People involved in transportation are recognizing the opportunity blockchain represents for the industry. The Blockchain in Transport Alliance (BiTA), for example, was created as an open forum to those in the industry interested in leading the evolution of the supply chain through the opportunities offered by blockchain. Big Companies like UPS, FedEx and Bridgestone are members of BiTA. In transportation, blockchain could increase the efficiency and transparency of the entire shipping process including matching shippers with carriers more easily, simplify payments, reducing the number of intermediaries and more. There are a wide number of applications in the transportation industry in which we can use blockchain.
With the introduction of blockchain in the transportation industry, one of the major application of this is smart deals between shippers and carriers. With smart deals, conditions are predefined and recorded on the blockchain. Once conditions are met, the smart deals are automatically executed. When the transactions are recorded and validated on the blockchain successfully, payments are immediately sent. This simplifies the method by automating steps and eliminating intermediaries and their associated costs.
The blockchain helps to reduce costs in the freight Industry because tasks under the blockchain are self-executing and only executed when the precise conditions are met. The blockchain helps to eliminate the administrative costs and it removes all the probable errors that may have occurred.
The blockchain and the Internet can come together to form an unbeatable combination which would aid in improving the effectiveness and efficiency of the trucking and transportation industry. Vehicle-to-vehicle communication provides means for multiple freight vehicles to make a convoy and enhance communication that would improve fuel efficiency and safety.
In addition, there would be a deepening level of trust in the entire shipping process. Shippers would also have a high degree of visibility of the entire supply chain with blockchain since each party validates and records transactions throughout the whole process. This increased transparency and tracking ability would, in turn, discourage fraud and cargo theft, which continues to plague the industry and in 2016 resulted in losses of over $114 million.
The blockchain is here to remain and therefore the blockchain might solve a number of transportation issues and stress for buyers, sellers, and transportation companies. The role of blockchain in transportation and logistics will continue to grow and with it, the entire industry’s efficiency and profitability. Get in touch with the experts at Tenax Transport today for more information and updates about the future of blockchain in the transportation industry.