Blockchain continues to excite a range of sectors, igniting tremendous interest and managing a rapid surge in investments. Bitcoin’s underlying technology is instrumental in shaping the face of innovation across industries, trucking being no exception. For an efficient trucking ecosystem, it is critical to have fast, accurate and secure data storage and sharing, and thus the application of blockchain makes good sense.
The Current State of Trucking
The statement, “The trucking industry is the lifeblood of the U.S. economy. Over 70% of all the freight tonnage moved in the U.S. goes on trucks. Without the industry and our truck drivers, the economy would come to a standstill. Simply – without trucks, America stops,” by American Trucking Associations (ATA) underlines the critical role of the trucking industry in the world’s largest economy.
Each day, millions of trucks move on the roads, contributing a significant part to businesses as well as the national and global economy. In the U.S., data suggests that trucks moved 10.42 billion tons of freight—70.6% of all domestic freight tonnage during 2016, generating $676.2 billion, or 79.8% of the nation’s freight bill. Further, trucking-related jobs extend a source of livelihood to around 7.4 million people.
The present trucking industry is as intricate as the road map of a nation. The involvement of multiple entities such as transporters, suppliers, manufacturers, distributors, dealers, financers, insurers and customers add to multiple layers, and often, opaqueness and errors in the process.
Blockchain As A Solution For Trucking's Challenges
Blockchain, or distributed ledger technology, creates an immutable record of transactions to share with multiple participants across a network in a secure and transparent manner.
Blockchain in combination with the Internet of Things (IoT) can be applied to various segments of the trucking system, be it maintenance, fraud detection, quality assurance, performance or payments.
It can digitize the supply chain process, eliminating errors as the information comes directly via sensors. Further, blockchain can fill gaps in coordination or communication, especially in places where multiple tiered suppliers are involved, thereby improving just-in-time logistics, reducing incorrect orders and raising inventory turns.
The distributed ledger technology’s real-time information sharing can facilitate a faster payment-and-settlement process. The blockchain technology can even ensure that genuine spares parts are used each time the vehicle goes to a service station, thereby reducing counterfeiting and helping in retaining brand reputation.
Current Blockchain Efforts
In June, IBM (IBM) and AOS—a Colombian company—partnered to create a solution to enhance the logistics and transport industry throughout the country. The truck-tracking solution will be built on IBM Blockchain and Watson IoT on the IBM Cloud.
Something similar was initiated for the shipping industry earlier this year. IBM and A.P. Moller - Maersk A/S (AMKAF) came together to build a new global trade digitalization blockchain solution to reduce the cost and complexities in the process, bringing significant improvement in maritime supply chain efficiency and enabling seamless global trade.
Less than a month back in August, the Blockchain in Trucking Alliance (BiTA) was formed with a mission “to provide clarity and direction to the development of blockchain technology in the trucking industry. By engaging the brightest minds from the most influential leaders in transportation, finance and technology, we will build the first set of transportation industry-specific blockchain standards.” PS Logistics, TMW Systems, McLeod Software, TransRisk, Triumph Business Capital, U.S. Xpress Inc. and Convoy are some of the alliance partners.
Blockchain is being leveraged for the development of the autonomous vehicle technology. In May, Toyota Research Institute joined the Ethereum Enterprise Alliance (EEA) to explore the blockchain technology for self-driving vehicles.
Chris Ballinger, CFO & Director of Mobility Services, Toyota Research Institute said, “Blockchains and Distributed Ledgers are disruptive technologies with the potential to positively impact future mobility by accelerating the development of autonomous driving, lowering costs to consumers, and making more efficient use of the existing mobility infrastructure.” With brands such DAF, Daimler, Iveco, MAN, Scania and Volvo already working on automated vehicle technology—there is even a greater scope for blockchain in the trucking industry.
Final Word
The sheer size and importance of trucking validate the enthusiasm among entities to work out blockchain solutions around it. Blockchain can lubricate the business processes in place while enhancing trust among entities. By bringing trucking actions and transactions on the blockchain, its ecosystem can be overhauled and driven closer to advanced technologies, such as autonomous driving which offers additional benefits to the trucking industry.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.