TMW Systems sees enormous potential with blockchain technology, but notes that successful implementation requires a “strong partnership with a technology provider that understands its intricacies and potential applications.”
That is part of the conclusion the software firm arrives at in a new whitepaper it has released on blockchain.
“Blockchain, machine learning and other emerging technologies can play vital roles in helping transportation service providers more efficiently and profitably meet the demands of tomorrow’s highly complex supply chains,” Tim Leonard, chief technology officer, told FreightWaves. “We are excited to help lead the development of standards and innovative applications that can transform the movement freight from supplier to end consumer.”
In the newly released whitepaper, “Blockchain for Transportation,” TMW explains some of the use cases for blockchain.
“The shared behavior of the blockchain allows organizations to not only track products within their control but also across vendors participating in the transaction, thus providing a 360-degree view to business stakeholders,” Leonard, who authored the whitepaper, notes. “The permissioned aspect of the technology would limit the required view to authorized participants. Each of these benefits, together with smart contract capability, make blockchain attractive to leading businesses. While blockchain has clearly been embraced by the supply chain community, there are as of yet no open standards to help ensure successful implementation.”
The entire whitepaper can be downloaded from this link: http://info.tmwsystems.com/blockchain-for-transportation-white-paper.
TMW recently joined the Blockchain in Trucking Alliance (BiTA), which is focused on developing such standards and creating a forum for participants to share best practices and research.
A blockchain is basically a decentralized, distributed database that allows transactions to move seamlessly among participants, regardless of prior relationships, trust, and differentiated systems.
TWM provides an illustrated example of how a blockchain works in the whitepaper, explaining that two parties wishing to conduct a transaction use cryptographic keys assigned to each, the transaction is then broadcast and verified by a distributed network. Once validated, a “block” is created, added to the chain to create a permanent source of the transaction, which is then completed.
In a blockchain, any number of parties can be involved, but no party can alter a previous block in the chain, creating a transparent and trusted record of transactions.
Leonard notes some often misunderstood statements about blockchain – for instance blockchain is not the same as Bitcoin or other cryptocurrencies; rather it is the technology upon which cryptocurrencies operate.
He then notes the various types of blockchain – public, private and consortium – and their differences, as well as some of the key components that make blockchain work before explaining some of the benefits blockchain can provide to the supply chain.
Areas that Leonard sees being impacted by blockchain include freight tracking, carrier onboarding, load boards, factoring, Internet of Things, and protecting data.
Leonard also highlights one possible application that many are not considering – as a master data management system.
“If the technology can store all pieces of information in a single place, it could also very well serve as a Master Data Management (MDM) system,” he writes.
With access to key information from shippers, carriers, brokers, users, drivers and the vehicles themselves among other data inputs, a blockchain-based MDM “becomes the perfect solution for building a data lake…because it inherently supports data validation by network members, blockchain could provide the function of ‘data stewards’ in an MDM solution,” he writes.
TMW System’s inclusion in BiTA is one of the steps the company is taking to proactively prepare for the inclusion of blockchain in the global freight network.