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Blockchain in Freight Transportation


Investopedia defines Blockchain as a distributed database that holds records of digital data or events in a way that makes them tamper-resistant. While many users may access, inspect, or add to the data, they can’t change or delete them. With Blockchain, transactions agreed by consensus are added to a block, a unique cryptographic code is calculated of the block, and that code is added to the following block creating a unique chain of blocks containing all the transactions.

The so-called distributed ledger is a technological system that is an asset database that can be shared across a network on multiple sites, geographies, or institutions. The original information stays put, leaving a permanent and public information trail, or chain, of transactions. The decentralized and distributed digital ledger contains transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. In short, Blockchain is a record-keeping mechanism that makes it easier and safer for businesses to work together over the internet.

The most popular application of Blockchain technology is Bitcoin, the currency system. The good news is that the Blockchain protocol can be used for non-currency purposes as well.

Though it was initially intended for financial transactions, businesses of all kinds are getting creative with the so-called Blockchain ledger, as it can be used to record, track, and verify trades of virtually anything that holds value. From ride-sharing to cloud storage to voting, companies in all industries are beginning to see blockchain’s potential. Earlier this year, consulting firm Deloitte predicted that by 2025, 10% of global GDP (approximately $12 trillion) would be built on top of Blockchain applications.

Since Blockchain technology enhances security and transparency, it could have a major impact on all types of supply chain transactions. Every time a product changes hands, from supplier to transport company to manufacturer to transport company to consumer, the transaction could be documented, creating a permanent history. This could dramatically reduce time delays, added costs, and human error that plague transactions today.

Smart Contracts that have computer codes, attached to Blockchain transactions, can be executed under predetermined conditions. The will help facilitate, verify, or enforce the negotiation or performance of a contract. A contract assumes that everything happened as per planned. With Smart Arbitration, either party can initiate a dispute electronically, and the dispute can be sent to an arbitration process before settlement.

Adrian Gonzales, president at Adelante SCM suggested, in a recent article in Spend Matters that Blockchain could become a new “supply chain operating system” based on its decentralized architecture, which “has the potential to trigger a new wave of innovation in how supply chain applications are developed, deployed and used. The Blockchain, in essence, could become the new operating system for supply chain operating networks — like Descartes, Elemica, GT Nexus, LeanLogistics, One Network Enterprises, and others that combine B2B connectivity with software applications — and also help federate those networks.”

Similarly transport companies could benefit in several ways. The following were some of the proposed applications as identified by Craig Fuller, Chief Executive Officer of TransRisk and Chris Burruss, President of the Blockchain in Trucking Alliance in a recent Stifel presentation.

• Recording RFPs and Transactions - Immutable record of agreed economics

• Payment and Settlement solutions - Quicker, cheaper payment

• Internet of Things - Parts Warranties, Vehicle Servicing, Odometer recordings

• EDI Communications - Communications with no intermediary

• Proof of Delivery - Recorded on Blockchain, available to relevant parties.

• Proof of Provenance (chain of custody/bread crumbs) - Verifiable provenance with long supply chains.

• Self executing Smart Load Contracts - Contracts executed and arbitrated using Blockchain, lowering risk and costs for both carriers and shippers.

To advance the process, Blockchain in Trucking Alliance, headed by Mr. Burruss (, has been formed to develop market standards. There are 260 companies that have applied (6 of the top 10 3PLs); at least one member touches eighty-five percent of the trucking transactions.

In Summary, Blockchain offers a unique value proposition to shippers and carriers. There are currently Blockchain initiatives in a broad array of industries.

As an example, a group of leading companies across the global food supply chain recently announced a major Blockchain collaboration with IBM intended to further strengthen consumer confidence in the global food system. A group of leading companies across the global food supply chain today announced a major blockchain collaboration with IBM intended to further strengthen consumer confidence in the global food system. The consortium includes Dole, Driscoll’s, Golden State Foods, Kroger, McCormick and Company, McLane Company, Nestlé, Tyson Foods, Unilever and Walmart, who will work with IBM to identify new areas where the global supply chain can benefit from blockchain.

One Network Enterprises, a global provider of multi-party digital network platform and services, recently announced ONE Chain, a new solution that empowers trading partners to fully harness the power and potential of blockchains. ONE Chain allows organizations to build and deploy sophisticated, highly scalable supply chain and other multi-party blockchain applications on top of the blockchain.

This new technology has some significant momentum and will likely be a key component of many elements of the freight transportation industry in the future.


To stay up to date on Best Practices in Freight Management, follow me on Twitter @DanGoodwill, join the Freight Management Best Practices group on LinkedIn and subscribe to Dan’s Transportation Newspaper (



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Guest Tuesday, 16 January 2018

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