The Blockchain is undoubtedly one of the most transforming technologies of the modern day. Since the time it surfaced till date we have seen its applications grow multiple folds. The prime reason for this success rate it the multitude of benefits that Blockchain has to offer. The roots of Blockchain originated from cryptocurrency exchange. Earlier, digital money transaction was the only application of Blockchain, however, over the period, it has transformed, and now we see myriads of application in the fields of healthcare, medicine, politics, academics and many more. In this blog, we will bring forth how Blockchain can prove to be revolutionary for the transportation industry.
Blockchain is a distributed ledger technology which stores all the information in chronological order. This information is present in the ledger in the form of blocks, and each block is attached to the other. Thus, if anyone wants to alter or change the information, it becomes almost impossible. This feature of Blockchain makes it find application in almost all the areas where there is any kind of exchange. This can be monetary or information or data.
Owing to this, provenance, immutability, transparency and data security becomes an integral feature of Blockchain, and all industries are trying to explore this. One such industry where Blockchain can prove to be beneficial is the transportation industry.
When we talk about the transportation industry, then you must know that it forms an integral part of the supply chain. In fact, transportation is the backbone for all the industries. Thus, it becomes imperative that companies must have a seamless supply chain. Hence it is important that you must that the transportation industry must run seamlessly.
What Are The Challenges In The Transportation Industry?
Before heading to understand how Blockchain can revolutionize the transportation industry, it is important to understand the challenges that the sector is facing. From dispute resolution to administrative efficiency and order tracking, Blockchain has the solution to the problems that have been plaguing the transportation industry for decades. Let’s explore some of these issues.
One of the primary concern that is present in the transportation industry is of payment and dispute resolution. Did you know that every day around $140 billion is tied up in dispute settlement payments in transportation? This involves a lot of time and many times the transportation industry depends on the third party, but with Blockchain, there is no need for the third party. With effective Blockchain tracking system, we can easily track the vehicles and get to know their status.
2. Transportation Of Temperature Controlled Products
The problem arises with the temperature controlled goods, as per reports around 8.5% of sensitive pharmaceutical shipments experience temperature differences. It adversely affects the shipment of such products as they cannot make it past custom because they exceed the temperature specification mentioned by them. This leads to wastage of transportation cost. Let us see how Blockchain can resolve this issue.
With the help of Blockchain for data authentication, IBM has collaborated with other global companies to launch a platform that can guarantee the required efficiency, authenticity, and transparency in the supply chain. When we talk about temperature controlled products, the transportation relies on the on-time delivery and this increases with Blockchain.
3. Smart Contracts
This is yet another field where we can find the application of Blockchain in the transportation industry. Having a smart contractor ensures as and when the product is delivered the smart contract gets executed, and the payment is initiated. Well, smart contracts are one of the best application of Blockchain technology. It is a pre-programmed contract which has defined conditions. These conditions are pre-decided, and when these conditions are met, the payment is executed.
4. Easier Carrier On-Boarding
This is yet another area of application of Blockchain. Similar to tracking od records, Blockchain can prove helpful in validating the record of the driver. This becomes beneficial when a freight broker is trying to reach capacity for a load at a location. If the broker identifies a new carrier around, it can use the Blockchain ledger to verify the carrier and assign the load. With the help of Blockchain technology, we can have a decentralized system where all the records of carriers across the industry can be kept.
5. It Makes Load Board More Reliable
One of the common problem that the transportation industry faces are the load board. In the traditional system, it is possible that the data could be changed and thus pose wrong load demand. With the help of Blockchain, the shippers can easily feed the time-stamped loads which are verified by the Blockchain network. This data is unalterable.
6. IoT For Vehicle Communication
Many companies are implementing V2V or Vehicle to Vehicle communication. This system allows the various freight vehicle to communicate thus ensuring fuel efficient.
This data when stored on Blockchain can help the transportation companies to streamline their operations.
The crux of the matter is that with the help of Blockchain technology we can believe that it will help in streamlining the transportation industry. It also helps in better vehicle communication and also reducing the need or dependency on middlemen. It will eventually lead to saving the cost and ensure fuel efficacy.