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A few years ago, it was nearly impossible to avoid the blockchain hype in the freight industry. Its potential has been touted by keynote speakers and seminars at countless industry events in 2017 and 2018. But like many other great things, the hype has waned without much to show for it in the trucking industry. This could change as the importance of digitized supply chains is amplified by the ongoing COVID-19 pandemic.
“It’s like we talked too much and everyone started rolling their eyes,” John Monarch, CEO of ShipChain, said FleetOwner. While many fleet executives might have doubted the hype, blockchain companies like yours “were upside down, building it.”
“And now we are at the point where things are really picking up, especially for business and the supply chain,” Monarch said.
Since the COVID-19 pandemic overturned retail supply chains this year, blockchain is re-emerging as a solution for an industry seeking to find better ways to meet the growing needs of last-mile fulfillment of e- commerce.
As the coronavirus pandemic continues, consumers are looking for more flexible purchasing options, from same-day home delivery to curbside pickup, that limit human contact. Fleets under pressure to supply goods to make these contactless deliveries possible should not expect demand to slow down any time soon.
The COVID consumer is expected to remain after the pandemic, relying more on online shopping than in the past. According to a global study by Mastercard this spring, nearly seven out of 10 consumers believe the switch to digital payments will be permanent, and nearly half plan to use more cashless payments even after the pandemic. In the United States, e-commerce spending increased 93% yoy in May, according to the study. This will continue to put pressure on carriers to optimize deliveries and supply chains.
“While no one could have predicted the state of the world we are in today, it reinforced the need for us to continue evolving the payment experience for consumers to meet them wherever they are,” said Jorn Lambert, executive vice president of digital solutions for Mastercard. “For years we have focused on developing our digital capabilities, which have enabled this accelerated shift to digital payments. Consumers are unlikely to return to their old payment habits. “
New opportunities
Consumer COVID is creating opportunities for location data and tech companies like HERE Technologies. “We are actively examining blockchain technology for a multitude of use cases,” said Edzard Overbeek, CEO of HERE. “One of the most exciting is to think architecturally about where the new geospatial databases need to go.”
A blockchain is a register of entries without fixed trust, hosted on an open distributed network of nodes. It is called “trustless” because it does not require a trusted intermediary. This makes systems based on blockchain technology potentially more secure and less expensive than traditional centralized databases and resistant to attack. The technology also improves transparency and accountability and keeps companies in control of their data.
Overbeek said blockchain would help HERE create a better route and faster onboard computation in vehicles by relying on cloud databases of ultra-fast 5G networks that could help supply chains and autonomous vehicles that will need near-minimal latency. “Blockchain will help us build that kind of architecture,” he explained, “but it does something else. It makes sure that all these digital ledgers and all these different computation cycles are mirrored towards each other so that you have a single level which is always the true level – if we call it that – where the data state is located “.
Because blockchain data is continuously synchronized across a shared ledger, all parties involved in the supply chain can record and view all transactions as commodities from its origin to its destination, according to Dan Clark, founder and president of Kuebix.
Kuebix, a transport management system (TMS) and creator of a large community of connected shipping, was acquired by Trimble earlier this year thus the two entities could design the largest network of freight forwarders and transporters in the North American supply chain. Freight forwarders, carriers and brokers currently operate on fragmented TMS software. But Trimble is working to create a “single, connected supply chain” where all stakeholders work on the same technology.
“The dependency of that single network was somehow the challenge for the blockchain,” Clark said FleetOwner. “It’s exciting technology when you start looking at what’s happening in the world with COVID and really understand tracking goods or commodities from source to delivery. Being able to track every event that happens, knowing that every event is accurate and real thanks to the blockchain, that’s a powerful and positive thing. “
Illustration: Elenabsl | Dreamstime.com
Keep America fueled
Blockchain could even have saved much of America from the shortage of toilet paper that ravaged the nation this spring as pandemic fears spread and some consumers began hoarding supplies.
“If we had a blockchain earlier in the year, we would have had inventory visibility across the toilet paper supply chain,” said Vasanth Srinivasan, Trimble vice president of architecture and business strategy. FleetOwner.
With blockchain, paper makers, shippers, couriers, distributors and retailers would have easier access to where toilet paper supplies were plentiful and where they were scarce along the supply chain, Srinivasan explained. Instead, the essential supply shortage in early 2020 showed that supply chains in North America were not balanced.
“To build a great supply chain, you need to have access to all the key information,” he said. “Regardless of who makes it and regardless of who transports it, with all this information in the blockchain, you can solve supply problems.”
The potential for transforming supply chains is staggering, Clark added. “When the blockchain first came out, the buzz behind it was unbelievable,” he said, “but that sort of thing has subsided a bit until COVID. Based on the events that happened around the world, there is More and more technology like blockchain is needed for many different reasons, be it the COVID-type pandemic right to national security. It’s only still in its early stages, but I believe it will be an important part of our supply chain future. “
Create visibility
After supply chain nodes threatened transportation of food and pharmaceuticals at the start of the pandemic, shippers in those industries are starting to turn to blockchain, ShipChain’s Monarch noted. As winter approaches with falling temperatures and COVID-19 showing little sign of slowing, blockchain is expected to become more critical.
“ShipChain was founded on the idea of ’Why can you see where the pizza delivery is in transit, with the dots on a map on your phone, but not your multimillion-dollar freight shipment?'” Explained Monarch, pointing out the ShipChain’s goal is to create more reliable visibility in the world of freight transport.
Monarch reported that successful supply chain managers are prioritizing robotics, Internet of Things (IoT) sensors, blockchain, and other digital solutions that offer visibility and flexibility. This digitization of the supply chain makes it more resilient, particularly during catastrophic events such as a global pandemic. Additionally, digitized supply chains offer numerous benefits to the entire organization, such as greater efficiency, profitability and resilience in the face of adversity.
For fleets that have remained on the fringes of the blockchain but are looking to make technology part of their business, Monarch advised them not to be overwhelmed by the complicated nature of the blockchain.
“If you’re not developing software in-house, find another company that focuses on it,” he suggested. “Don’t try to build your development team just for the fun of it. Unless you are a software developer, you should never see a blockchain until you need it for a dispute. And that’s how we want to keep it. It should work in the background like the Internet. ”
