Bitcoin Technology and How it Applies to the Trucking Industry
The trucking and logistics industry has evolved leaps and bounds in the last two decades. Advanced EDIs and APIs allow us to deliver goods faster and that too with improved transparency and efficiency. But consumers are evolving faster than the industry – they are more connected than ever before and expect faster deliveries, often on the same day.
Just a few decades ago, such a scenario would have been unthinkable. Then again, we didn’t have smartphones, IoT, and other cutting-edge tech back in those days.
With faster communications, consumer demands and expectations also rise exponentially. So the onus is on the companies to shape up or ship out, as simple as that. Blockchain in trucking could very well be the shot in the arm the industry urgently needs.
The Hurdles Facing Trucking and Logistics in 2018 (and Beyond)
Here at GFI, we strive to deliver the most streamlined and efficient real-time fleet tracking experience to our customers. But there are still challenges and limitations that affect the industry in general.
Delay in Clearances
Unfortunately, despite deliveries getting faster, the payments system is not keeping pace. The trucking industry in North America is missing out on at least $140 billion at any given time due to payment delays and disputes.
Drowning In Paperwork
A recent IBM-Maersk joint venture revealed the sheer quantity of paperwork and communications involved in shipping one container from Kenya to The Netherlands (200 documents involving 30 different parties). Granted, shipping something from Edmonton to Montreal may not involve the same amount of paperwork, but administrative work still costs a trucking business anywhere from 15%-20% of the overall expenditure.
Connecting Shippers to Carriers
For truckers, every mile covered with an empty or partially full cargo hold equals dollars wasted. In the age of Uber and Lyft, the current system of brokerage seems positively ancient with its hours of delay in connecting shippers with available trucking businesses.
Photo by Mariana Montes de Oca on Unsplash
Addressing the Disconnect with a Distributed Ledger
A lot of the problems plaguing the supply chain devolve into issues of disconnect between the parties involved in a shipping transaction. Since no single party has access to the entire data, it takes time to match, verify, and address any conflicts.
Blockchain in trucking has the potential to solve all this due to its inherent design. At the core of the technology is the distributed ledger (or DLT). All the parties in a blockchain-based transaction will have shared copies of the entire transaction data. Any updates made during the shipping process are simultaneously reflected in the ledgers of all parties.
Increase Liquidity With Smart Contracts
Armed with the DLT advantage, trucking companies can effectively address the logjam involving payments and dispute clearance. Since the shipper also has real-time access to the transaction and tracking data, disputes or complaints can be settled faster than ever before.
The real game changer though could be the inclusion of smart contracts into the framework of the agreement between the shipper and the trucking company. A smart contract works like an automatic payment system built into the blockchain.
For example, imagine a scenario where a consumer signs a smart contract agreement with your trucking company for same-day delivery of perishable goods from Toronto to Halifax. If your trucks fulfill the contractual conditions and deliver within the deadline, the smart contract software in the blockchain will self-activate and release the payment to your company immediately.
Improving Efficiency in Tracking and Onboarding
Logistics is one area where IoT adoption is well above other industry averages. GPS technology has been an integral part of trucking as early as the 1980s. So truckers were among the early adopters of smart tracking devices. And these devices have a natural synergy with blockchain technology.
Using smart sensors on trucks, firms can now keep track of not just location, but other stuff like temperature, humidity, and current cargo load. When dealing with sensitive cargo like medicines or meat/dairy, temperature tracking can make the difference between a successful delivery and rejected cargo.
By assessing available cargo capacity on deployed vehicles, businesses can increase their operating efficiencies. Brokers who have access to the DLT will be able to speed up the onboarding process and connect the carrier with a shipper on short notice. Clients could even directly connect with the carrier live using e-ticketing through the blockchain ledger.
There is no denying the transformative potential of blockchain in trucking and supply chain industries. The crucial thing is that it needs industry-wide adoption to have maximum impact. With our cutting-edge Latitude and ELD software solutions, we are in an optimal position to harness the blockchain advantage when the rest of the Canadian trucking and logistics industry comes up to speed in the near future.