Every day we see new software and tools for Blockchain and supply chains helping the logistics community with databases and cryptocurrency systems.
In the logistics industry, technology is an aspect that we can’t ignore. Every day we see new software and tools that are changing and improving how we manage supply chain companies. Blockchain is one of the trends that we are hearing about in the logistics community and, according to the website Investopedia, a Blockchain is “a distributed database or ledger that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in a digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions. The innovation with a blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party.”
We spoke with experts in our company, and this is what they had to say:
Scott Hadley, Vice President of Partnerships at Hubtek, said that he is a believer in what blockchain can do and is excited about the use cases today. “But I also remain a believer that blockchain will likely not be in over-the-road transportation. I am no expert, and it’s just my theory, but I think the lack of standardization, the continuance of fragmentation, and reliance on SMBs will make widespread adoption a near-impossible task. To be a true blockchain, would lumper services also need to participate as part of the transaction? Now, can pieces be included like tracking through the old data? Sure, but that doesn’t solve many problems or move the needle.”
“However, think of all the problems it could solve. Designing a blockchain for risk management at the driver and equipment level could reduce claims and double brokering dramatically, which in theory should reduce insurance premiums. In turn, carriers could better sustain profitability. Unfortunately, this is much easier said than done. Back in 2018, I was in a think tank group for risk management, as a member of BiTA. The think tank disbanded with no progress because we couldn’t even agree on where to start.”
Drew Cherba, Hubtek’s Vice President of Client Development thinks that blockchain is yet another technological advancement that, if widely adopted in the logistics industry, could bring us out of the dark by improving traceability and lessening the unknowns about products and shipments in transit. “This, of course, would allow our associates to spend more time cultivating deeper relationships and collaboration instead of chasing issues and fighting fires.”
He explained that blockchain, in its essence, is basically a ledger that stores vast amounts of information that every stakeholder in the supply chain can access in real-time, and because entries in the ledger require verification, this verification process creates high degrees of accuracy and low risk of fraudulent activity. It also promotes transparency across the supply chain network.
“Blockchain has the potential to impact all stakeholders in your supply chain with its capabilities to enhance traceability, improve supply chain management, and create more efficient truckloads and better utilization of our equipment by reducing the amount of dead miles. Blockchain is also making our billing and payments safer by simplifying payments across borders and between parties securely.”
He concluded by saying that with blockchain, we can reduce errors, improve delivery times and enable better fraud detection, thus lowering costs and increasing efficiency throughout our supply chains.
Finally, Juan David Sanchez, Development Manager at Hubtek, believes that the first question to ask is whether blockchain is a good technology to improve the supply chain industry. “I think that’s the first question, even before we ask how we can use it. To answer that, we can simply say, ‘yes’. Not to be short on words of course, but because, as with any other emerging technology, it provides improvement at different levels to upgrade how processes in the industry are currently done.”
He stated that blockchain can allow safer transactions regarding things like bidding or customer shipments, where information such as quote value or origin and destination of a load is processed. “Also, when we, for example, use bots to connect to customer platforms, the credentials are protected from attacks or hacks, due to its blocks and immutable architecture. That’s how we can imagine a whole new level of security for information we already deal with.”
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