A recent technological trend in the cargo transportation industry has been blockchain’s influence on trucking. Blockchain is a digital database or ledger where a computer network stores and shares data by decentralization. Compared to a centralized database like a computer LAN, blockchain holds many copies of the data of numerous computers. While people initially used blockchain for Bitcoin cryptocurrency, other industries have begun seeing its benefits. For example, companies increasingly use it to provide a peer-to-peer payment alternative to the commercial banking system. The trucking industry has also seen the current and future benefits that blockchain will have on domestic transportation.
What Will Be Blockchain’s Influence on Trucking?
The most significant impact blockchain will have on trucking is the streamlining of diverse supply chains. This will be achieved in many ways, allowing greater transparency for the parties involved in the shipping process. Decentralization means that all supply chain operations become records visible to everyone, including the customers. If anything goes wrong when transporting the freight, blockchain can retrace each step and find a solution. Another benefit is a more secure supply chain when moving cargo. Blockchain is a ledger that uses cryptography to protect data as hashes with a unique number. Fabricate info can be easily identified, and hackers have more difficulty stealing, modifying, and corrupting data.
One of the most critical considerations when driving a supply chain is the costs one could incur. A benefit of blockchain is that the overall cost can be reduced for various industries, including transportation. Blockchain is frequently paired with IoT (Internet of Things) to share data. An example of future cost-saving is IoT technology, like sensors inside a truck that detects the space a shipment takes up. Blockchain could use the info as a smart contract with self-executing payments based on the freight in the trailer. This will accurately estimate a price based on cargo volume and eliminate unnecessary fees for the shipper. Blockchain can also use data to enable quicker and more cost-efficient delivery.
Disadvantages of Blockchain in Trucking
While blockchain has many benefits in trucking, there are also drawbacks. A primary disadvantage is that blockchain is a relatively new concept that many do not understand. With blockchain requiring complex protocols to function correctly, the average person may find it challenging to begin using it. Despite being secure, hackers that know how to crack hashing can still steal data or money. Compared to a traditional database, blockchain can also be slower. The amount of operations carried out in a blockchain is much more than in a database, which means slower speeds. In a shipping supply chain that moves freight, this is bad for all the parties.
Another drawback is that blockchain does not allow data recorded to be easily modified. Data that the system records may be time-consuming and expensive to fix if a person makes a mistake. While blockchain can have benefits and downsides, it could be a while before the transportation industry sees the impact. Despite blockchain being years away, moving goods by truck is still vital for many shippers. Contact A1 Freight Solutions at 786-376-9420 or info@a1fsinc.com for a quote to move your cargo domestically today.