Blockchain: A Cure (in part) for Detention Woes?

Detention continues to be a major issue plaguing the trucking industry. Although some fleets report no problem securing accessorial revenue to offset their detention time, many (especially smaller fleets) have communicated challenges asking for (and collecting) detention revenue. For the smaller fleets, many feel they are at the mercy of the large shippers or 3PL’s. Sure, you can ask, but it’s going to delay the final payment of the freight bill (and that still won’t guarantee the detention revenue is fully collected).

Part of the issue, as I interpret it, is that many companies (on both sides) are operating with an incomplete set of data. The solution to this issue (in part) could be the introduction of Blockchain technologies into the supply chain. Blockchain is the technology which allows Bitcoin to exist, a ‘virtual ledger’ that clearly defines ownership and prevents fraud, while also eliminating the need for a trusted middleman (e.g. Bank, Trust Company, Custodian).
Blockchain is now being used to add transparency and insight into the global supply chain. As a perfect example of how Blockchain works, and the practical application in transportation, here is a short video by IBM:

At it’s core, Blockchain is a distributed ‘ledger’ in which history cannot be modified, but allows for chains of information to be added, included ownership. Parts, or all the information can be shared between many parties, without the need for a third-party intermediary.

Although this technology (as described in the video), will provide significant added value to the supply chain, the one specific item it will eliminate is the conflict between the trucking company and the shipper about detention revenue/time owed. If the contract clearly defines when, and how much detention revenue will be applied (communicated via the described Smart Contract), it eliminates the gray area that is currently driving down the margins of many trucking operators, who deserve this compensation in return for lost productivity.

Going forward, we will be providing focused updates on Blockchain, and its future in trucking, including areas which may potentially increase the potential liability for carriers.

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