How Blockchain Can Transform the Transport Industry?
Blockchain Technology is one of the most fundamental and revolutionizing invention of humanity until the present time. According to Digital Asset CEO Blythe Masters says that “Blockchain (technology) is as significant now as the internet was 25 years ago”. The mainly reason for this success rate it the multitude of benefits that Blockchain has to offer.
The roots of Blockchain originated from cryptocurrency exchange. Many people associate blockchain with the cryptocurrency Bitcoin. Yes, it is true that it was the success of Bitcoin that gave the world insight into the blockchain technology. In former times, digital money transaction was the only application of Blockchain, however, over the period, it has transformed, and now we see myriads of application in the fields of healthcare, medicine, politics, academics and many more. In this article, we will give some ways how Blockchain can transform the transportation industry.
Blockchain is a distributed ledger technology which stores all the information in chronological order. This information is presented in the ledger in the form of blocks, and each block is attached to the other, so no one can to alter or change the information.
Blockchain gives the power to individuals working together. It has ability to make organizations more transparent, democratic, decentralized, efficient, secure , and resistant to outages. And with the transportation industry, provenance, immutability, transparency and data security becomes an integral feature of Blockchain, which it will impact on this industry.
For many companies, the ability to more effectively track goods across the supply chain is one of the most appealing benefits of Blockchain. With this article, however, that there are many more, equally appealing, applications for the technology within the transportation industry.
1. Freight Tracking
Tracking in-transit freight isn’t new; organizations have been using GPS technology and automated systems such as EDIs and APIs to track freight-hauling assets for many years. However, organizations seek updated information so they can make proactive decisions and share data so other users/systems can do the same. Hence, the authenticity of the data is pivotal for decision making. As data passes through various systems, there are chances for it to be misinterpreted, altered or tampered with or without the owner’s knowledge or consent.
This causes turmoil in a global supply chain. Furthermore, one of other primary concern that is present in the transportation industry is of payment and dispute resolution ( medium every day have $140 billion is tied up in dispute settlement payments in transportation). This involves a lot of time and many times the transportation industry depends on the third party, but with Blockchain, there is no need for the third party. Blockchain, through which the entire network contributes to data validation, brings trust to the entire eco-system. Everyone can easily track the vehicles and get to know freight status.In addition, because data is stored in a decentralized manner, the integration of data is simplified — all systems connect to a single node to access trusted data.
2. Easier Carrier On-Boarding
On-boarding a carrier involves validating the carrier’s driver records to ensure they maintain a strong safety rating, verify insurance coverage and confirm their ability to meet service level requirements. So, it is not easy. Traditionally, shippers and brokers rely on carriers to provide this information either in paper or electronic format. The problem with this approach is that there are thousands of trucking companies in the USA. Moreover, shippers sometimes fall victim to schemes whereby a fraudster masquerades as a legitimate carrier.
In this case, blockchain can prove helpful in validating the record of the driver. Blockchain may permit the shipper to identify a given carrier as an imposter if the carrier lacks the proper credentialing record created through blockchain technology.
Furthermore, This becomes beneficial when a freight broker is trying to reach capacity for a load at a location. If the broker identifies a new carrier around, it can use the Blockchain ledger to verify the carrier and assign the load. With the help of Blockchain technology, we can have a decentralized system where all the records of carriers across the industry can be kept.
3. Expediting Payment
This is yet another area of application of Blockchain. Shippers and carriers could enter smart contracts where the rules provide that payment is automatically made when a given load arrives at destination under various conditions.
Smart contracts are one of the best application of Blockchain technology. It is a pre-programmed contract which has defined conditions. These conditions are pre-decided, and when these conditions are met, the payment is executed. Therefore, carriers may no longer need to devote substantial resources to billing and collection efforts if the network itself (rather than a third party) validates the blockchain such that payment is made automatically.
4. Internet of Things (IOT) For Vehicle Communication
Internet of Things (IoT) is a popular topic in many industries. The introduction of V2V and V2I communications and other smart projects will only increase these numbers. With the continued proliferation of connected devices and associated data, securely storing that data will always be a challenge. IoT, together with Blockchain, can help solve the issue of core data capture and security.
From a transportation perspective, there are several applications that could benefit from the marriage of IoT and Blockchain. In terms of telematics, it would enable manufacturers to add more sensors to help service centers securely capture and store engine diagnostics data and other vehicle performance information. The role of Blockchain in is to provide decentralized data storage, eliminate a single point of failure, provide a tamper-proof record and enable smart devices to autonomously communicate with one another.
Moreover, the combination of IoT and Blockchain can be used to ensure safe delivery of perishable food products by controlling the temperature throughout the transportation process (as per reports around 8.5% of sensitive pharmaceutical shipments experience temperature differences). When we talk about temperature controlled products, the transportation relies on the on-time delivery and this increases with Blockchain.
5. Trusting Load Board
One of the common problem that the transportation industry faces are the load board. In the traditional system, it is possible that the data could be changed because of outdated and inauthentic and thus pose wrong load demand.
We believe data authenticity problems associated with load boards can be addressed by implementing a Blockchain in the heart of this business model. Shippers can easily feed the time-stamped loads which are verified by the Blockchain network. This data is unalterable.
6. Protecting Sensitive Information
In shipping process, there are certain types of sensitive information such as bids & contract, freight lane, freight volume, rates, etc., that shippers and carriers want to keep private. Since Blockchain is built on a decentralized concept, all nodes will have exact copy of data. However, the data itself is protected using cryptography algorithms requiring members to have appropriate permission levels to access the data. Without the permissions, the data can’t be decrypted.
For years, carriers have been reluctant to share their data with technology vendors for the purpose of cross-network optimization, machine learning, etc. They were worried that they would be at risk by exposing valuable information. Through the use of Blockchain permission levels and smart contracts, the system can perform these activities without human involvement and thus offer the protection members seek.
Blockchain technology is a important invention that has immense applications reaching across global business and human civilization. There may be a future where consumers benefit from the features of blockchain without even considering it, much like how the internet has been seamlessly integrated into every corner of daily life.
