Sink or Swim – Block Chain Technology for Transportation Industry


Block chain continues to mature and just may be the most interesting new technology among the Business 4.0 enabling technologies that are gradually and steadily shaping the future for all of us. Though Block Chain’s origin is with digital currencies, its applications have immense potential across many other industries especially supply chain business operations.

Let’s try to understand what block chain is in a very simple way. Imagine a store which has a log book to record and the track every sale. Every time the store makes a new sale, an entry gets added to the log or “ledger”. Each of these transactions is added as a block and all blocks are tied together to form a chain. You can have many copies of a block chain so you can share copies with your customers and with your suppliers. You might even share copies of your block chain with your competitors so that you’re all sharing information on the same ecosystem commerce platform. In order to keep all of the copies of the block chain synchronized, you set rules for who can add new blocks to the chain and what information they can include. You can also set permissions for who can read the information in each block. Some block chain platforms allow you to create smart contracts. Smart contracts are just like legal contracts except that they execute automatically. For example, a smart contract could automatically transfer money from a customer’s bank into yours once they acknowledge receipt of a shipment.

Fundamentally, we manage three process flows in supply chain: money, material, and information. Block chain helps us streamline the information flow by keeping the information synchronized, encouraging and enabling collaboration, and improving the reliability and trust among parties. Managing the information flow in a block chain has a direct impact on efficiently synchronizing and managing money, information, and material flows.

Survival of the fittest is the nature of today’s business and it’s true in the logistics and transportation industries as well. Companies must be able to flexibly scale up and down and adapt to consumer’s changing needs to thrive… else, they are destined to perish in the long run.

The trucking industry has been facing a growing number of serious issues over the years; and, block chain has emerged as a solution to many of the industry’s challenges. It’s almost as if transportation and block chain is a match made in heaven.

Currently, while the trucking industry faces many new challenges, let’s focus on the top three (in our humble opinion) :

  1. How to reduce the cost?
  2. How to increase the efficiency?
  3. How to have better SLAs to serve the customer?


We believe that block chain has great potential to solve all of them. Let’s explore how.

Let’s take the first question about reducing the cost. Currently, in a capital competitive climate, transportation payment and cash flow are a major problem in the trucking industry. Billions of dollars are tied up and companies must wait for days, even weeks, before receiving the payment. The problem challenges companies in two ways. First, it consumes the bandwidth of their associates which adds cost; and, secondly, that money could have been used to support capital project to expand their business.

Administrative costs are rising day by day. Typically, a simple international container shipment will have to deal with more than a dozen different companies resulting in more than a hundred separate communications. And, any delay in getting the approval, or if any form is lost, crossing these process gates has the potential to hold the container at the port indefinitely.

Having all of the transactions on the block chain can significantly reduce the lead times in processing the payments. And, it’s going to be secure as well resulting from inherent security and integrity of block chain technology as a shared ledger across the supply and information network.

Addressing the challenge of increasing the efficiency, block chain is going offer significant improvement. The “Block Chain in Trucking Alliance”, also known as BiTA is the largest organization in the trucking industry. BiTA members account for over 85% of trucking related transactions globally. BiTA was formed due to mounting inefficiencies in the logistics and transportation ecosystem and provide a much-needed promise to the industry in the form of block chain standards for transportation business. BiTA published its first set of standards in 2018 and continues to develop additional standards on block chain to add more transparency in all the transportation related processes that will lead to improving efficiency across overall business processes.

Another major area that block chain can help the transportation industry is the tracking of the shipments and providing end to end visibility which will lead to improved customer satisfaction leading to business growth. Truckers will be able to provide better SLAs to the customer and achieve and improve them. With the rise in the inventory cost, today’s customer expectations have risen substantially as the trucking industry is at the center of “Last Mile” challenges to provide same day delivery or even deliver within couple of hours of placing the order. Existing technology is not able to scale up as rapidly as Block Chain’s promise to offer a solution to address these challenges.

Existing technologies, such as, APIs and EDI are subject to manipulation because they are not well authenticated. Due to this unreliability, existing technologies, supplemented by integration challenges, can have a negative impact on the transportation data flow that can potentially impact the entire supply network ecosystem.

In our humble opinion. Block Chain will change the face of trucking, logistics and freight related industries in a game changing way and that future is not far away. We have to stop treading water and implement much-needed innovation that the industry needs. We highly recommend that companies start innovating and seizing the opportunity on the table. Block chain is going to change the way business runs; and, those who adapt to change will swim… and, the rest will sink.