How Blockchain Technology Could Transform Trucking

September 21, 2017 by Sarah Holder, @ptsarahdactyl

Blockchain, a technology that stores incorruptible blocks of information across a shared digital network, could revolutionize the future of trucking and logistics by creating a new system of completing transactions, tracking shipments and managing fleets.

Blockchain is a shared, distributed ledger that facilitates the process of recording transactions and tracking assets in a business network, according to Manav Gupta, an IBM cloud computing expert and author of “Blockchain for Dummies.” An asset can be a tangible object such as a car, or intangible, such as a patent.

But virtually anything that holds value can be tracked and traded on a blockchain network, making it an ideal tool for arranging and tracking freight services.

“It’s a framework for designing a whole new way of looking at the world and managing different transactions,” said Craig Fuller, chief executive of TransRisk and co-founder of the Blockchain in Trucking Alliance, a coalition pushing for the adoption of blockchain technology by the trucking industry.

For freight brokers, blockchain technology can provide solutions to some of the biggest challenges in the logistics and transportation industry: protecting commodities and maximizing delivery efficiency.

One of the most basic implications is the creation of a streamlined payment system. Blockchain technology can create a “digitized roadmap” of routes, and smart contracts written into the blockchain can trigger the transfer of funds to a driver instantaneously once a delivery has been completed.

Record-keeping within the blockchain is also easier and more accurate.

Trucking companies would be able to maintain immutable records on each truck in their fleet, tied to every piece of maintenance given or damages incurred throughout the truck’s life—from the moment it rolls of the assembly line until it is sold again. Armed with that knowledge, companies can buy, sell, and repair new vehicles more shrewdly, Fuller said.

It also can address other logistics issues.

About 420,000 people die each year globally from eating contaminated food, according to the World Health Organization.

When using the blockchain’s digitized roadmap, distributors can trace a contaminated shipment to its source. In a recent salmonella outbreak at the Chipotle fast-food chain, it took weeks to track the disease to each restaurant location.

If the distributor had been on a blockchain, however, it would have taken only minutes to track where and when the contaminated food had been delivered, said Kenneth Craig, vice president of McLeod Software, a charter member of the Blockchain in Trucking Alliance. The same logic can be applied to defective electronics or recalled toys.

Coupling blockchain technology with the IoT, or Internet of Things, distributors could use sensors placed inside refrigerated trucks to monitor temperature. If the level climbs above a certain degree, drivers could be notified before the food spoils.

Those same sensors could also allow distributors to track and weigh their loads at all times, instead of relying on hand-recorded inventories, which can be prone to error. Using blockchain, shippers could monitor loads and send verifiable data to customers and drivers.

This also opens up the potential for trucking load-matching apps, which can identify excess capacity across distribution networks and coordinate efficient load distribution and transportation. This could help companies adapt to a shortage of truck drivers or trucks, maximize fuel efficiency or identify areas to cut budgets.

2030 Projection of Blockchain Technology Market

2030 Projection of Blockchain Technology Market. (Graph: Autonomous Next)

For customers, doing business with a shipping company that utilizes blockchain means increased transparency.

The technology gives “you access and knowledge of everything that ever happened in it,” Fuller said. “If it’s implemented and managed properly it eliminates fraud and ensures consistency.”

Customers can track routes, see delays and estimate delivery time down to the minute. And when companies start automatically logging their movements in the blockchain, customers will have full access to carrier safety history.

The key to blockchain’s value is that the system is trustless, which means each part of the transaction process is completely transparent and involves no intermediaries, Fuller said. Users can embed “smart contracts” within the blockchain, which trigger self-executing transactions and alerts.

Blockchain has the potential to transform what have traditionally been offline transactions between individuals and companies into online, trackable and transparent ones. “That’s what makes it so powerful,” said Fuller.  

Blockchain systems already have worldwide applications in finance, acting as the underlying technology platform for the digital currency bitcoin.

“It has extensive promise for every industry,” said Craig. “By using blockchain they can reinvent the very nature of commercial activity, remove intermediaries and have much more fluid business processes that can be conducted in various ecosystems.”

Though blockchain has not yet been implemented on a major scale, some technology companies have led the way in piloting test cases. IBM formed a coalition with Walmart, Unilever and seven other food companies in August to experiment with introducing blockchain technology in their food supply chains to cut back on contamination risks.

Walmart and IBM have already run two successful tests using secure digital records in a blockchain based in Hyperledger Fabric to track Chinese pork and Mexican mangoes.

Ambrosus, a Swiss food supply chain company, is using the technology to “reliably record the entire history of food from farm to fork,” using sensors, blockchain and smart contracts, according to a statement from Angel Versetti, Ambrosus chief executive officer and co-founder.

And together with AOS SAS, a Colombian business solutions company, IBM is already piloting a program to outfit its trucks with sensors to measure load weights, measure capacity and estimate delivery time.

“These are not real functioning blockchains in the pure sense,” however, said Craig. “They’re just what you might call alpha tests to prove the concept.”

And because these are isolated experiments, it is not yet clear how disruptive blockchain will be to the existing systems of logistics and operations management in the trucking world.

“The technology holds great promise, but the devil is in the details,” Craig said.

Read next: Blockchain in Trucking Alliance Plans for the Future of Logistics

4 Responses

  1. Cory Skinner

    Great article – there is a lot of work to do before it will add true value, but, the transformation is certainly a possibility and will be implemented in time. RoadLaunch, with its IoT, enabled a platform for truck/trailer visibility, digital capacity algorithms, and cargo price creation/web API product is now working as an IBM Watson partner to start the process of developing transformative products

  2. Tom Burke

    From 2002 to 2012 I owned a Regional Trucking Company. Every year we had an expenditure of over 100K for damages that we were held responsible for during the interchange of the freight and equipment. I was excited to be able to utilize the Blockchain to develop a PEIR – Photo Equipment Interchange Receipt. Now the trucking community can protect themselves with date, time, GPS location, and a series of photographs that become irrefutable evidence of an interchange. Much like have a notary public at the place of interchange. We are thrilled to be a part of the up and coming uses for the Blockchain in the transportation industry.

  3. supply chain solutions

    Great information. Block chain technology have many advantages to your business like improving efficiency by increasing visibility and transparency. Thanks for sharing the above information.


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