We have all heard of Bitcoin. And we have various levels of understanding of it and the myriad of other cryptocurrencies that have popped up since. We may have even less understanding of the technology behind the cryptocurrency craze “ blockchain. It is complex, and we are just beginning to see skilled developers with the expertise to both understand it and to set up the technological architecture of blockchain, in any number of sectors “ healthcare, education, insurance, travel, governments, and more. It is becoming a favoured technology and major disruptor.
The Value of Blockchain is Clear
There are four main features of the technology.
1. Decentralized Validation
Any transaction that occurs is recorded in a block, detailing the transaction, and the block in which it is recorded is added to a chain of blocks. This only occurs after consensus is achieved among participants in the transaction.
2. Redundancy
The chain is replicated on a group of networked nodes, so that no individual point of failure can corrupt the transaction.
3. Immutable Storage
Hackers cannot corrupt the data in the blocks, because they would have to corrupt all of the blocks before it and after it, and time and date stamps would have to be altered.
4. Encryption
Access to data is granted only by key codes of those who are parties to a transaction. They cannot change it, only view the details of a transaction or a contract.
Getting specific “ the Value to the Transportation and Logistics Industry
Transportation and logistics industries that make a move to this new technology will find themselves operating in an environment that will give them an edge in their industry “ providing streamlined processes, lower costs and ultimate accuracy in all transactions.
Here are five ways in which blockchain will transform transportation and logistics
1. Smart Contracts Will Eliminate Errors, Fraud, and Staff Needs
Freight shipments, whether by land, air, or sea can be automated via smart contracts that exist in the blockchain. Terms of these contracts are immutably recorded and stored, unable to be altered by either party, except by mutual consent. And, if consent for an alteration is achieved, that, too is entered into a block with a time and date stamp. Parties to these contracts have access to them, via key codes but neither may change them.
Employees of both parties no longer need to record these contracts. Traditionally, they are entered into computer systems and printed out when necessary, often being faxed back and forth. The chances for error are there every time someone touches the contract. All of this goes away.
2. Capacities and Costs are Agreed Upon and Cemented
One of the things that at least the trucking industry has embraced has been the use of IoT devices to measure weight and capacity of loads by individual customers. But IoT is more about connections than things, especially in transportation, whether that is personal or commercial vehicles. And when these devices are connected to a blockchain, a load can be recorded, along with cost determinations, invoicing, and payments “ everything automated through one technology.
This use of blockchain not only eliminates staff but discrepancies that frequently appear. This brings up the next major benefit.
3. Disputes are Virtually Eliminated and Resolutions Simplified
Billing disputes in this industry constitute about $140 billion on a daily basis. Common reasons for these disputes include discrepancies in invoices (they are, after all, still handled by humans and keystrokes) because a shipper and client have different figures, or a client insists he was quoted a different price.
Pre-agreed pricing can be recorded and stored in blockchain, both parties have agreed upon the details. The contract, the billing, and the payment will all be recorded accordingly, and the record will be permanent.
4. There Will be Transparency in Vehicle History/Maintenance
One important use of blockchain in the healthcare industry has been the recording of device and equipment maintenance. The transportation industry is a bit behind in this area, but blockchain will be changing that too.
Right now, maintenance of trucks, aircraft, and ships is determined and then entered into in-house systems, or, in more forward-behaving companies, in the cloud. Maintenance schedules are embedded in this information as well, along with the recording of those maintenance activities. And these records must be reported to government agencies that have very strict requirements, to verify compliance.
Using blockchain to house all of this information can provide transparency, and those agencies that must be provided with those reports do not have to rely on meetings and paperwork. They can simply access the blockchain records and verify.
There is another benefit here. A vehicle’s history will contain a full story of it from manufacturing and original purchase to its status at the point at which the vehicle made be put up for sale. Carfax is a prime example of vehicle history recording and reporting. But it is a database that is still subject to error and even fraud. Not so, if that history is recorded in a blockchain.
5. Other Technologies Can Connect with Blockchain
IoT is a natural for connections to the blockchain. But other software apps can too.
In the trucking industry, for example, logistics is often an issue “ moving goods in the most efficient manner, especially when different loads with different destinations are on the same truck. Once done by hand, there are now apps that can take the information for a truckload and destinations and map out the sequence of destinations, mileage and times, to provide the greatest efficiency.
But such an app can also connect to the blockchain, and record all travel information, including time of destination and verification that a load was in fact delivered according to the pre-determined deadline. Again, secure transparency for all affected parties to see. At each point in the supply chain blockchain will record who has the goods, what condition they are in, and how much is there is.
The Future of this Promising Technology is Here
Other uses for blockchain in transportation and logistics are coming, just as they are in all industries. While this is not an industry that has been on the cutting edge of blockchain, things are changing rapidly. Here are blockchain uses that are being considered:
- Accurate and transparent tracking of goods as they are moved
- Continued reduction in paperwork and internal databases, cutting manpower costs
- Reduction, if not full elimination, of the costs of middlemen
- Reduction in theft and fraud
- Increase in security and safety, particular in perishable goods transport
- Reduction in outstanding accounts receivables
