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Blockchain, the Network Effect, and the power of instant settlement

The problem with the transportation industry is the segmentation. Blockchain provides major advances for efficiencies across the sector. (Photo/Shutterstock)

Peter Emahiser, Owner and Operator of Tadmore Transportation in Toledo, Ohio, joined Chris Polk, podcaster for An American Trucker, for a live Facebook discussion and podcast of blockchain and how it impacts business in the trucking industry and the world. Tadmore is #980 on this year’s INC 5000.  He is a member of BiTA, The Blockchain in Transport Alliance, and a Charter Member of TransRisk. Tadmore is in the TOP 5% of brokers rated by Credit Worthiness and the highest rated broker in at least 100 miles, per DAT Reviews. Emahiser is also a Moderator for the Rate Per Mile Masters Facebook Group, the largest Professional Trucking Group on Facebook.

We live in a time in which things change at such a rapid pace, it’s probably better not to say something regarding technology “can’t happen,” says Polk. “It’s fairly mind-blowing what’s happening in the industry right now.”

“Why do we need blockchain and what is it?” Polk asks.

“We need blockchain, for one, to stop the misinformation,” Emahiser says, “which impacts the trucker as much as anyone else. It can be very costly. It’s managed through the Ethereum Network. The bottom line with the blockchain network is that it creates transparency. The ledger notations are made public to all sources on the network instantaneously, publicly, encrypted, and decentralized. The only way to hack it is to have control of more than 50% of the network at one time.”

It’s fairly mind-blowing what’s happening in the industry right now.

“The problem with the industry is the segmentation,” says Emahiser. “Sometimes for a single pallet you might have as many as ten businesses involved. Some of the routes were created in the 1930s. They were probably created by super smart and organized people, but the point is, the routes — and the industry in general — is outdated.”

Emahiser can barely contain his enthusiasm about blockchain, calling it a “dream-state, where you can make some of this stuff reality.”

“Say an owner-operator wakes up one morning and wants to type in all the things he wants and is willing to do, and what he’s good at. What if he wants to run a certain lanes and up to 300 or 400,” he says.

While blockchain can’t currently do all that, it also seems to be leading to other disruptive innovations throughout the industry, which are making day-to-day options better for everyone.

“Shared capacity, shared resources. It’s a cool place to be,” he adds.

Also, repeated several times throughout the discussion, Emahiser noted that blockchain is improving the process so that drivers aren’t going to be squeezed as much. So much has been absorbed at the driver level. Drivers have been squeezed from every angle with the mounting inefficiencies, and the adoption of a new technology that helps is welcome news — unlike ELD mandates, which feel more like Big Brother.

So much has been absorbed at the driver level.

Can blockchain get rid of all paperwork? To some extent, yes, says Emahiser. Without a centralized authority, it’s in the chain. At the same time, certain bill of lading laws require some paperwork at least for now. It also depends on the parameters and need to be defined: how far and how frequently should updates be necessary and required? But the blockchain is instant settlement. A better process would be paperless, as long as regulations would allow it.

BiTA is great because it helps bring together an alliance so that the industry doesn’t segment into so many players using blockchain. BiTA helps form standards to approach the technology in specific, understood ways. It creates what Emahiser calls the Network Effect, the way a product gains value by the more people who use it.

Craig Fuller, BiTA co-founder, writes in to the live podcast, “Unlike Uberization in blockchain the industry is coming together rather than letting outsiders own the technology. With blockchain it will also level the playing field between the smallest and the biggest. Code don’t care.”

“That’ll preach right there,” says Polk.

To watch the live cast or listen to it as a podcast, or to find out more about An American Trucker, click here.

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