Blockchain, once overhyped, finds real transport cases – Fleet Management

Five years after blockchain technology burst onto the transportation scene, you may be wondering what happened to it.

In 2017, blockchain was touted as the answer to transportation problems ranging from supply chain visibility to outdated EDI (electronic data interchange) technology. A new group, the Blockchain in Trucking Alliance, was formed to promote the use of blockchain technology in trucking.

BiTA was launched by Craig Fuller, Managing Director and CEO of TransRisk, with founding partners including McLeod Software, Triumph Business Capital, US Xpress, Convoy, 10-4 Systems and Fleet Complete. By the end of the year, it had expanded its focus to all transport and changed its name to the Blockchain in Transport Alliance. Companies such as Penske and UPS joined the group.

With blockchain-compatible transactions, BITA claimed, the trucking industry could gain several benefits, such as instant payments to drivers upon delivery, self-managed fuel and maintenance payments, fully automated settlements, and endless record-keeping of carrier history and security.

Blockchain is a combination of technologies that allow transactions between parties via a trusted, shared ledger. Each transaction is encoded into a block, which becomes part of a chain of blocks. Entries or changes to the chain cannot be made without authorization from all participating members. The most famous use of blockchain technology involves cryptocurrencies, such as Bitcoin.

The Blockchain in Trucking Alliance offered this definition when it launched: “To put it simply, a blockchain is like a database – it’s a way to store value and transactions.” The key is that the database is “immutable.” An IBM white paper on the subject noted that in traditional transactions, each party maintains its own record (or ledger) of each transaction. This leads to each participant having their “own version of the truth”, rather than one version of the truth that all participants agree is correct.

Everyone jumped on the bandwagon. But five years later, we’ve only seen a handful of trucking applications using blockchain.

The Blockchain Hype Cycle

With recent cryptocurrency scandals casting a shadow over blockchain in general, trucking reporters at the McLeod Software User Conference asked company officials about the current state of the technology for transportation.

Ken Craig, CIO of McLeod Software and member of the board of the Blockchain in Transport Alliance, referenced a recent report from Gartner on where blockchain stands in the company’s Hype Cycle of Emerging Technologies.

“Smart contracts and tokens are just computer code and are independent of the greed and corruption of the ‘centralized’ bad actors who exploited them,” explained Gartner VP Analyst Avivah Litan in a blog post. “In fact, bad guys experiment with new technology much faster and earlier than the good guys do. It’s a historical fact. It takes time for the ‘good use cases’ to catch up, and even more time for fraud and security controls to be implemented. »

Blockchain technologies have matured enough to support many business applications, she said, but there haven’t really been any “killer apps” for the technology. Instead, we see incremental improvements using blockchain technologies. Some innovations, such as blockchain wallets and smart contracts, are expected to reach maturity in less than five years, Litan said. Overall, Gartner expects the majority of blockchain innovations to reach maturity within two to 10 years.

As Craig said, many early blockchain adopters could not provide a value. “It’s a process of at least two to five years and it shouldn’t be done without a business case,” he said.

Both Craig and Gartner highlight the supply chain as an example of a business case where blockchain technology makes sense.

Major food companies such as Nestle, Tyson and Walmart are using or testing blockchain to improve traceability, deter fraud and improve response to contamination and foodborne illness, according to Scott Haskell with the Institute for Food Laws and Regulations at Michigan State University. And changes in the work at the US Food and Drug Administration can help drive the introduction of blockchain in the food chain with more comprehensive regulations on food traceability.

Even back in 2017, the 22nd Annual Third-Party Logistics Study warned that it would take a coordinated effort to adopt blockchain in transportation. The study found that while 30% of 3PLs and 16% of shippers saw blockchain as a potential application, they had yet to engage with the technology.

“Blockchain has the potential to make significant improvements in security, transparency and governance, but only in supply chains where there is value in controlling consumer risk, valuable goods or regulatory compliance,” Ken Toombs, global head of Infosys Consulting, said at the time. “Shippers and 3PLs must work together to drive value from blockchain, using lessons learned from failures with other emerging technologies, such as radio frequency identification (RFID).”

New life for Blockchain in the Transport Alliance?

While many BiTA members have left the organization, Craig said, the group has reinvented itself. No longer a TransRisk project, he said, it is now a 501(c) organization.

“We’re still working on standards” for blockchain, he said, and the group has already produced several for the industry.

A few months ago, the IEEE Industry Standards and Technology Organization, an international association of industry groups dedicated to advancing standardized technologies for the benefit of industry, announced the BITA Standards Council as its newest member program.

Incorporated as a 501(c)(6) in March, the BITA Standards Council “is tasked with publishing and certifying open source standards to facilitate global commerce, initially focusing on blockchain-enabled technologies in the transportation and logistics industry,” the IEEE announcement said .

“By standardizing the data formats of attributes on transportation blockchain platforms, we will improve industry interoperability and create efficiencies in supply chain and track and trace applications,” said Dale Chrystie, BSC President and Business Fellow, Blockchain Strategist, for FedEx, in a news release.

“[Blockchain] still has life, but life is driven by business use, not technical hype, Craig said. “There are several good practical use cases in the truck industry. It’s still alive and well – we just need to look at it as a technology.”