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Is There Blockchain in Your Future Supply Chain?

Dec 18, 2017

Blockchain was originally developed for use with Bitcoin digital currency. Now it’s creating lots of buzz in the transportation and logistics industry as the next big thing. What is blockchain and what are its potential impacts on the industry?

Blockchain technology.jpgWhat is Blockchain?

Blockchain is a technology that creates digital ledgers. It makes it possible to prove and transfer ownership from one party to another without using an intermediary such a bank. It creates a continuously growing list of records or transactions, called blocks. The outcome is the creation of a permanent, digital ledger of transactions that may be shared with all parties in the process or transaction. These records are extremely secure from tampering, hacking, or modification. 

Potential benefits and uses

Presently there are many projected benefits and applications of blockchain in the supply chain. Some of these include:

  • Accelerated payment and dispute resolution – Slow payments are often caused by the time-consuming process of confirming all charges on a freight shipping invoice. Disputes over charges on invoices also cause delays to payments. Blockchain will save companies a lot of time with this process by providing necessary clarity and detail. The result: faster confirmations and payments.
  • Improved tracing and tracking – This technology will capture every movement of shipments in real time making it easier to locate freight shipments at any point along their journey.
  • Reduced costs and paperwork – Some manual freight processes may be eliminated by blockchain since more will be automated and recorded in detail. This will eliminate the costs and extraneous paperwork tied to these processes.
  • Increased contract and regulation compliance – Blockchain will allow the automated tracking and enforcement of contract terms and regulations. Documentation of all necessary information to prove or disprove compliance throughout the process will make this possible.
  • Better documentation – Driver HOS and vehicle maintenance history may potentially be recorded in blockchain allowing easy confirmation of compliance to these DOT requirements.
  • Capacity monitoring – Another potential application for blockchain in the trucking industry is capacity monitoring. Since there is limited available capacity, using sensors to capture the amount of space used by a party could be used to determine the cost of the shipment. This data could then be then be used in a blockchain-based system to enable smart contracts and automation of payments resulting in increased efficiencies.

Current challenges

Blockchain may have its potential benefits in the supply chain, but it also has its challenges. Some key obstacles to the adoption of blockchain are:

  • The number of organizations in the freight transportation industry and their technical diversity.
  • Not all companies have the technological capabilities to take advantage of this technology right now.
  • Steps need to be taken now to enable future participation. It’s important that businesses recognize that they don’t have the necessary IT resources in place.
  • The need for businesses to identify the right partners and start the journey towards digitization, if they haven’t already done so.
  • There’s a need for a neural network, a system of specialized interconnected processors, to facilitate industry-wide participation regardless of organizational size.

Unfortunately, individual organizations cannot solve these challenges themselves. It will take organizations working together to make this happen. 

Fortunately there’s help 

To help eliminate these obstacles and make it easier for organizations to work together, there are entities now in place. They are GSA’s Emerging Citizen Technology (ECT) program and the Blockchain in Trucking Alliance (BiTa). 

The GSA’s ECT program is a blockchain analysis effort that was first announced in September. It is opened to contributions from industry members. This open-sourced tool, called Atlas, includes programs, use cases, and resources created by the private sector and researchers working within government agencies. The purpose of this program is to serve as a resource to clarify the potential uses of blockchain technology as well as test, evaluate, and create them. It is hoped that ECT will simplify the application of this new technology for those wanting to use it, by sharing the knowledge of those already using it. 

BiTa was created as a forum for the development of blockchain standards and education in the freight industry by experienced technology and transportation executives. It brings together industry-wide experts who are interested in developing blockchain technology. The goal of BiTa is to reduce costs and make shipping more efficient. It provides educational resources, open forums, conferences, and updates about blockchain as it relates to freight. 

Blockchain technology has a lot to offer the freight transportation industry. With so many challenges around its implementation, will enough organizations jump on the bandwagon by starting their journey to digitization? That’s got to happen if we’re all going to reap the benefits! If you’re looking for ways to reduce freight costs while increasing efficiencies now, contact American Group by phone at 866-553-6608 or by email at We’re Shipping.Simplified®.


Photo credit: Copyright: <a href=''>mikkolem / 123RF Stock Photo</a>