Blockchain is a term that evokes both excitement and fear. The abstract concepts powering blockchain can be overwhelming, and ShipChain CEO John Monarch, and Trucking CFO and Certified Public Accountant, John Turner, recently had an opportunity to sit down on the Road Dog Live Show to discuss the value of blockchain and its potential impact on the supply chain. Read on for a summary of the key points discussed in the interview and what they mean for the status of blockchain in the supply chain today.
Why Did Blockchain Come to Fruition?
The evolution of blockchain goes back to the need for secure communications through the internet. As the internet grew to become a primary sales funnel, the risk of cyber attacks grew more prominent. There will always be hackers, so it is up to each company to ensure proper encryption of information to protect others. Even in non-malicious instances, users have the ability to edit or delete data after the fact. This creates a problem, and blockchain has the potential to solve it.
How Does Blockchain Work?
As noted by Monarch, blockchain is an invention that uses a communication network which is comparable to a lockbox in a bank. However, instead of a user and the bank being the only people with keys to the lockbox, all users have a key. Such openness to authorized parties—members in the system—reduces the risk of accidental or intentional deletion of data, creating an incorruptible resource.
Everything occurs within milliseconds, so it makes the system easy to use.
An Example of Blockchain in the Supply Chain
Consider the way drivers may use blockchain. Electronic logging device (ELD) data could be pulled and logged. The driver’s permanent resume may be placed within a blockchain-based system, and since only authorized users can see it, trust increases.
It is a trustless system that makes communications fair and reduces risk. With blockchain, individuals can verify identity, trip details, and complete payments. Essentially, blockchain makes it easier to work together by giving truckers, carriers and brokers peace of mind.
Blockchain restores control for drivers with their carriers, brokers, and shippers. It facilitates relationships, and by restoring trust it helps to keep relationships going. This is a win-win for all parties. Even parking spots will come under the influence of blockchain.
ShipChain Has Launched a Blockchain-Based Platform and Continues to Educate People About the Technology
Throughout 2019, drivers will be using our ShipChain app, providing feedback to refine the capabilities of the system. Companies will leverage the app to confirm transactions with other third parties and effectively gain more visibility and efficiency.
That being said, the future of blockchain will depend on how easy it is to use.
Blockchain must become a user-friendly system for truckers. Ease of use will be critical to the adoption of blockchain in the supply chain and throughout the industry. The level of technology in use in trucking will help reboot it. It’s a connected industry, and this reduces the misconception of isolation in trucking. As a result, blockchain will help attract the next generation of truckers and supply chain professionals.
How Blockchain Will Reduce the Capacity Crunch
Aside from attracting more talent, blockchain holds additional potential in tackling the capacity crunch. Blockchain reduces capacity constraints by encouraging collaboration, making the industry less reactive. More visibility begets better efficiency. Blockchain can automate processes, helping trucks to find parking spaces down the road, manage loads, and eliminate wasted hours, miles and capacity. More information will help carriers and drivers move larger amounts of freight with fewer delays.
Over at ShipChain, we are working to teach everyone about how blockchain will benefit the industry. Above all else, remember these points from the interview:
- Being able to trust the system without having to believe everyone that is a part of it. -Monarch
- Blockchain can be instrumental in solving resource issues, and as trucks move forward into the world of technology, such as electric trucks, blockchain could solve problems that haven’t become evident yet. -Turner
Blockchain is exciting, and it is only a matter of time before the technology is the new standard form of encryption and communication in a connected industry. To find out more about how blockchain is continuing to shape the trucking industry and to get a demo of our Track and Trace platform, get in touch with us!