The road ahead for Blockchain

Blockchain is more than just a word of the technology industry; it is a digital tool that transforms the way business is conducted in a variety of industries, including transport. While its use in road haulage has not yet achieved widespread traction, behind-the-scenes developments are well under way to advance blockchain applications and governance.

Blockchain technology is based on a distributed accounting system for transactions, which means that data is not stored only on a company's server, but on many servers in multiple locations. The cryptography and verification processes required make the technology more secure than other ways of doing digital transactions, and so far no blockchain has been compromised.

"Think of this as a very elaborate digital recording … not centralized," said Jason Schenker, futurologist and president of Prestige Economics. "Saying" blockchain "is like saying" accounting software ", which can be many things," but the root of the concept is "individual transactions that are encrypted and digitally recorded".

A lot of confusion surrounds the blockchain, partly because the technology is so new but also because some people associate it automatically with cryptocurrencies, like Bitcoin. Blockchain is the technological platform on which cryptocurrency applications are built, but the two are not synonymous.

Similar confusion spread during the early stages of the Internet, when some people used the terms "internet" and "e-mail" interchangeably, said Ken Craig, vice president of special projects at McLeod Software and co-founder of Blockchain in Transport Alliance. "This is a bit of what you're seeing with blockchain right now … Cryptocurrencies are just an application that sits at the top of the blockchain technology platform."

Putting it in use

Blockchain is in his infancy, but "is here and will be disruptive," said Craig. "In the end it will change or replace many processes in the transport and transport sector" as well as reducing risks and ultimately increasing profitability.

Experts indicate that blockchain will reduce a significant amount of documents and increase the operational efficiency of the carriers and their partners.

Smart contracts, also called self-executed contracts, are one of the best-known current uses of the blockchain. These contracts allow tamper-proof documentation for the exchange of goods or services between two or more parties.

While this application could catch on in road haulage, experts believe that blockchain has more promises for industry in other areas, such as the concept of distributed ledger that offers greater visibility and traceability for shared information.

Trucking companies are expected to benefit from position-related benefits from blockchain traceability, including data on service hours. It can also help to demonstrate compliance with trade agreements and regulatory measures.

"Sometimes drivers are participants in commercial transactions that require visibility, you need to know where your load is, if the driver is actively driving and meeting the requirements," said Brad Taylor, vice president of data engineering, AI and learning automatic at Omnitracs.

Storing information on a blockchain could also facilitate the work of regulators. The information can not be lost or altered on a distributed ledger, and third-party regulatory authorities may download the necessary compliance data "without access to applications" that should not be allowed to view, said Andrew Old, senior manager of software engineering at Omnitracs. "Regulatory bodies can validate it [fleets and drivers] they really operate according to the established rules ".

Features such as traceability and transparency make the blockchain a practical tool for storing the chain of custody, such as "where you have a high frequency of transactions between the parties and you need to know where things come from," Schenker said. "This could be a valid case of use for companies that move physical assets".

It is expected that Blockchain will become an important tool for high-performance transport and service sectors with stringent compliance requirements, including hazardous materials or food and beverage transportation, ie cold chain delivery management.

"Food security is great," said Vasanth Srinivasan, vice president of enterprise architecture at TMW, a Trimble brand.

Currently, information on food transport is communicated to the appropriate business partners, "but there is still the doubt that the information obtained is valid," he said.

However, archiving the necessary shipping and compliance details in a blockchain and "securely exchanging this information through business partners so that they can make more effective decisions is important," said Srinivasan.

Blockchains can not be modified once they have been verified and additional data blocks must be added for related transactions.

"If there is always a problem of material quality, quantity or content, everything is traceable … to agriculture," said Schenker.

For example, if a company is at the center of a public health scare because it has to recall a potentially contaminated food product, a blockchain registration could help the company to quickly and easily track each phase of where that product had been, who managed it during transport and where contamination may have occurred.

Food security – in particular, more reports of food contaminated with salmonella and E. coli in 2018 – is what recently prompted Walmart to distribute blockchain in its shipping operations. He asked suppliers of fresh and leafy vegetables to start tracing products on farms using blockchain. Systems should be fully operational by the end of next year.

Walmart's declaration of change reads, in part, "It is critical to respond quickly and accurately to food safety issues like these, but with the traditional paper-based method to capture information that exists in many farms, packaging and warehouses. , tracing important data from multiple sources is extremely time-consuming. "

Walmart has indicated that sometimes the process takes up to seven days to track a single item by contacting a supplier, receiving paper records and using records to identify and contact the companies that transported the items to the Walmart distribution centers. It is expected that the transparency and accuracy blockchain will reduce that process to a few seconds.

In addition, faster and more accurate transaction verification and proof of delivery via blockchain could speed up billing by shippers and receiving payments from couriers. The paper processes and delivery tests required through most of the existing systems involve long waiting times for payments. Furthermore, every company requires different forms and data sets. However, designing a standard blockchain system could help companies capture and verify data in a simpler and faster way.

"As we look at this ecosystem, shippers want carriers' visibility, and carriers want faster payment from shippers," said Srinivasan. "Having a blockchain system for some of these exchanges is beneficial for both business partners".

Despite the advantages and the fact that new applications continue to emerge, experts warn against getting caught by the blockbuster enigma and trying to implement the tool without first having a solid use case in mind.

"Blockchain is not the only answer, and in some cases it is not the best answer," said Schenker.

Search for standards

Many companies want to be at the forefront of blockchain adoption, but there are reservations.

"There are many opportunities, but we're still not sure which problem we're trying to solve with blockchain," said Holly Coombes, Navistar's subsidiary general manager, Blue Diamond Parts. "We are watching, listening, watching and trying to get our arms around where to start."

Trying to grasp every aspect associated with the blockchain and then adopting the technology is like "boiling the ocean," Coombes said.

"In a sense it's so abstract that we're trying to figure out what a solution could be before, because there are so many different applications," he said.

A good number of fleets and their partners have looked into use cases on how the blockchain could solve some of the problems in the sector, but most of them reach the same conclusion: it is not yet a sufficiently mature technology to guarantee huge investments.

"After researching and working on [blockchain] for a year now, we have realized that it is first necessary to set standards, "said Srinivasan of TMW.

This collective implementation led to the formation of the Blockchain in Transport Alliance in 2017. BiTA aims to create standards for the use of blockchains in the transport sector, which could reveal further cases of use.

The interest in the blockchain and the membership of the BiTA is much stronger than the organizers expected. They predicted that the group would have had a couple dozen members at the start of 2018, but it has over 500 and received more than 2,800 applications. Members come from a variety of transport companies and related organizations, including couriers, logistics service providers, equipment manufacturers, technology developers, service providers and government entities.

Even small and large companies are part of the collaboration, with giants like UPS, FedEx, Target, Google and Anheuser-Busch among the members.

"[BiTA is a] common forum for people to talk a little more freely – sharing their experiences and insights without giving away their secret sauce, "Coombes said.

The alliance has formed technical committees in three areas: data and formats, finance and payments and interoperability. Each technical committee is made up of several working groups and others may form the line, along with a member certification program to verify that a company is operating in accordance with the BiTA standards.

Overcome challenges

BiTA's work to create blockchain standards in the transportation sector includes addressing some of the development and implementation challenges that accompany emerging innovation.

Although the blockchain is praised for its transparency, there are disadvantages in having that kind of visibility that has yet to be worked out. For example, carriers must protect drivers' identities and sensitive information when they render transparent on a blockchain service hours and other ELD-centric data. For now, this is a critical point.

"You can not expose all the information because you're violating the privacy of the driver," said Taylor of Omnitracs. "Multiple parties worry about where a driver is and their service time, but the parties … should not have more visibility on that driver after the packages have been delivered."

Likewise, the transparency of blockchain technology could expose business secrets or details on contract prices that companies wish not to make public. At this time, technology as a whole does not offer the ability to isolate sensitive information and hide it from other parties that have access to the blockchain.

Data security is a common problem, and some people are reluctant to use blockchain for this reason, said Srinivasan of TMW. But the knowledge of the developers of the sharing of private and public information is growing, as well as the ability to limit those who have access to a blockchain through techniques such as data encryption.

Because blockchain technology is so new, and because it processes and stores large amounts of data, optimal processing capabilities have not yet been realized.

"Transactions taking place on a blockchain could take up to 10 minutes – they are not instantaneous computer transactions," said Rich Wigren, senior corporate analyst at McLeod Software.

However, the tool provides efficiency over other methods of secure record storage and processing speed will continue to improve.

The interoperability between individual blockchains and the companies that use them is one of the other challenges that BiTA is examining. The diverse membership of the alliance reflects that many actors in different sectors need to find ways to work together. For example, carriers and shippers should implement compatible technology.

"There is not necessarily a blockchain that dominates them all, but rather different implementations," said Old Omnitracs. "Much of what is about to emerge is how the different blockchain implementations will work together in different industries so that we can make innovative changes to our business".

Experts agree that eventually the blockchain will be widely used and automatically incorporated into digital architecture. Users will not discuss or even recognize that they are working with technology, similar to what happened with internet maturation. But it will take years to reach that point, especially for the road transport industry.

Craig predicts a great learning curve over the next two years on the blockchain, its effective use and overcoming challenges.

"Probably from about 2021-25 you will see growth. … Then around 2026 or later, we will begin to see maturity [and] it will be widely adopted and considered an integral part of the supply chain ecosystem, "he said.

"It is always difficult to predict how much technology will be adopted … We see that the blockchain is eventually pervasive as the Internet," said Taylor Omnitracs.