Future Tech – Blockchain for Fleet Management
“If you are looking for immutable, secure, trackable, incorruptible data, then that is what you need blockchain for…It is going to have a lot of uses in the trucking industry where those types of applications and functions are needed.” – Ken Craig, VP at McLeod Software
What is Blockchain?
Blockchain is a shared digital ledger encircling a list of connected blocks stored on a decentralized distributed network. It is easy to monitor and highly secure, so no one can conspire to change a mistake by altering the database entry. Blockchains are ledger database which is open to anyone in a transaction. In fleet management operation, it might include fleet manager, customs agents, shippers, government regulators, carrier, and drivers. Fleet management companies, software companies specializing in transportation, etc. are investigating and testing blockchain and are expecting that it could reach a tipping point by 2020.
How can blockchain technology help fleet managers?
The concept of blockchain was initially created to support Bitcoin the digital currency, but now industry experts are expecting a whole universe of possibilities using blockchain including fleet management and transportation.
For fleet managers blockchain technology opens doors to better productivity and efficiency. Fleet managers can use blockchain technology to improve asset utilization, better security, data accuracy, enriching visibility, etc. Below are some of the benefits of blockchain technology:
Fleet maintenance: In case of fleet maintenance, fleets will have the capability to know everything about a truck/fleet from the time it rolls off an assembly line throughout its service life including every oil change, warranty repair, parts replacement, etc. would be visible in the blockchain to all concerned members with access to blockchain.
Enhancing visibility, security, data accuracy: Freight contracts, transfer of documents, safety of transferred item, security of driver, management of parts, and asset tracking are among the many essentials of the fleet business which would become easier and more secure through new applications built around blockchain, the shared digital ledger.
Trucking and Transportation: In trucking and/or transportation, blockchain is expected to accelerate and better secure freight movement transactions for shippers and carriers. Once a blockchain ledger is created, both the carrier and the shipper can track commitments made by the shipper, the exact time when the carrier delivers the freight, etc. in real time which creates a totally transparent environment.
“We have been running tests of blockchain programs with select carriers, such as Dart, which has cut down from 21 days to 7 days the time it takes to execute a transaction. And carriers could be paid almost immediately through smart contracts and blockchain.” – Timothy Leonard, CTO, TMW Systems (US based Software Company)
Reduce inefficiencies in fleet management: Manufacturers have a difficult time finding the trucks/fleet to transport their goods. This is not because there are not enough truckers; in fact, truck drivers drive more than 30 billion miles with half or empty truckloads. According to the American Trucking Association, in the US alone there are more than 1.4 million fleet management companies employing more than 3 million truck drivers. But 90% of these fleet management companies have six trucks or fewer which makes it challenging to match shippers (demand) with fleet management companies (supply). Blockchain can solve this problem by matching shippers with fleet management companies. With both the parties collaborating and participating in the secure digital ledger will solve this problem globally.
As of today, only a limited number of fleet management companies are using blockchain technology. But as technology grows, it is just a matter of time before everyone starts using blockchain. The influence of blockchain within the fleet management industry will only keep growing in the coming years. So, if your organization is considering emerging technologies for managing fleet, then blockchain technology should be on your list of technologies as it will be beneficial in smoothing out transaction frictions.
Get in touch with Latium for more information