Blockchain in Transport Alliance Gains Members, Traction

Blockchain is gaining more interest from the transportation industry as a broad coalition of freight and logistics companies band together to set common practices to deploy the technology.

The alliance now has more than a hundred members, including UPS, Penske Logistics, GE Transportation, Werner Enterprises, Schneider and J.B. Hunt.

More than 30 percent of third-party logistics providers and 16 percent of shippers see blockchain as a potential application for the industry, according to a study by C. John Langley, Jr., a supply chain expert at the Smeal College of Business at Penn State University.

“Blockchain is truly a disruptive technology that has the potential to change many facets of life and global commerce,” a spokesperson for UPS told Trucks.com.

The parcel delivery giant is “exploring” blockchain applications in its customs brokerage business. It wants to use the technology to create transaction visibility among itself, its customers and government customs agencies, according to UPS.

While it has the potential to bring a new level of efficiency and transparency to supply chains and the trucking industry, experts say industry players will need consensus on methodologies and data standards.

Blockchain stores incorruptible blocks of information across a shared digital network. It could be used in trucking to create a new system of completing transactions, tracking shipments and managing fleets.

As a distributed ledger of records, it can serve as a network to safely share information and is already gaining adoption in many industries from retail to finance. Blockchain was originally founded as the underlying technology to support bitcoin.

There are a number of promising applications in the trucking industry. They include tracking freight and specific drivers, transferring payments and storing maintenance records, said Craig Fuller, managing director of the Blockchain in Transport Alliance, or BiTA.

“A year ago, most people had never heard of it for commercial applications,” Fuller said. “But transportation companies are starting to see it as an effective way to transfer data and value.”

The technology can be used to track virtually every component of a truck and its freight as it moves throughout the supply chain, helping carriers reduce errors, improve efficiencies and enhance quality performance metrics.

BiTA has seen significant growth in the past year as more trucking industry partners take interest in the technology, Fuller said.

While some logistics companies and vendors are already piloting blockchain applications, there aren’t any market-wide standards that would foster mass adoption across the entire supply chain.

To realize the full potential of blockchain, the industry will have to devise common practices and data fields, Fuller says.

“The technology is here but agreeing on methodologies is the only way it can proliferate,” Fuller says. Part of BiTA’s role is to help develop those standards.

Fuller estimates about 45 percent of the U.S. surface transportation can be represented in the alliance’s membership.

Blockchain is especially useful for companies that operate on different platforms or don’t know one another because it adds a layer of transparency.

It creates one “indisputable version of the truth,” said Laurance Haziot, the global head of IBM’s consumer industries business.

All events occurring from the time a truck leaves the factory also would be permanently recorded. This includes trips made, loads carried, drivers behind the wheel and repairs performed.

Even truckers can tap into the system. Truckers will be able to learn about the habits of different shippers. They will know if the shipper will hold him up at the dock or if the weight of the load will be misrepresented, Jon Fox, founder and chief executive of FR8 Network, a market place for shippers and carriers operates on a blockchain.

“We think this can be a real game-changer,” Fox said.

Having visibility of such trusted information could enable truckers to improve their efficiency, scheduling and their income, he said.

Every transaction that takes place on the blockchain is permanently visible to all parties, which will help reduce fraud, theft and errors, said Ken Craig, vice president of special products for McLeod Software, a transportation management firm based in Birmingham, Ala.

A blockchain-based system can also be programmed to capture detailed information such as identification cards and pictures as well as rules for freight pickup and delivery.

“It gives you an unprecedented level of security and trust in the system,” Craig said. There also is an irrefutable record of accountability.

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