Everyone has heard of the blockchain in one way or another; Bitcoin is the most familiar representation of it.
At its most basic level, blockchain is a general ledger that allows complete transparency and accountability during the entire process of a transaction, whether it's a bitcoin, a widget or any other kind of communication. It allows all the actors involved in the chain to participate collectively and efficiently without surprises.
When it comes to the transport industry, we have historically based on electronic data interchange standards (EDI). But the reality is that EDI is quite archaic. A significant problem with EDI, when compared to blockchain, is that EDI transaction standards differ from one sender to one forwarder and one courier to another. As a result, an EDI user must adhere to many different "custom EDI standards". Also, EDI interfaces are very specific: if you do not use a single character or line of code, the EDI transaction will fail, causing a significant heartburn both sides of the transaction.
An example could be a "simple" load offer. The freight forwarder charges the cargo through its own transport management system (TMS) to its transport base using an EDI transaction. Each carrier can have its own EDI interface customized for its specific TMS or can use a value-added network (VAN). These connections may have additional custom interfaces for other brokerage services, systems, or groups. The original cargo offer is no longer on a continuous chain, but is rapidly redistributed over a network of different services and "standards"
More specifically, once a load is offered it can go through multiple systems, being continuously modified for different "standards" before a tariff is agreed or the load is formally accepted. In short, the original EDI transmission can be changed throughout the transaction, allowing the potential for errors, duplications or perhaps even malicious intent. The end result is that once the EDI is transmitted, all visibility is lost as it passes between the systems until it eventually returns as an invoice or bill.
With blockchain, the original information (block) remains intact and can not be changed. As additional blocks are added to the chain or when the block passes through multiple systems, all participants can refer to the initial block and all the blocks added later. The blocks are constantly evaluated to ensure that they are intact, allowing complete visibility and accountability throughout the transaction. This process eliminates the interpretation of a carrier, a sender or a customer.
Currently, several companies are developing several blockchains to serve very specific functions within the supply chain. Investigation alliances are also forming, including one for the transport industry, the Blockchain in Transportation Alliance (BiTA). BiTA is currently working to standardize a blockchain methodology and a series of simple contracts, which would be used at the sector level.
People talk about blockchain as a disruptive technology. The reality is that it could help streamline everyone's business. However, the interruption lies in the fact that many companies are not yet investigating it, they do not understand it or have not allocated funds for an investment in it. If an important customer (or competitor) chooses to use the blockchain, and you are not updated, you have the potential to lose that customer to someone who is.
Fleets must start looking at the blockchain, if they have not already done so, to have a basic understanding of it. Assign an internal sample to begin the process of finding what your company needs to know. That does not mean you have to start investing in it, but rather engaging yourself to understand it. Fleets must ensure that they do not lag behind when the industry, or your client, accepts blockchain as a new standard.