Still waiting for blockchain to catch up with the hype
Blockchain burst onto the transportation scene in the last decade as a futuristic solution to a current supply chain problem: visibility. But after seeing blockchain-enabled cryptocurrency markets plummet this year, transportation leaders may wonder if blockchain is the logistics solution some envisioned. The bad press and declining valuations of the crypto markets could get in the way of what blockchain needs most to become a vital part of the supply chain: massive cross-industry sourcing.
“Blockchain is the underlying infrastructure that crypto runs on — that’s all it is,” Joe Russo, VP of IT and Security at Isaac Instruments, told FleetOwner. “People need to understand that it’s not the same. Blockchain is like your transport mechanism. Cryptocurrency runs on top of the blockchain because it’s secure, it’s transparent. Those are two different things.”
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Blockchain technology enables a distributed ledger that uses cryptography to create transaction records that are shared by all network users. Russo said it works to solve trust issues by providing a verifiable, decentralized transaction record. All network members can post transactions directly to other peers without relying on an intermediary.
Each node can submit transactions by broadcasting them to the blockchain network, where all other nodes can see the transactions. Every user on a network can make and record transactions. Each node maintains a complete local copy of the blockchain ledger, which is compared to the log sent by other nodes, enforcing the openness of the network.
Russo explained that transparency can make supply chains more secure and visible from producer to end user. Anyone with access could track freight from an entire truckload to an individual pallet. But this is still more conceptual than actual.
“Everything you read about supply chain and blockchain in the transportation industry is that this will transform the supply chain because of greater transparency and efficiency,” Russo said. “But it’s just buzzwords. So how do you use it? That’s where I feel like the industry is struggling because they haven’t figured out the use case.”
Blockchain: ‘Overhyped, oversold’ today
“Right now, in our world today, blockchain – and cryptocurrencies – are overhyped. It’s oversold, Garry Golden, a transportation futurist, said during a keynote speech at the Solera Outlook 2022 conference in May.
“It’s in the not-ready-for-primetime stage,” Golden added. “But that doesn’t mean we can’t use foresight and image implications and prepare for a future when it arrives.”
Golden noted that back in 1999, when the Internet was in its early days of connecting people, people could understand what the Internet was—a computer network—but couldn’t imagine what it would become.
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“I couldn’t imagine then that there would be a search company called Google that would dominate the world,” he said. “Or a social networking company called Facebook. Or that I would click a button and get into a car with a stranger. Or I could put my home on a website called Airbnb. You couldn’t imagine the future based on the definition of “network computers.”
Blockchain is a decentralized ledger. “What is it that we cannot imagine will happen around such a simple definition?” Golden said.
A visible future
Manufacturers and shippers want visibility across the business. This includes supplier activity, procurement, purchasing and store operations. Most supply chains span continents – if not the globe – making transparency challenging.
Russo said blockchain’s transparency, security and integrity can make supply chains more efficient. Where there are strict compliance measures and regulations – for example temperature-controlled transport, blockchain offers real-time information and verifiable transaction history. All stakeholders in the supply chain will have the same visibility into when materials are shipped, who transported the materials and their expected arrival details.
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It can provide value by storing sensor data on a distributed ledger when layered with other emerging technologies, such as the Internet of Things. Blockchain can facilitate automated ordering and autonomous preventive maintenance procedures integrated with an enterprise resource planning system.
Russo said it would take larger carriers, manufacturers and shippers to embrace and succeed with blockchain to take hold in the transportation industry.
Blockchain in transportation “could be around the corner,” Russo added. “But it doesn’t help that people still think blockchain and cryptocurrency are the same thing. With everything happening now with the valuation of cryptocurrencies going down the drain, people are asking why they should look at blockchain.”
Understand the flow of information
Golden said he sees a future where fleet management relies on blockchain. “We can look to supply chains and we see information flows, we see inventory flows, we see financial flows — all of these things are going to continue in the chain for years to come.”
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Once information is posted on the blockchain, users can always refer back to its origin, Golden explained. “If you have blockchain-based fleet management, data is always in a state of audibility and compliance. You can’t change that.”
Added Isaacs Russo: “The key point is that anyone looking at blockchain needs to understand what their use case for blockchain is. That’s the only way you can move forward and have a plan on how to implement it.
“I see blockchain as something that can really help these smaller, family-run trucking companies that maybe lack the expertise or the staff to really secure themselves. If we can give them something that’s scalable, whether it’s two trucks or 100 trucks, I think that will help. But it’s really about coming together and making this happen across the industry. You can’t do it in a silo.”
