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New industry group looks to create blockchain standards for the freight industry
The buzz about blockchain's ability to transform the supply chain continues to grow with the formation of Blockchain in Trucking Alliance (BiTA), an industry group created to design blockchain standards and education for the freight transportation industry.
Blockchain is a digital ledger technology that provides an immutable record of transactions that can be shared and audited by buyers, sellers, and related partners. While the technology started out in the finance field undergirding cryptocurrency systems like Bitcoin, it has been attracting a lot of attention recently for its potential as a tool for improving supply chain visibility and efficiency. Recognizing this potential, several freight technology and transportation leaders formed BiTA to bring together companies that might benefit from using blockchain in their businesses. Members include technology vendors, original equipment manufacturers, tier 1 suppliers, consultants, banks, carriers, shippers, third-party logistics companies, and freight brokers.
Transportation giant UPS has added its weight to the effort by announcing earlier this week that it has joined the organization, which also includes TransRisk, McLeod Software Corp., PS Logistics, 10-4 Systems Inc., TMW Systems Inc., and Convoy, according to the BiTA website. Coyote Logistics, a nonasset-based truckload brokerage company that UPS acquired in 2015, has also joined.
UPS said it is exploring blockchain applications in its customs brokerage business as a means of facilitating the execution and visibility of transactions between UPS, its customers, and government customs agencies. UPS said it believes the technology could help improve transaction accuracy and efficiency by replacing existing manual processes.
BiTA members see other possible applications as well. A blockchain network could allow trucking companies to share universal trailer pools, renting time on physical assets in a way that is similar to how travelers rent rooms using the Airbnb online real estate marketplace, said BiTA co-founder Craig Fuller in an interview with DC Velocity, a sister publication of Supply Chain Quarterly. Blockchain technology could also allow shippers and brokers to create self-executing "smart contracts" that automatically provide fuel reimbursements when truckers fill up their tanks, or pay drivers as soon as they deliver their freight, said Fuller, who is also CEO of TransRisk.
Other blockchain applications could include tracking every person who has had possession of a truck; ensuring that drivers' histories are accurate; automating equipment maintenance records; recording how many times a tire has been retreaded; or identifying every person who tampers with sensitive cargo such as food, Fuller said.
"This is the most revolutionary technology to hit the industry since the Internet," Fuller said. "It could change the construct of the U.S. economy by disintermediating those businesses that live in the middle and don't create any functional value. Blockchain routes around them, and you don't need to know who's on the other side of the transaction because the contract itself will self-execute."
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