At Trimble’s in.sight user conference, Chris Burruss, president of the Blockchain in Transport Alliance, discussed the future of the technology within the trucking industry. Photo courtesy Trimble
Blockchain in Trucking: Between Hype and Reality
Blockchain technology has generated quite a bit of press in recent years, primarily because the underlying technology enables cryptocurrencies. Applying that technology to trucking may hold promise in the future, but at the present, its application in the industry is somewhere between “hype and reality,” according to Chris Burruss, president of the Blockchain in Transport Alliance.
Speaking at a session during Trimble’s in.sight 2018 user conference and expo in Houston Sept. 11, Burruss quoted figures that show the technologies adoption in other industries has seen rapid growth.
Essentially a blockchain is a “decentralized and distributed ledger,” Burruss explained. Participants in a blockchain system occupy nodes and the transaction ledger is stored on each node. In many ways, a blockchain is like a database in that it contains a group of transactions (the blocks) that are connected together with each block containing a data record along with a unique “hatch” or identifying number. A block must also contain the hatch of the block that precedes it in the chain. The hatch ensures that a fraudulent block cannot be inserted, or an existing block removed from the chain.
No changes can be made to the blockchain without the consensus of all the participants. A point Burruss stressed is that “blockchain is not bitcoin. That’s like saying that the Internet is Facebook,” he said. Rather, blockchain is the enabling technology for bitcoin and other types of cryptocurrency.
There are three types of blockchain: public, consortium and private. A public blockchain (think Bitcoin) is open to anyone. A private one requires permissioned access and a consortium (the one most likely to be seen in trucking) allows access only to members of the consortium or group.
Burruss said that potential uses of blockchain in trucking include smart contracts, carrier performance history, vehicle maintenance, compliance, payments and pricing, cold chain validation and driver information.
Challenges to increased implementation of blockchain in trucking include:
- Scalability: Right now, blockchains are limited to 3-20 transactions per second. As a reference point, Burruss said that Visa can handle about 56,000 transactions per second.
- Data privacy: All data is held by all participants, except for some that has been earmarked as private.
- Collaboration: Many blockchain applications require agreement of protocols and standards within industries, which is what BiTA is working to develop.
- Commercialization: Blockchain apps code is generally open source and can be used anonymously, which make it difficult to protect intellectual property rights.
In addition to these challenges, Burruss said that the technology could be disruptive to current trucking industry practices in that it has the potential to “fundamentally change the industry,” by eliminating intermediaries, expediting payments and settlements and automating proof of delivery.
Current industry participants that will “lose” with the technology include non-compliant shippers and carriers, factoring companies, non-compliant brokers, voice freight brokers and others. Although Burruss said he wasn’t sure “there are really losers or just those who choose to ignore the technology?”
According to Burruss, the current adoption forecast for the technology in trucking is education, case studies, and some early adoption between now and 2020. Between 2021 and 2025 will be a period of growth and full maturity of the technology from 2026 onward.
For more information on the Blockchain in Transport Alliance, visit BiTA.Studio.
I´m a Fleet Management expert, and the manager of Advanced Fleet Management Consulting, that provides Fleet Management Consultancy Services.