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What does blockchain mean for you?

by Charlotte Freed | Oct 19, 2018

How blockchain is improving logisticsToday’s buzzword is ‘blockchain.’ With ample media attention and focus from all industries, you may be curious as to how blockchain correlates to your trucking business – or just interested in understanding what exactly it is. Forbes Insights along with Penske surveyed over 400 senior industry and functional executives in logistics, supply chain, and transportation, resulting in 65 percent of respondents saying they feel the industry is undergoing an enormous shift, largely due to blockchain. Deloitte estimates that 10 percent of global GDP will be built on blockchain applications by 2025.

During a recent NationaLease meeting, president of Blockchain in Transport Alliance (BiTA), Chris Burruss, defined it as simply as possible: “Blockchain is a decentralized and distributed digital ledger to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.” In short, blockchain is a way for information to be securely distributed through an online system to increase visibility to those using the chain. Burruss also said that blockchain’s current application rests between “hype and reality.”

Some of the touted benefits of blockchain is added security of difficult-to-alter records, provided history of a transaction, and the ability to track historic information, called “bread-crumbing” by some. With an instantaneous look into handoffs, the condition of goods at any given location, notice of who has touched the shipment, and insights into quality control. However, because blockchain is not owned by anyone and transactions are not administrated, governance is a major concern for many. Additional challenges include scalability, with blockchains limited to three to twenty transactions per second compared to Visa’s 56,000 transactions per second on top of the lack of standardization of protocols.

Still, the transportation industry foresees strong appeal for applications of blockchain for many organizations, including improvements in freight tracking, carrier onboarding, load board data accuracy, and payment validation tracking. When considering whether blockchain is suitable for your business, answer the following questions:

  1. Do I conduct business with multiple parties involving moving product to numerous points?
  2. Do I have trust issues between any of these parties?
  3. Do I need information and data that has not been altered?
  4. Will increased transparency be an advantage to us?

Whether you can determine whether the pros outweigh the cons for your specific operations, explore how blockchain could join artificial intelligence, machine learning, and autonomous vehicles as technologies to incorporate. What originated as a Bitcoin validation method could well be the future for many industries to come.

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