skeptics. Jonathan Salama, over at techcrunch.com believe that for blockchain to be viable in trucking three things must happen:
- It must be trusted by everyone as the single source of truth. This means that all shippers, carriers, and brokers would be vetted.
- Participation by small shippers and small carriers is necessary, and this will be difficult as many trucking companies in the US are small without the means to purchase, learn, and implement new technology.
- The whole industry would have to accept data standardization. This means agreement on each aspect of data standardization. BiTa (Blockchain in Trucking Alliance), a group of technology and transportation experts, is working on developing such standardizations.
Here at AMT, we realize it’s a full-time job to stay on top of transportation technology changes and improvements. We study, invest in, and become experts in the latest transportation technologies. While blockchain implementation is still in the future, we are excited by its promise and can’t wait to utilize it to the benefit of our customers!