Blockchain Technology – Final Post in Series
In the last of the series, we take one last look at more areas that Blockchain technology could make an impact in transportation.
The entire life history of a truck or trailer could be stored as part of a Blockchain. This could start at the factory when the manufacturing order is put into the OEM’s ERP system. Additional entries could be made when components are added to the vehicle, possibly through barcode scanners (and eventually RFID) that pick up the component information (make, model and possibly serial number of each part). When the truck has been handed off to be transported to the dealer, that information (carrier, was it bunked, etc.) could be included in the chain. The dealer PDI and any dealer installed equipment will be recorded. Finally once it goes to the end customer, their maintenance program could continue to provide date that adds to the chain. Additionally one could include all licensing and permitting information as well. A complete history of each unit can be formed. This information could be shared between parties – for example between the owner, the dealership and the OEM – to allow for a complete picture regardless of who is working on the vehicle. Belt got changed on the road, no worries, your dealer will know who did it and what belt was put on it. Part warranty – got that covered as there will no longer be any doubt as to when it was installed and by whom. Taking it a step further, the OEMs can have access to mean time to failure information and then work with the dealers and customers to customize preventative maintenance programs and recalls to proactively deal with issues that other customers are having. Think of it as having access to the fleet knowledge of thousands of trucks instead of just your own fleet in terms of what is causing issues with a specific model or engine.
If the data is anonymously aggregated it could be made available during the purchasing process to improve the specifications in a more data-driven fashion. You may have been spec’ing your trucks in a certain way based on your own experience. However another fleet running similar lanes may be finding better success with a different spec. Right now you are constrained by your relationship with the dealer to bring that information to you. If maintenance data was in an anonymous Blockchain you would have that data at your fingertips, ready to help you potentially improve your decision making process. Finally, this data could be shared with the DOT and other regulatory bodies as proof for audits. With such a system, trucking associations would be able to lobby for reduced scale inspections for carriers that are using such a system and meet agreed upon criteria in terms of compliance.
Capacity Monitoring – Will Load Boards be affected?
Right now when we get stuck needing a load to get your driver back home we generally turn to the load boards where you can get stuck with bad freight and/or low rates that could get undercut by someone else. A Blockchain can help this situation. By allowing a degree of visibility of other members of a Blockchain you can open up the possibility of being able to lane balance with multiple carriers. By granting access to the Blockchain the group can control the quality of the carriers involved, reducing risk and eliminating the need to perform carrier compliance and due diligence. Once a member is approved everyone has visibility to their level of compliance. This additionally would be something that you could bring to your customers in terms of proof that your partner carriers meet the same qualifying criteria as the customer wants. Such a system allows each participant to see where the other’s fleets are or alternatively, where the other partner’s have loads that they need to cover. All parties can then react quickly to changes in demand throughout the network and anticipate where and when those changes may occur. This scenario also provides a level of evidence of past performance history. This will further remove any distrust between members and reduce dispute resolution costs between the parties. This is an example of why a distributed database of information if valuable to everyone in the supply chain – consumers included.
Payments and Pricing
Finally, payment processing and settlements could be securely handled through a Blockchain. All the necessary information will be visible between both parties to the transaction which will allow for the possibility of automating the settlement process. This should result in lower freight auditing and processing costs. Additionally, the invoicing process will have the potential of also being automated by setting up rules that get triggered as information is made available to the chain. As an example, if the vehicle breaks a geofence around the delivery customer, that would get entered into the chain as one of the required data points. Submit a scanned POD to the chain and that may be the second requirement (eventually no POD will be needed – RFID will take care of all that and the chain of custody). Get a second GPS location leaving the geofence could be the final requirement that gets fed into the chain. Meeting all those criteria could then trigger the invoice to be generated and entered into the Blockchain. At the customer’s end they would also set the invoice and go through their own set of required data that they will examine the Blockchain for. Once those criteria are met then the payment is automatically queued for a period as specified by the (smart) contract. The ability for either side to audit is there because of the openness of the data. By consistently meeting those criteria each party raises their level of trust in the other, resulting in the incumbent being much more difficult to be removed as long as they continue to perform at the desired level. A secondary benefit is that scorecards can be produced quickly and efficiently by either party and could result in the ability of both sides to collaborate and make improvements in a data-driven manner. Think of the overheads you could save, as well as freeing up employees to handle greater value added (revenue producing) activities.