What is It?
Blockchain is the technology that underpins digital currency (Bitcoin, Ethereum, Dogecoin, and the like). The tech allows digital information to be distributed, but not copied. That means each individual piece of data can only have one owner. While this is a revolutionary technology, the concept is surprisingly simple. Blockchain is a sophisticated, online ledger system. Think of a super-cool spreadsheet that keeps data secure, transparent, trustless and publicy accessible on a ledger that allows us to securely transfer ownership of units of value using public key encryption and proof of work or proof of stake methods
The Transporation Industry is Inefficient
Every day there are millions of dollars tied up in disputes for payments in the transporation industry. Processing and administration costs have risen substantially due to over-reliance on paper transactions. 120k of the 200k plus registed trucking companies in the US alone have 2 trucks or less while an astounding 90% of trucking companies have six trucks or fewer. This causes the industry to struggle matching shippers to carriers. Needless to say, the transporation industry is inefficient.
How Blockchain Enables More Efficient, Cost-Saving Business Operations
New blockchain-enabled platforms will allow easy coordination of documents on a shared digital ledger, making physical paperwork largely unneccesary. By using smart contracts, approvals and customs clearance will be quicker and more efficient, reducing processing times for goods at checkpoints. Companies need updated, secure and authentic data to make decisions. Digital ledger technology ensures trustworthy dataacross the transporation and logistics ecosystem, since the entire network contributes to data validation. With rising demand for same-day and one hour delivery services, traditional tracking technologies will not scale. Blockchain provides a scalable, immediate solution for order tracking and authentication.
The Keys Moving Forward
Electronic Data Interchange (EDI) has been the standard system in the logistics industry for over 25 years, and the industry still lacks an overall EDI standard. Instead, there are multiple different versions of the technology, causing a mess of inconsistencies from company to company which contribute to many of the inefficiencies in trucking. The future for blockchain and digital ledger technology in the world of transportation and logistics is bright but it is important for universal standards to be both created and adopted moving forward.
The evolving landscape of the freight industry means that businesses need to be mindful of the projects and companies they get involved with. Planning for long-term success includes paying attention to credit data and using that information to make informed, business-first decisions. TransCredit is a reliable, proven partner in business credit reporting. Contact us today.