Top Changes That Blockchain Will Bring The Trucking Industry
Blockchain technology is often associated with Bitcoin only, however, it is much more than Bitcoin or cryptocurrencies in general.
Nowadays, there are tons of problems in administrative spheres, trade, finance world etc. that can be solved through the simple application of blockchain technology. Blockchain technology can help these industries to increase their effectiveness, efficiency and at the same time stay away from extra hassles, complications, and corruption.
For instance, nowadays, in the transportation sector companies have to wait more than a month in order to receive a payment (for an average invoice). The administration costs that are paid to various third parties keep increasing and eventually become a larger share of the overall costs that are incurred by the companies. There are various challenges that come up while coordinating the supply and the demand, which results in trucks driving billions of kilometers without any load or with a very light one. The most interesting thing about blockchain technology is the fact that it is capable to solve all the listed problems that exist in the transportation industry along with a number of other sectors which have nothing to do with transportation.
As of now, one may wonder what a magical thing is the blockchain technology that it is capable of solving so many problems that exist in industries that are so different from one another.
At first glance, it may seem a bit absurd that a single technology is capable of solving various issues in such diverse industries. However, blockchain technology plays one major role for different sectors, which is making operations within multiple services more efficient and with as few costs as possible (by mainly cutting out the costs in logistics).
Nowadays, blockchain technology is enabling platforms to make the coordination of various documents shared on distributed ledger smoother and easier. In the meantime, smart contracts make the customs clearance and approvals much faster as they require way less time for processing goods at checkpoints. The blockchain is capable of ensuring users with data that is trusted in the ecosystem of the given industry. To make this possible, the whole network appears to be a contributor to the data validation process. All of these improvements are done by cutting the needs of the physical paperwork.
If we take a look at the example of the transportation sector, a single shipment may need to be passed through more than thirty companies and may require communication with hundreds of different parties. In fact, a single error in this long communication chain may result in issues such as a loss or a hold. To avoid such errors, blockchain records all the steps in a permanent and in a very safe manner.
In the transportation and especially in the shipping industry, the practice shows that the demand for quick deliveries is increasing all the time. As a result, the traditional delivery systems are not as efficient anymore and neither capable to meet this rising demand. In this sector, blockchain technology can give instant and prompt solutions that can improve the tracking and the authentication processes that the orders go through.
Taking all these issues and their potential solutions with blockchain technology, we come to the conclusion that this technology is a necessity for the currently existing supply chains.
The only problem with the blockchain technology right now is the lack of awareness. A lot of people do not know about blockchain at all, many others have heard of it but do not understand how it works and what it is about. At the end of the day, blockchain can be a bit confusing and hard to understand. For that reason, this article will cast light on questions starting from “What is blockchain?” all the way to “How can blockchain technology revolutionize sectors such as transportation?”
What is blockchain?
The fundament of the blockchain technology is cryptography, which is a branch of mathematics. It works as a shared digital ledger (series of blocks that are encrypted and linked to one another in a public chain) and is completely decentralized. Blockchain works by fully relying on the consensus of the peer network from around the globe. This way, it is impossible to modify one block without the modification of the whole chain and without getting the consensus of the peer network as a whole. Thanks to these features, the chances of the potential not legit and fake data are very low and almost none at all.
For example, Bitcoin is a cryptocurrency (digital currency) that is authenticated and exchanged through the blockchain technology. The main benefits of this cryptocurrency are the result of the application of blockchain. Those benefits include things like a high transaction speed, very low costs (in some cases none), high security, and elimination of third parties at the time of a transaction.