Blockchain technology has risen into public consciousness mainly due to the increase in popularity of cryptocurrencies. But its applications go beyond mediums of exchange. The use of blockchain in the transportation industry had accelerated since the COVID-19 pandemic began, in line with massive growth in the e-commerce sector.
Now that Asia and Africa are the main spots where goods are produced, delivering them in time and according to high standards is critical. With numerous blockchain applications able to be integrated, transportation can go through dramatic changes over the next several years.
Better freight tracking
With a growing international trade volume, the freight forwarding market is expected to grow at approximately 4% per year during the next 5 years. Demand for same-day or on-demand deliveries will follow the same path, which is where blockchain can have a meaningful impact.
Since transportation companies need authenticated secure data for their operations, the reliance on EDIs and APIs (systems for providing and recording data) can be replaced with blockchain solutions, in which data will need to be validated by an entire network.
IoT + AI
The Internet of Things (IoT) in combination with Artificial Intelligence can have a substantial contribution in capacity monitoring. Sensors can be used in trucks or other shipping vehicles, allowing companies to detect the amount of space covered by a shipment and use the data to determine the cost of shipment.
SkyCell, a Swiss firm specializing in blockchain, is already using IoT-enabled sensors to create air freight containers. These are used by biopharmaceutical companies to monitor variables such as temperature, humidity, or geographical location.
Vehicle to Vehicle communication
Efficiency in the trucking industry continues to be in the spotlight and the Internet of Things can generate improvements via vehicle-to-vehicle communications. This allows for multiple freight vehicles to communicate, ultimately leading to fuel efficiency and increased safety.
Transportation companies from all around the world can store and validate all the data created via V2V communication, to streamline their operations.
Eliminating the middle man via smart contracts
Ethereum is the largest blockchain and one of its top features is represented by smart contracts. Even though other projects are supporting this benefit, smart contracts are a tool that can be extremely useful for transportation.
These are self-executing tasks, coded through the blockchain, and executed when a certain condition had been met. Supply chains had been reliant on paper-based systems for a very long time and now that technology innovations provide alternatives, the use of smart contracts grows exponentially.
Administrative costs make up for around 20% of overall transportation costs and by using smart contracts, the middle man can be eliminated. Both companies in the industry and the consumers can benefit from lower prices.
The above examples show that beyond the often attention-grabbing cryptocurrency markets, blockchain has numerous applications in diverse industries, of which transportation and logistics is one. Blockchain has the capacity to help reshape and optimize this sector, and has the potential to deliver improvements for all participants in the supply chain, from manufacturers, to transporters and end users. Blockchain is expanding beyond its cryptocurrency foundations and can reshape the global economy.