The idea of blockchain started out packaged as a use case that attempted to replace government-regulated fiat currency with cryptocurrency. However, it has expanded dramatically since then, with use cases being identified across a myriad of segments including finance, energy, supply chain and defense. In all likelihood, cryptocurrency could be called a precursor to the potential of blockchain, a use case that made people sit up and take notice about an underlying technology so promising that it could revolutionize the way we look at privacy and digital transparency.
Blockchain, by definition, is an immutable distributed ledger. Put in layman terms, blockchain can store and relay information in a secure manner, with its content being distributed and controlled by all the stakeholders in a network. No single stakeholder can claim absolute authority over the network, nor can any single party edit information stored in the system without the explicit consent of every other stakeholder in the system. This ensures visibility and transparency – two vital parameters that have remained elusive across many segments for decades.
Though blockchain brings in a reasonable amount of sophistication to different verticals, it makes sense only in scenarios where it can be integrated seamlessly with minimal disruption to everyday operations. A Gartner report analyzed the hiccups that different industries would face while implementing blockchain, and pointed out that 75 percent of public blockchain programs would suffer from “privacy poisoning” – an issue complicated by privacy laws and government regulations.
However, even in the midst of such issues, there are only good things to say about blockchain adoption in the transportation and logistics sector. In many ways, blockchain would be a perfect solution to many issues that plague the industry – opacity across network nodes, an extremely fragmented marketplace, multiple stakeholders and mediocre visibility.
Take the case of trucking, for instance. Trucking is a massive industry in the U.S., accounting for over $720 billion in annual revenue, representing 81.5 percent of the country’s total freight bill. The sector suffers from severe fragmentation, with 90 percent of the trucking fleets owning six or fewer trucks. These extremes create a situation where shippers lack transparency into available trucking capacity, while truckers log thousands of deadhead miles, missing out on hauling opportunities due to network opacity. Blockchain, if appropriately implemented, would help to bridge this disconnect.