Key players in the trucking industry are pushing for the wide adoption of blockchain technology, an advanced ledger system that they believe will make shipping more efficient.
Blockchain technology is a shared digital distributed ledger that, when implemented in a supply chain, can streamline the entire trucking process from start to finish.
A coalition of manufacturers, shipping companies, and logistics technology organizations have united in a consortium called the Blockchain in Trucking Alliance, a move they believe will quickly and strategically implement the technology.
The concept of deploying blockchain in trucking systems is only in its infancy, said Kenneth Craig, vice president of McLeod Software, a charter member of the alliance, also known as BiTA. When fully adopted, blockchain has the potential to revolutionize the shipment and transaction process.
Blockchain allows companies to track trucks and monitor freight services carefully on a shared digital network, keeping commodities safer and maximizing efficiency.
“You’re going to start having companies that can say, ‘My technology is recorded in the blockchain and it’s superior because it’s trustless and self-executing. It’s a better framework than the old technology,” said Craig Fuller, chief executive of TransRisk and co-founder of BiTA. “Those companies will end up winning market share because they have a superior way of doing things.
But in order for freight brokers to successfully transition away from using this old technology, a new system must be carefully designed.
“We formed the Blockchain in Trucking Alliance to develop common standards around blockchain applications in the trucking industry, from speeding up transactions to securing data transfers,” Fuller said. “The technology holds great promise, but to encourage its proliferation, we believe that developing industry standards were paramount.”
Blockchain is already widely used in the financial industry, as the underlying technology that supports the digital currency bitcoin. But unlike bitcoin, which is based on a public blockchain and is shared with millions of users all over the world, any blockchain the trucking industry uses will be secure and private.
“With bitcoin, the sheer weight of all those people building a blockchain, where they all verify and validate every new user that comes on, lends it the immutability and security,” Craig said. “In a consortium, or a permission blockchain, that security is probably going to come by nature of contracts and agreements between the players that play on the blockchain.”
In the trucking industry, the “players” involved are suppliers, shippers and brokers. Groups of those key stakeholders, united under an organization like BiTA, will be better able to build these blockchain structures and sign agreements.
High levels of demonstrated interest have already been expressed by major players in the trucking industry. After launching Aug. 16, 70 members have filed applications or been accepted into BiTA, and Fuller expects more than 100 to join the alliance by September.
When P&S Logistics joined as a charter member in August, Mauricio Paredes, P&S’ vice president of technology, said he was proud to be a part of BiTA’s “mission to revolutionize the trucking industry for greater transparency, security, performance and efficiency.”
Other charter members include Triumph Business Capital, McLeod Software, TMW Systems, Convoy, and TransRisk, formerly known as TransVix.
BiTA has yet to hold its first meeting, instead planning on recruitment and education for now.
“Over the next couple of months our priorities are gathering interest, providing dialog and information on what blockchain is and what it represents … and bringing parties together that have commercial interest around blockchain,” Fuller said.
Before implementing blockchain on a larger scale, industry standards and policies must be drafted and agreed upon. Fuller plans to address these priorities at BiTA’s inaugural gathering in mid-November. There, members will form governance committees, develop commercial use cases and work together to develop standards of execution.
Already, technology companies like IBM and distributors like Walmart are experimenting with blockchain systems, but they have yet to achieve commercial ubiquity. Fuller expects that within the next year, that will change.
“The technology of a blockchain is there, but it’s about how to apply it. The logic that sits on top of the technology to use it really isn’t there yet. If someone’s CEO says, ‘Go get me some blockchain,’ that’s impossible,” Craig said. “It’s a very immature technology right now, but that’s where BiTA comes in.”