Blockchain technology could slash the cost of transactions and reshape the economy.
Blockchain technology will soon facilitate and track financial payments, cross-border trade and freight flows. A peer-to-peer digital network, blockchain is an open-source distributed ledger that records transactions between two parties efficiently and in a verifiable, secure and permanent way, while also enabling ‘smart contracts’ that trigger transactions automatically.
Logistics companies are already using blockchain for commercial settlements of bills of lading and customs; to pay for international cargo fees with Bitcoin crypto-currency; to decentralise the tracking of shipping containers; and to record a globally accessible provenance trail for diamonds that has enormous applications for quality assurance in retail, agriculture and pharmaceuticals supply chains.
The impact of blockchain on freight transport will go hand-in-hand with the rise of autonomous and connected vehicles and other exponential technologies. Envision a world where self-driving vehicles, with routing and pricing software tuned to minimise energy use, are guided to the quickest route by real-time traffic updates and to the next customer by real-time requests, with blockchain eliminating the middleman to match freight with vehicles, charge transaction fees and set terms and conditions in a smart contract that sends payment to a supplier as soon as sensors confirm a shipment is delivered. No drivers, back office staff or banks required. Tolls, parking, energy and maintenance automatically transacted. Logistics companies face the prospect of competing with anonymous fleets of privately-owned vehicles optimised for quick, low cost delivery services.
Is this a realistic vision of blockchain’s impact on freight transport? What other possibilities are emerging? And how soon must we be ready for blockchain integration to our business models?