Blockchain entrepreneurs have an opportunity. The logistics industry is ripe for disruption and blockchain technology is ready to take the lead.
Delays and poor visibility are common complaints among logistics and supply chain professionals. Often, these delays occur during local moves. Most carriers and 3PLs offer some form of tracking. However, visibility is still opaque in some key areas and causes for delays are not always clear.
The waiting game
Everyone hates to wait. For truck drivers, waiting is part of the daily routine. With advancements in tracking and digitization, the trucking industry is becoming faster and leaner. But drivers still wait. The current waiting problem stems from lack of visibility and operational planning.
When do drivers wait? They wait as shippers load and unload trailers. They wait in lines at the ports for containers to become available. They wait for empty trailers and spend time seeking empty equipment.
The trucking industry is capital intensive. It’s also competitive and operates on tight margins. The more time a trucker waits or drives with an empty trailer, the more cost, waste and pollution accrues.
The issue for drivers is that wasted time cuts into their hours of service. The Federal Motor Carrier Safety Administration (FMCSA) regulates how many hours a driver can be on duty. Overall, waiting reduces the time truckers can safely and legally haul active loads.
Shippers are also negatively affected by the waiting issue. Small businesses and large distribution centers alike need to plan diligently around appointment times. When the truckers arrive they must hastily load or unload trailers in order to avoid dwell time charges.
If a trailer is floor loaded (not palletized), this process can be incredibly labor intensive. Finding enough people and proper equipment to execute a time sensitive floor load can result in a scramble.
Shippers also risk tarnishing their reputation with carriers if they perpetually run over their appointment window or turn drivers away. Overall, the common practice of live loading and unloading contributes to waste in the overall supply chain and decreased profitability for carriers.
One of the ways to ameliorate this predicament is to use trailer pools.
Equipment owners keep empty trailers available in a common area for drivers of partner companies to recover and drop them off. This allows them to use equipment on demand.
Trailer pools allow for truckers to make more drop and hook moves as opposed to live loading and unloading. Instead of waiting around at a customer’s facility, the driver can drop an empty trailer and immediately pick up a full one either on site or nearby.
Shippers can also optimize their resources as they see fit. Instead of stopping activity to load or unload trucks, they can do so at will without threatening their operational efficiency.
Blockchain and pooling
In order for trailer pools to operate at maximum efficiency, operators must implement the right tracking technology. In the future, blockchain-enabled tracking will help update tracking milestones in real time and alert carriers to changes in equipment availability.
Some of the major benefits of blockchain tracking include visibility, automatic milestone updates and ease and security of exchanging documentation.
One of the most crucial measures of success in business is the return on investment. Since trucking is capital intensive, interested parties need to clearly understand the ROI on their equipment.
The equipment generates revenue when it hauls active loads. When calculating returns, one must know exactly when the truck was hauling freight. In order to optimize the ROI, equipment owners and drivers need to know how much time they waited and searched for available trailers.
Blockchain-enabled tracking will paint a precise picture of a load’s lifecycle. Both the equipment owners and operators can accurately calculate ROI through blockchain tracking. They can also gain insight on wait time per customer in order to plan more productive routes.
Billing can present challenges in equipment pooling scenarios. Blockchain-enabled tracking will provide clarity on when trailers are dropped, picked up and returned. This will help with settling disputes and justly billing operators and customers.
One of the most crucial benefits blockchain can deliver is demand-driven data. Equipment owners running trailer pools can leverage blockchain tracking data to negotiate contracts and commitments with carriers. Pool operators can leverage this data to redistribute equipment to specific locations based on actual usage demand.
Purchasers will also be able to better forecast the need for additional equipment. Blockchain data will help optimize pool sizes and drive out unnecessary costs from the system. This in turn can benefit all parties involved including drivers, shippers and equipment owners.