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Fuller on the blockchain calendar: realities by 2021, normal by 2026

Blockchain pilots will be the feature of the technology’s development in the transportation sector in 2019, with 2021 looking like the year for actual commercial usage.

That was one of the messages in a joint Freightwaves-Spireon webinar Thursday, “Blockchain & Fleet Management: Revolution or Riot?” with Craig Fuller, the CEO of Freightwaves and the managing director of the Blockchain in Transport Alliance making the presentation. Fuller said the next few years will “remind you of the internet between 1995 and 2002, but it won’t take seven or eight years,” he said. “It will take about two.”

The webinar is the latest in an ongoing series of transport industry-focused presentations.

“As we move to 2021, we believe there will be some successful outcomes related to that pilot activity,” Fuller said. The early adopters of various technologies “will start to really get some traction and solve problems that people have.”

Looking to 2026, blockchain technology “will have a level of maturity that will make it like a cell phone,” Fuller added. “It isn’t just cool, it is something that is accepted.”

What you’ll see before that in the years to 2021, according to Fuller, will be pilots that have blockchain as the backbone of their technology. The areas that the pilots are involved in now span a wide range, Fuller said, with payments being particularly notable. “The idea that you can settle at the end of the transaction, upon delivery, is exciting,” he said.

Driving that sort of rapid payment will be smart contracts. Fuller provided a basic example, where he and a colleague placed a bet on the outcome of a sporting event. Now, when the game is completed–triggering the “contract” between the two–it is up to the loser to pay the winner, with the speed of that action less than certain.  It is a completely manual process with questionable levels of trust.

But in a smart contract built on a distributed ledger, the contract would take in a triggering event–like a score–and complete the payment automatically. The rapid payment to the driver noted by Fuller in the earlier example would be triggered by a variety of inputs, including the most basic test: did the freight make it to the end customer? When all of the triggers are tripped, the payment can be made.

The use cases that Fuller sees numerous companies pursuing are more extensive than payments. Financing purchases of vehicles on a per mile basis becomes a possibility, because a blockchain-based record of mileage history of a vehicle in the secondary market would be immutable, a far cry from the data now supplied by an odometer with all of the questions of trust surrounding that. Maintenance records on ledgers perform approximately the same function. “I would know every time that the truck was serviced, and I can trust the information on such things as parts and warranties,” Fuller said. 

Many of those potential applications will be on display next month at the Demo Day activities of Transparency ’18, a BiTA sponsored event in Atlanta. Fuller said about 40 developers will be demonstrating their transportation-based solutions to the audience, with about half of them using blockchain technology in their application.

Blockchain and Pilot Flying J

Fuller described how blockchain technology might have affected a recent news story in the trucking world: the conviction of Pilot Flying J President Mark Hazelwood on charges that his company failed to deliver on promised fuel discounts.

If those price agreements had been stored on a distributed ledger, with shared immutable records being held by buyer and seller (presumably the details of the transaction would not necessarily have been known to all parties on the ledger), the evidence of the initial transaction as well as the adherence to it would not have been in question, Fuller said. The existence of that data might have discouraged Hazelwood from even trying to implement his plans.

“There are people who believe in the future that a truck company can buy its fuel, negotiate its own discount and there is no way the seller can alter that transaction,” he said.

In a less-sinister example, Fuller talked about an RFP between shipper and carrier that has no hard and fast guarantees and that runs the risk of either a shipper not actually moving the quantities specified in the RFP, or the carrier failing to supply the full number of trucks initially agreed upon. 

The parameters of the RFP that is now far from firm can, in the future, be on a ledger, with no question about its specifications and agreements.

In a discussion about who are the winners and losers as the world moves toward 2021—and 2026–Fuller described a list of far more winners than losers. Even many of the losers, he said, can avoid that fate if they realize their shortcomings that could be revealed by the extensive use of the technology.

For example, Fuller challenged the idea that brokers would all be disintermediated by blockchain, singling out C.H. Robinson and Coyote as the type of companies “that have an opportunity to provide a ton of value…they are well-suited for that.”

But “somebody not playing by these rules will be outed,” he said. “It will be more difficult for brokers who aren’t paying attention.”

Fuller did caution that blockchain does not provide the answer to all challenges. For example, the slow speed of the bitcoin blockchain operates at a fraction of the speed that something like the Visa or MasterCard system operates. “A lot of times, companies or executives have the idea that blockchain can solve all problems, and in reality some relationship data bases are actually superior,” Fuller said. “They can solve it already.”

Among the winners cited by Fuller, and probably the most important: consumers are winners.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.