Cargo theft is a huge problem in the US today. You may think that these billion dollar companies have a problem, but you also have a problem as it is estimated that goods are up to 20% more expensive to balance out losses due to theft.
These shipping companies are determined to look for alternative ways of countering cargo theft. In the past, their efforts have amounted to little.
However, Blockchain has been touted as the brand new method of stopping this, which amounts to a $1.5 trillion industry in the US alone.
How is Blockchain Disrupting this Industry?
You may already have heard about Blockchain due to the recent publicity regarding cryptocurrencies like Bitcoin. But Blockchain is a type of technology it’s not a product. It merely powers a wide range of industries, including cryptocurrencies and various business money transfers.
The point of Blockchain is to make it easier for trucking companies to become more efficient in the way they manage their logistics.
It is estimated that this technology could make logistics both more efficient and cheaper. The lowering of costs alone would do much to balance out the inevitable losses originating from cargo theft.
Why is Blockchain So Attractive?
The first thing to understand about Blockchain is that the entire system is decentralized. There is no central point that can fail and no central point that can be maliciously attacked by a third-party.
Multiple parties manage information that is impossible to corrupt. It offers a level of transparency and security that’s unheard of in the current way of doing things.
Trucking companies have traditionally relied on a network of brokers to manage the various loads, which means there’s a wide no man’s land where things can go wrong.
More Transparency for Customers and Companies
Brokers may become a thing of the past if Blockchain is universally adopted by the various trucking companies. There’s also a benefit to customers with Blockchain because there’s a high level of transparency.
Shippers can gain access to the entire shipping chain at a glance. From the moment they order an LTL freight quote to the second they send their items they can not only track but send important information about their shipment. They also have oversight when it comes to carrier compliance.
Blockchain is immune to traditional attacks because once information is in the Blockchain that information can’t be changed. There can be no disputes and no manipulation of records.
Contrary to what many people think, the majority of cargo theft happens via the white-collar way, as opposed to a gang of thieves robbing a truck as it cruises down a lonely stretch of freeway.
Smart Contracts are the Way Forward
Furthermore, contracts between trucking companies and their customers can now be fully digitized and managed in real time.
After a transaction is logged, smart contracts can automatically release escrow payments and payment milestones as the trucking company meets certain conditions, which are also tracked through Blockchain.
This will reduce costs on both ends, which can be passed onto customers, while still giving trucking companies their expected profit margins.
Last Word – Trucking Companies are Joining the Revolution
This technology has the potential to disrupt the industry that all the major trucking companies are placing bets on its success.
The results are beneficial for both shippers and the companies themselves. With more transparency, more efficiency, and better security it has everything trucking companies and customers expect when they order and send shipments.
In short, a full rollout of Blockchain has the potential to shake up this lucrative industry.
Do you think Blockchain can upset the entire logistics industry?