Nearly 60% of people surveyed find blockchain technology interesting, but remain unclear on its usefulness within the transportation and logistics sector, according to a Gartner Research survey conducted earlier this year.
That was just one of the interesting nuggets of information Bart DeMuynck, research director at Gartner Research, imparted on the audience during the recent Blockchain in Transport Alliance (BiTA) meeting, held Nov. 16 at the Georgia International Convention Center in Atlanta.
BiTA was founded to combat this information gap and provide a collaborative forum for industry stakeholders to join together to develop best practices and standards and promote educational efforts to assist the industry as it transitions to the use of blockchain technology. The BiTA meeting, the first for the organization, was attended by nearly 150 members.
DeMuynck delivered the keynote address to members. He noted that in the Gartner survey, while 59.34% found the technology “interesting, but unclear of its usefulness,” 28.57% believe blockchain will be disruptive and important to the future of the industry.
“Today, we see processes for blockchain where there is a lot of manual processes,” DeMuynck explained, adding that the amount of data available today can improve the overall supply chain if it was shared. “Today, we have a lot of data but that doesn’t mean we are sharing that data beyond our own organizations.”
Blockchain is a distributed ledger technology that provides transactions of value, he said. Within a blockchain, data is encrypted in blocks and distributed across a wide network of computers, providing transparency for transactions for each party involved in the transaction. In essence, blockchain provides a level of trust that does not usually exist among parties.
DeMuynck said Gartner’s research indicates that blockchain will provide a business value-add of $176 billion by 2025 and $3.1 trillion by 2030 across industries. In transportation, which is forecast to produce $1.2T in truck revenue by 2028, blockchain can address challenges in the following areas: economic drivers, customer service, driver shortage, new business models, regulations, shipping models, controlling costs, and productivity.
“I’ve never seen the level of interest” we are seeing in blockchain, he said. Key benefits of the blockchain, DeMuynck explained, include enhanced transparency of a product’s journey through the supply chain; greater scalability to allow an unlimited number of participants to be involved in a transaction and allow a verified level of trust; improve supply chain security, including verification of pickups and deliveries; and increase innovation as new uses for the technology are developed.
Areas where blockchain can be utilized are in the rate/bidding process, to reduce errors through the elimination of manual documentation; visibility, traceability and monitoring; proof of delivery; payment efficiencies and even ELD compliance.
“There is a lot of visibility out there in the market, but the problem is everyone has it in their own cloud,” DeMuynck said. Blockchain can bring that information together, he noted.
With that said, DeMuynck warned that blockchain remains in the early stages of development in most sectors and faces a number of challenges, although there are already companies looking at it as a way to ensure fleets are ELD compliant.
Walmart is currently testing blockchain to track food and IBM and Maersk have teamed up to run a pilot program for customs documentation. DeMuynck noted that Toyota is considering a blockchain test where it would use the technology to track vehicle components throughout the supply chain.
While the hype around blockchain continues to build, DeMuynck pointed out that there is very little actually blockchain technology available today.
“You will see a lot of news about blockchain,” he said, “but there are not a lot of blockchain products you can buy” right now.
Concluding his address, the Gartner researcher noted some of the barriers that must be overcome, including the establishment of a decentralized network governance that gets initial guidance from an industry stakeholder/company willing to lead the pilot; establishing business ecosystems; enabling data interoperability; establishing business rules; showing it provides value above current systems; a steep learning curve and establishing security and risk management capabilities.
“The first effort is to bring everyone together and I applaud BiTA [for doing that],” he said. “The next step is to [develop governance].”
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