KISSIMMEE, Fla. – There’s a new buzzword in the trucking sphere. Say goodbye to uptime, ELDs, and driver shortage.
Blockchain is the latest technology that all the early adopters want to or already have invested in, that is promising to change the trucking game.
Proving itself to be up-to-date on what’s happening, the Truckload Carriers Association (TCA) included a seminar on the topic at its 80th annual convention in Kissimmee, Fla. on March 26.
The educational seminar saw Daniel Pickett, the chief data scientist at FreightWaves and Timothy Leonard, the executive vice-president and CTO of Trimble at the podium, explaining to conference attendees what blockchain is and how and why fleets should invest.
Blockchain, is, essentially, a digital ledger in which transactions between two parties are made efficiently and recorded permanently.
“Blockchain is the DNA for data,” Pickett said. “It’s a record to track linage and like DNA it is extremely difficult to fake or alter that history.”
Today, there are more than 2,000 unique patents within blockchain, Leonard said, and that number is climbing every single day. The top blockchain patent owners include the Bank of America, MasterCard, TD Bank, as well as IBM and Dell.
Just last year, Deloitte predicted that in 2025, 10% of global GDP would be tracked by blockchain. And just in transportation alone, Morgan Stanley thinks it could be a $500 billion opportunity, Leonard said.
Particularly of interest to the trucking industry, is the feature of smart contracts that work under the blockchain umbrella.
“One feature that has people really excited in the transportation industry is smart contracts,” Pickett said. “You can think of smart contracts like a Microsoft Excel formula. If you change the inputs, the outputs change. If the truck is there for more than 90 minutes, you can trigger detention pay. If the reefer temperature drifts above your number, we don’t trigger a payment. This is a huge opportunity to fix massive problems within the industry.”
Pickett explained that with blockchain, little disputes over how long the driver was waiting isn’t argued, but proven.
“Every computer in the network will be on board and agree that this shipper owes this driver detention pay because it knows the GPS pings,” he said. “Blockchain is really important because it prevents humans from altering the truth later. Humans have a complicated relationship with the truth.”
As with other technologies, blockchain will come with its fair share of challenges.
Pickett said the four major challenges he is zooming in on are scalability (right now the blockchain/bitcoin network processes a couple dozen transactions per second, while Visa does 60,000 per second), data privacy, collaboration between shippers and carriers, and ultimately, commercialization.
And while there is a lot of buzz around blockchain, Pickett said the technology reaching maturing is a still close to a decade away.
“Right now we are in a test and learn phase,” he said. “If anyone tells you we are in 100% end to end blockchain, that’s a bold claim. What I see right now is, if you’re a carrier, shipper, or logistics company, you definitely need to be paying attention and learning. If you’re in software, you need to be thinking about proof of concepts and trials.”
Pickett said that in the early 2020s we will see blockchain systems running parallel with production systems, and in some cases maybe even outperforming legacy systems on certain tasks.
“By 2026, I believe blockchain will reach maturity,” he said. “And then we’ll be saying, why did we ever do this on paper, by phone or fax?”