Every industry can benefit from saving time and money. Competition is high in all sectors that streamlining of operations can only bring profits. Among the areas, transportation is probably one sector that needs a lot of modernization. It is a sector that still depends a lot on paper documents and time-consuming procedures.
Another problem that plagues the transport industry is the delay in the receipt of payments. There are also disputes that result in non-payment. There is a need for a transparent and open network that will help the industry solve these problems. dApps which use blockchain technology could be the best solution to the issues.
1. Problems Faced By Transport Industry
The transport industry is facing challenges. All these problems relate to delays in procedures or payments. Even the payment delays occur due to disputes regarding payment terms. Using modern technology in the proceedings can solve the issues.
One of the fundamental problems with the transportation industry is the lack of transparent communication. When goods travel from one point to another, there are many agencies involved. It may go through different types of transports.
These different parties don’t know each other. Communication is not the same across the whole network. One person is not aware of what transpires between two other people in the same system. They all handle the same consignment. It is where the problem happens.
The transport industry processes a lot of documents. Estimates show that around 20% of the cost of transportation goes for administrative and other procedures. The significant portion of the amount comes from the paper transactions. There is an urgent need to device a paperless method.
Pharmaceutical products are the worst sufferers. Many of them require transporting at a certain specific temperature. The delays due to procedures may result in variations in temperatures. It makes 8.5% of the sensitive medicines change temperature. They don’t make it past the customs.
One major issue which most of the persons involved don’t know is the condition of the roads or the vehicle when goods got transported. If drivers were able to give real-time information on these, it would solve a lot of disputes with regards to delay or accidents.
- There are regular disputes about payment in the transport industry.
- There is no transparent communication.
- Most agencies who are involved in the transport don’t know each other.
- The different elements don’t communicate with each other directly though they handle the same consignment.
- About 20% of transportation costs go for administrative and other procedures.
- Hard copies in paper contribute to the expense in a big way.
- Temperature sensitive pharmaceutical products suffer procedural delay. 8.5% medicines don’t pass customs.
- Drivers are unable to provide real-time information on road or vehicle conditions.
2. Blockchain To The Rescue Of Transportation Industry
Like in most sectors, here too technology can prove to be the solution. Transporting companies have been looking at using blockchain technology for solving the problems. This technology can help in creating transparent transactions among the entities involved in a deal.
Blockchain helps to solve the significant problem. It can create a network for all the connected parties. They can upload their records to this network. It will be accessible to all. There is no control by centralized force in this system. It means each entry is on mutual consent by all the parties involved. There is complete transparency.
Blockchain technology will allow each of the user to enter the data on the chain. It makes it fully visible to all the members of the group. In a blockchain, you can register or modify the data only with the consent of the group members. It ensures that members enter only accurate data.
Before we look at ways blockchain can revolutionize the transport industry we need to see what blockchain and dApp are. Blockchain Is Revolutionizing The Digital World.
3. Blockchain And Different Types
Blockchain can be explained merely as an extensive network. Each block is added to the system as more transactions happen. When each block is attached the existing members of the group extend their consent. Without this consent, you can’t add a new transaction. It means that every transaction is fully authenticated and genuine.
The main advantage of blockchain is the lack of a central controlling agency. It saves a lot of time. The other members of the group already authenticate every transaction. It avoids the need for a centralized agency to approve the transactions.
The data gets stored in all the servers of the members. There is no central data storage where hackers can attack. It will avoid the loss of data. As there is no authority, everyone in the chain has access to the data.
There are three types of blockchains. These are public blockchains, permissioned blockchains, and private blockchains. Public blockchains are those where anyone can enter a transaction. There is no need for any approval from a central authority to join the group. Bitcoin is a famous example of a public blockchain.
The second type is permissioned blockchain. Here the members in the chain must be approved before they can read or write contents in the chain. In future legal documents like non-disclosure agreements can be made using such blockchains.
A private blockchain is the third variety of blockchain. It is the most restrictive kind of blockchain. Here the members must be authorized by a central authority. Only after the authorization can they join and write on the chain. It is thought to be the most scalable blockchain.
- Blockchains are an extensive open network of transactions
- For every transaction, a new block gets added with the consent of others.
- Every transaction is genuine as it needs to be authenticated by the other members.
- There are no controlling authorities to the blockchain, which saves time for approval of each transaction.
- Everyone has access to the entries in the chain.
- There is no central data storage for hackers to target.
- There are three types of blockchains “ public, permissioned, and private.
4. Decentralized Apps
dApps or decentralized apps are like standard applications. These applications work on a member to member basis. No admin will control the app. There is no one monitoring the activities of the app. There can be many users in a dApp.
The data in a dApp gets stored in a cryptographic format. It will prevent delays that may occur due to centralized control. It will also ensure that there are no failures because of power.
A dApp in the transport industry will help all the entities in operation to share their content. It is visible to all the partners. Nobody can make a false entry because it has to be authorized by all the parties. Every person who is involved in transporting goods from one point to another will be aware of the complete process.
5. Use Of dApps In Transport Industry
In an industry where transactions include many parties, it is essential to use a transparent system. Using dApps in transport will ensure that all the data gets stored across all the members of the group. It will be visible to anyone, and no tampering can take place. Let us see a few uses of dApps in the transport industry.
Faster Payment
There are many people involved in a trucking operation. It dramatically makes the trucking company depend on these people to authorize and pass the documents to the next stage. It doesn’t happen on time. In the end, the trucking company doesn’t get its payment on time.
In a dApp, there is no central authority or authorities who can stop the payment. The group members make the entries in the application. It means that there is no delay at any point. Each of the members makes his or her entry, which all the members give consent. Once a data gets entered, it receives an authentication.
No Cost of Transaction
Transaction fees in transportation are pretty steep. It can be a massive dent on the earnings of the trucking company. After all the expenses, the company will get only a small amount. When there is a cancellation fee involved, this becomes very less. It is highly frustrating for the company.
When they use blockchain technology, there is only peer to peer transaction. There is no central authority to charge any transaction fee as the members themselves approve all transactions. It ends in a considerable saving.
Secure Payments
No company is interested in someone monitoring and being in charge of the cash transactions. There is a high chance of fraud. Using blockchain technology companies can use dApps to make and receive payments. These are highly secure, and nobody is monitoring the transactions.
Better Tracking
Customers are seeking better service every day. It means that transporters have to keep track of their truckers at all times. It can only ensure that the vehicles reach on time. Any unwanted delay should get monitored. You can manipulate the present systems.
A system based on blockchain will ensure that all the data entered get authenticated. There can be no tampering or manipulation of data. It means that correct information is available with the transporting company. It helps in keeping customers informed about their cargo with accurate information.
Temperature-controlled trucks transporting medicines and other perishable items are the primary beneficiaries. They can avoid unnecessary delays using the real-time data that blockchain based dApps can provide. You can prevent the wastage of drugs due to temperature changes.
Optimizing Capacity with IoT and Ia
Using the IoT and IA in blockchain dApps, trucking companies can ascertain the amount of space in a truck. It helps in better planning of loads. They are also able to calculate the amount of space taken by a cargo. It can get them the cost of transportation accurately.
IoT, which is enabled by blockchain, can help in monitoring the temperature, humidity, and location. It will help in keeping sensitive medicines from getting damaged due to temperature changes. The company can prevent deviation of temperature and damage of harmful drugs.
Vehicle Cost Determination
Many companies buy second-hand trucks from more prominent transport companies. If all the records get maintained in a blockchain based dApp, then it can be seen by the buyer. The real history of the vehicle will be available. It will help the seller in getting the correct price. The buyer can buy a good truck.
This kind of maintaining a proper record of the vehicle is useful for insurance companies too. If they know the exact condition of the vehicle, they can offer insurance at a lower price. As the actual situation is not known, insurance companies are bound to increase their rates.
This kind of maintenance of performance of parts can also help parts companies to monitor the performance of their components. It will help with warranty matters too.
New Carrier Approvals
When a company wants more trucks for their goods, it is difficult to add new carriers. There are procedures which will take time. The company has to check records. If there is a dApp which maintains truck and driver details of fleets across the country, it is easy for companies to approve new carriers.
Streamlining the Operation
Using IoT and blockchain can help compare data from different vehicles. Companies can get vehicles to communicate among themselves. It helps in vehicles moving as a convey. Communication can help in the safety of goods and improving fuel efficiency.
Reliable Load Information
It is one area that a dApp with blockchain technology can help a lot. Often there is a misrepresentation of the load availability. When two or more brokers are trying to get trucks for the same load, it can get mistaken as two different loads. It will give a wrong figure to the truckers.
By using the blockchain, the shippers can enter the details in the dApp. There is no way data can be duplicated in a blockchain as others have to approve the entry. The mistake is bound to be noticed and corrected.
When there is the right information about the loads, there is no need for a broker. If the loads are all mentioned in the blockchain, everyone gets the information. When the load gets awarded to one trucker, that information also gets uploaded in the network. It will save the money paid to intermediaries.
Smart Contracts
It is one of the most critical advantages of blockchains. In Blockchain, you can code the Smart contracts. There can be conditions that can be incorporated. If there is a condition to make payment to the trucker when goods are delivered, then payment will be created automatically. It will make payments faster.
Right now, truckers depend on paper documents. These documents have to pass through many hands for approval and verification. It will cause a delay. There is a likelihood of loss of the papers. It can be avoided using blockchain.
- Blockchain enabled dApps can help in getting quicker payments as there are no people who should authorize the payment.
- As there are no agencies to approve the transaction, there are no transaction fees.
- The payments are secure as nobody is monitoring the payments.
- Customers can get correct information about the arrival of the goods. There is no wrong information possible with this system.
- Monitoring the temperature and humidity conditions of air-conditions trucks is easier.
- Loads can also be better planned and optimized using this technology
- Using blockchains can help the prospective buyer know the real condition of the vehicle.
- Insurance rates can get reduced if the insurer knows the exact condition of the vehicle using blockchain technology.
- Companies can approve new carriers as correct information will be available.
- Using IoT and blockchain ensures the safety of vehicles and streamlined operation.
- Load details are correct when posted in dApps. There is no duplication of the load availability record.
- There is no need for intermediaries for companies to hand over loads to truckers.
- Smart contracts can help in making payments to trucking companies faster.
6. Conclusion
The transport industry is far from adopting the technology. But the awareness is already created among truckers. There is a consensus that blockchain technology can be useful in making the trucking industry more profitable.
The main obstacle is the lack of complete trust in the system. Truckers are not willing to place all their details in an open network. There is also the risk that the data entered may not be correct. The fact that you can’t edit any data is another significant drawback with the system.
But that doesn’t mean the industry will reject the technology. There are many advantages to adopting the technology. In the long run, blockchain based dApps can help truckers to run their businesses more profitably and efficiently.
