Blockchain In Freight Industry
Blockchain technology is swiftly being integrated into many industries across multiple verticals and in many cases revolutionizing processes and transactions.
Blockchain is a globally distributed decentralized database, cryptographically secured and shared across multiple computing networks (nodes) creating a secure, trust-free ecosystem.
Supply chain is one industry which holds tremendous interest for the technology — in areas such as supplier payments, product traceability and contract bids and execution. The past two years will be remembered for spurring on transformative blockchain standards and solutions, driven by the demand for transparency, collaboration, and improved efficiency in the transportation of goods. Focused on innovation in the freight Industry, BiTA — the Blockchain in Transport Alliance — was formed to improve the supply chain experience for customers, including shippers, transportation logistics providers, and their end consumers.
Transportation and logistics (T&L) has historically innovated at a much slower pace than other sectors. In the words of Peter Emahiser, CEO of Tadmore Transportation, “If shipping were pizza, no one would get a hot pizza.” BiTa is eager to propel the transportation industry forward by spurring blockchain technology development and standardizing industry uses of blockchain applications.
The call for an improvement in the freight industry, mainly trucking is long due. There are various issues which can be addressed by incorporating Blockchain.
Transportation & Dispute Resolution. Every day, there are $140 billion tied up in disputes for payments in the transportation industry. To put things into perspective, that’s about equivalent to the GDP of Hungary.
For an average invoice, a company waits for over forty days before receiving due payment. Many businesses have millions of dollars tied up in their accounts, which they could be using to advance their business, improve delivery times and better serve end users.
Blockchain has the ability to facilitate real time transactions with consensus mechanisms enabling a trust-free environment. Blockchain can smoothen industry operation freeing millions of dollars that were previously tied up or locked in against freight guarantees.
Administrative costs Processing and administration costs have risen to as high as 20 percent of transportation’s overall costs, due to over-reliance on paper transactions. IBM and Maersk performed an experiment where the companies tracked a shipping container of flowers from Mombasa, Kenya, to Rotterdam, the major port in the Netherlands.
They found that just a simple refrigerated shipment went through more than 30 different organizations and required over 200 separate communications. Any lost form or delayed approval could hold up the container in port indefinitely, or get it lost altogether.
Blockchain enabled transactions can save the logistic department millions of dollars by easing paperwork and improving transparency negating the corruption amongst intermediaries. Cross border carriers face several litigations in case of lost or incomplete documents which can be effectively handled by the blockchain.
The scalability to meet the demands are being aggressively worked on and soon the entire logistic and freight processed can be globally integrated under the blockchain ecosystem.
Auxledger, a product by world’s leading blockchain company — Auxesis Group, envisions to take blockchain in mainstream industry by allowing customizability to meet industry demands and interoperability to support cross chain communication. With Auxledger infrastructure, companies will be globally integrated solving the major challenges faced in the current system.
Tracking Tracking in-transit freight isn’t new; organizations have been using GPS technology to track freight-hauling assets for multiple decades. Historically, location updates were provided by check calls and the use of fax machines. Later, they were replaced with automated systems such as EDIs and APIs. Yet, as the industry faces ever-rising customer expectations and retailers increasingly promise same-day or even one-hour delivery services, traditional methodologies won’t scale.
With the help of blockchain technology, none of these issues would exist to nearly the same degree.
By using the blockchain for data authentication, the entire network can contribute and validate data, and it is no longer subject to tampering.
Increased reliability of tracking information can also have an impact in the conservation of goods being shipped.
Blockchain has the potential to become the universal supply chain operating system — increasing security, improving transparency and enabling scalability. To read the article on ‘Blockchain in Supply Chain Management’, click here.
