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Connected vehicles and the potential of blockchain


If you think the transportation industry is connected today, just wait. We’re only beginning to scratch the surface of what connectivity can do for our industry, and the arrival of blockchain will take it to a whole new level.

But even before that happens, the vehicles we operate will continue to become more connected. I was in Duisburg, Germany, in early February for the launch of the new Mercedes-Benz Sprinter, which officials claim was designed to be a constantly connected “node in the Internet of Things.”

Mercedes is the first OEM to use what3words for navigation. This technology uses a grid of 57 trillion 3×3-meter squares, and assigns each of them a three-word identification tag. Using this technology, a vehicle can be directed precisely where it needs to go, even if it’s a specific door at a loading dock or a utility tower that’s in the middle of a field.

It’s a good example of how even technologies such as GPS, which we’ve come to take for granted and utilize in our business every day, are being refined and improved upon.

Now we’re hearing more about blockchain technology, which we cover in this month’s issue of Truck News. Like many, I was at first dismissive, thinking of it as a technology useful solely in the cryptocurrency world, and I rejected the idea that freight transactions would ever be carried out using Bitcoin.

However, it’s clear now that Bitcoin’s underlying blockchain technology does have many real-world uses in the transportation industry, especially as newer generation vehicles like the new Sprinter are being designed specifically to communicate with the world around them.

What excites me the most about blockchain is the ability to conduct transactions using “smart contracts.” These can address many of the pain points felt by trucking providers today. Take, for example, cash flow. A smart contract can execute payment the moment a load is delivered. Sensors on the truck or an in-cab app can confirm delivery of the load and the payment can be made instantaneously. Say goodbye to 90-day payment terms and the reliance by small businesses on invoice factoring to sustain cash flow.

Or, how about the collection of accessorial charges? A smart contract can be written which, again using sensors on the truck, records when the vehicle arrived at a facility to be loaded or unloaded, and when it left the yard. If the unit was detained for more than two hours, for example, the agreed upon detention charge would automatically be applied to the payment. No more arguing with shippers and receivers about how long the equipment was held up for at their facility and fighting for the payment of detention charges.

Another potential application in trucking, described to me by Craig Fuller, managing director of the Blockchain in Transport Alliance, is the creation of a universal driver ID, that would give members of a blockchain visibility of the driver who is handling their load. Today the driver, who has the single biggest influence on how that load is handled and delivered, is mostly anonymous to the shipper, operating under the flag of the carrier he or she works for.

While some privacy concerns will no doubt need to be accommodated, I see an opportunity for drivers operating under a universal driver ID to differentiate themselves, effectively creating their own brand and perhaps even commanding a premium based on a proven track record of safety, reliability, and customer service excellence.

If you think about how the Internet and connectivity have changed the business of trucking in the last decade or two, I believe we will see a change of equal or greater magnitude with the arrival of blockchain and the next generation of connected vehicles.


James Menzies

James Menzies

James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.
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