With rapid advancements in interconnectivity, such as the Internet of Things and the added advantage of instant data streaming, the freight industry has been devouring data technology as a whole and is getting a much-needed overhaul. Yet, the picture is incomplete. There are still some serious gaps, tracking being a great example of this. While shippers may have a general idea of where the freight is during its transit, often it is difficult or impossible to pinpoint the exact location and the estimated time of delivery.
Let’s face it, trucking is the life force of this country.
Communication within the industry also leaves a lot to be desired. Throughout the industry, many companies are using different systems for recording freight which allows some data to be lost in translation. That might be the reason why there is some considerable hype being built around blockchain technology. In fact, this hype is gaining some serious momentum when you consider there is a new faction, the Blockchain in Transportation Alliance (BiTA) that is working to find blockchain solutions for some of the most common trucking problems. Let’s face it, trucking is the life force of this country. Trucks are moving approximately 70 percent of the nation’s freight. As a whole, it represents over 80 percent of the nation’s freight bill. That being said, they could use all the help they can get to make the process more efficient.
Privatized Blockchain for the Industry
There is a considerable amount of potential within blockchain technology. As a data service, it can track and categorize every transaction through a products life-cycle.
For a logistics decision maker, the ability to pinpoint the location of various assets, both tangible and intangible, is invaluable.
For a logistics decision maker, the ability to pinpoint the location of various assets, both tangible and intangible, is invaluable. Within every step of the shipping process, blockchain can track the data and provide analyzable and actionable information which allows for more accurate and efficient decision making. As it’s a shared platform, the necessity for a privatized blockchain for the U.S. becomes apparent. Of course, that privatization isn’t necessarily exclusive, but rather separate from other blockchains used just for the industry. This would give shippers, carriers, freight brokers, 3PLs and anyone else in the BiTA consortium who needs to be in the know, access to a transaction ledger. BiTA’s goal, as a standards organization, is to develop a common framework to encourage the development of blockchain applications for asset tracking, transaction process and overall logistics management. All of which is geared at turning the trucking industry into something more intelligent and efficient.
…and The Seemingly Never-Ending Capacity Issue
Think about some of the most common issues within the industry. Manufacturers and shippers have a hard time finding available capacity. Putting aside the driver shortage for a moment, it makes no sense that it’s so difficult to find capacity when there’s an average of 29 billion empty or partially loaded miles per year. It also helps to understand that the trucking industry itself is incredibly fragmented in the United States. There are over 1.5 million trucking companies fielding close to 3.5 million drivers. While that might seem like a lot, 90 percent of those companies have access to six trucks or less. That makes it even more difficult for shippers to match up with carriers, both of whom need each other.
Matching a shipper’s demand to a carrier’s supply is just one of the many ailments within the industry that can be alleviated by blockchain technology.
Matching a shipper’s demand to a carrier’s supply is just one of the many ailments within the industry that can be alleviated by blockchain technology. There are many in the industry, both startups and legacy companies alike that believe that blockchain technology can make routing more efficient, cutting down on fuel costs and increasing productivity.
Source: Next Autonomous
In reality, blockchain has a near limitless amount of potential, if it can get off the ground that is.
Considering how varied the industry is with so many different players in the game, it can help to unify the trucking industry to help it become more efficient as a whole. Logistics planners can see the “whole picture” rather than just pieces of it at a time. With real-time data, they can make better decisions to make the industry leaner and smoother overall. In reality, blockchain has a near limitless amount of potential, if it can get off the ground that is.
The Blockchain Obstacles
As with any new technology, there will be some hurdles and obstacles that need to be cleared in order for it to become successful. The first issue is that everyone needs to trust in the technology and believe it to be the sole source of truth for the industry. While most people will believe in the system they are working with, it’s a little more complicated with blockchain. As a crypto-technology, it is incredibly secure and the data is locked. That being said, nothing can be changed, altered, or corrupted. It becomes carved in a digital stone, for lack of a better term. Because the technology is distributed, there isn’t a sole governing authority for the data either. In short, it’s a double-edged sword. Data can’t be lost or tampered with, but it also can’t be altered. This means that there needs to be absolute faith that the data within is a genuine accounting of transactions.
If there is any hope of uniting the industry and reducing the inefficiencies of fragmentation, everyone will have to play the game.
Secondly, blockchain will need total participation from smaller companies, both shippers and carriers. If there is any hope of uniting the industry and reducing the inefficiencies of fragmentation, everyone will have to play the game. Much the same as trust. The problem here is that smaller companies often have a hard time drumming up the necessary capital to invest in new technology. The electronic logging device (ELD) mandate is a perfect example of this. Larger companies had no problem, and many were prepared well before the deadline. Smaller companies, on the other hand, watched the deadline come and go with only 37 percent of 1,600 fleets in compliance with the ruling prior to the deadline. Trying to get that many smaller companies on board with the same, or at least compatible software will definitely be an uphill battle. However, once that’s done, you’ll have an entire industry, shippers, carriers and brokers alike completely connected and collaborating on a frictionless network.
Simply put, there is some tremendous potential for blockchain and it could very well revolutionize the industry.
Lastly, the industry as a whole needs to accept data standardization. Everyone does things a little differently, which might work in the fragmented mess that it is now, but in order for blockchain to not become a convoluted jungle of indecipherable data strings, it all needs to be standardized. This is something that BiTA is trying to spearhead by working on standardization from the outset. If the history of the trucking industry has taught us anything, it’s that incorporating blockchain technology universally across the sector is another obstacle that won’t be so easy to get around. A difference in programs could mean a time-intensive process for integration to simply make the program work with the blockchain, nevermind the data entry in itself. Simply put, there is some tremendous potential for blockchain and it could very well revolutionize the industry. However, it’s going to be a long and bumpy road before we get to the smooth workings and benefit from what blockchain could provide.
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