THE WORLD OF TRANSPORTATION AND LOGISTICS IS BEING REVOLUTIONIZED BY BLOCKCHAIN. Learn how blockchain technology transforms the transportation and logistics industry, making businesses more efficient and profitable!
We are acquainted with transportation, and we all are involved in some or the other kind of transportation process. The evolving digital innovations, including automated vehicles, ride-sharing, Smart Contracts, Blockchain, and the Internet Of Things(IoT), transform people’s lives while analyzing how people view mobility.
According to a recent report, the global transportation industry will grow at a CAGR of 3.4% through 2027.
The transportation industry strives toward digital transformation to increase efficiency, reduce congestion, track shipments, secure shipment records, etc.
Blockchain technology solves all transport-related problems, from fleet tracking to smart contracts to load onboarding. Transport business experts are looking to accelerate the adoption of Blockchain technologies for digital transportation and leverage its advantages.
There is a rise in Intelligent Transportation System (ITS) that aims to facilitate urban mobility at a reasonable cost and create an ecosystem connecting vehicles with the network infrastructure.
This article will make you understand how the transportation industry faces challenges during the transportation process and how Blockchain technology helps overcome them.
Challenges Faced by Transportation System
The transportation industry has often faced problems while streamlining its business operations, tracking vehicles, etc. Before heading towards how Blockchain application development can revolutionize the transportation industry, it is vital to understand the significant challenges that the sector is facing.
1. Rising Fuel Cost
The diesel on an average of 5.57 U.S. dollars is reported in the United States in May 2022. This is the rise of over two U.S. dollars compared to the previous year and the highest average monthly price in decades
The inflation in fuel prices increases carriers’ prices, leading to certain losses. The transportation costs will certainly boost due to the rise in fuel prices, and it will let people pay more freight charges.
Hence, if shippers charge more to transport, ultimately, the receivers have to pay more to make up for additional costs—the rise in fuel prices low down the revenues and income of drivers.
2. Delays in Transportation
Traffic congestion at multiple checkpoints is one of the biggest challenge the transportation industry face today due to mismanagement of the fleets. This will lead to unforeseen delays in crucial deliveries across multiple destinations.
Even if the packaging and dropping off shipments at dockyards or airports can be done on a timely schedule, the transportation industry still fails to deliver consignments on time. Sometimes container ships have to wait for weeks before unloading initiates. The reasons include bad weather, port congestion, strikes, container shortages, and changes in service schedules that can delay a ship’s departure, arrival, loading, and unloading.
3. Low Productivity of Workers
The workforce’s productivity contributes a lot to increase the growth of any organization. The same happens in the transportation industry.
The stressful timely deliveries and round-the-clock support at dockyards or destinations make employees negligent and ignorant about their duties. Also, the industry faces a shortage of delivery personnel, leading to the workloads of multiple time-bound deliveries being placed on the current workers.
This reduces their productivity as the workers are under-skilled, overworked, and inefficient at their work. Organizations must pay additional training costs to train their underperforming human resource to eliminate this problem.
4. Managing Fleet Management Costs
Reducing fleet management costs will be one of the companies’ biggest challenges today.
The organization sometimes fails to accurately record mileages and driver hours, schedule jobs, and route efficiently in fleet management. Also, it reduces downtime, measuring and then managing all these areas more closely to ensure you are operating as productively as possible.
The rise of digital transformation provides real-time insights into their business operations. Streamlining fleet management using technology saves time, money, and administration, allowing fleets to run more efficiently and proactively.
5. Evolving Digital Requirements
Still, in this fast-changing digital environment, many transport companies struggle to change their business approach or incorporate new technologies or automation systems into their business environment. The main challenge they face with the evolving digital requirements is extensive.
Their failure to transform the transport processes to match the digital transformation can result in fewer revenue and profits. They have to reshape their business strategies and models of conducting business to stay competitive in the digital age.
Transport professionals need to react fast to satisfy the evolving digital requirements. Digital transformation helps you beyond installing applications, secure information storage, and adding GPS tracking systems to your assets; there is much more to that.
6. Need for Smart Fleet Technicians
Ensuring that every product or service works efficiently is necessary round-the-clock maintenance and support. The same things follow when it comes to fleet management.
Manging timely service, maintenance, repair, and shortage of a specific part are the biggest challenges companies often face during transportation.
The shortage of expert vehicle technicians handling maintenance is also a big concern. This will lead to delays in maintaining and repairing a vehicle or a part.
To overcome this, the companies should know about the condition and mileage of every vehicle, book service and maintenance work, avoid unnecessary delays and appoint daily vehicle inspections so that you can spot the problems in their initial phase.
Blockchain technology used with equipment maintenance software can improve tracking and administration. Blockchain can generate a secure, transparent record of all equipment maintenance actions. This record can include maintenance type, date, and notes. Software for equipment maintenance can access and analyze this information, providing insights into the equipment’s maintenance history and identifying patterns or trends that may predict future maintenance. Companies can increase equipment performance and reliability by merging blockchain with equipment maintenance software. Blockchain can boost transparency and traceability, enabling to track and account for maintenance tasks.
How Blockchain Technology Revolutionize The Transportation System?
There has been no technology than Blockchain regarding security, transparency, and faster accessibility. Most industries have started implementing this disruptive technology in their business workflows. Here are some solutions that Blockchain technology caters to the transportation industry.
1. Better Freight Tracking with Blockchain
The rising demand and expectations of consumers to get delivery the same day and on-request leave transport companies looking for an innovative solution and delivering faster and more efficient services to their customers.
There is a need to scale the fleet tracking technology they are using today to meet their challenging user demands, specifically regarding authentication. They need to be authenticated, secure data to enhance their operations consistently.
By implementing Blockchain technology, these issues will get permanently resolved. Blockchain solutions ensure data authentication where the entire network can contribute and validate data. You can improve the efficiency of your freight operations by tracking with the Blockchain.
Moreover, you can achieve increased reliability of tracking information that helps store massive shipments.
For instance, refrigerated and temperature-controlled transportation requires on-time delivery. Here Blockchain comes for your survival. There should be a considerable investment in Blockchain technology to preserve temperature-controlled goods and perishables.
2. Implementation of Blockchain with Internet Of Things (IoT) to Boost Efficiency
With IoT applications and AI, blockchain comes to your rescue for storage monitoring. The storage or volume of cargo determines the cost of shipping freight. IoT sensors in trucks and other transport vehicles can detect storage space in a shipment and calculate costs accordingly.
Blockchain-enabled IoT sensors can save shipments with temperature deviations, specifically for biopharmaceutical shipments requiring temperature, humidity, and location monitoring to send to the market safely.
Swiss firm SkyCell was able to bring the temperature-deviation rate down to less than 0.1% for their refrigerated biopharmaceuticals using Blockchain-enabled IoT sensors. Also, it utilizes cloud computing to maintain a record of all documentation.
Blockchain technology maintains the security and integrity of the valuable and sensitive products transported by checking them at numerous checkpoints during global shipments.
3. Faster Tracking of Fleet
The fleet tracking is not only one of the delivery performance metrics. But it also includes the performance of the individual vehicles within a fleet. Organizations not only use the new vehicles for the transportation of shipments, but they can also purchase an old delivery vehicle for the transportation process.
Here Blockchain technology helps them authenticate information based on the previous performance of the vehicle and its maintenance history. There is no need for any third-party interference in storing and validating the data.
Integrating Blockchain into your systems facilitates effective tracking of fleets during global shipments and keeps records secured, updated, and validated at all checkpoints.
4. Easier Carrier Onboarding
Blockchain technology acts as a decentralized network storing carriers’ records across the transportation and freight industry. You can validate the documents in case of any second-hand vehicle or a faulty driver.
The carrier can be quickly onboarded from the desired location with the blockchain implementation into your systems. It helps to quickly identify the new carrier and then onboard it on time.
5. Smart Contracts Reduce your Transportation Costs
The supply chain industry often faces challenges during payments as they rely on paperwork where forms keep on passing through multiple channels for approval, which may lead to loss and theft.
With Blockchain and smart contracts technology, you can eliminate transportation costs.
Smart contracts are one of the most powerful features utilized by the freight industry. They are usually called self-executing tasks coded through the blockchain and executed when a specific condition is satisfied.
For instance, if a company wants to release payment to a receiver when a shipment reaches its destination, it can provide a smart contract to make automated payments when the item has reached a specific destination.
You can save around 20% of the overall costs of transportation using smart contracts.
6. Making Load Boards More Reliable and Efficient
Transportation companies often face difficulties when loading massive data as the data can get duplicated, cluttered, or mismanaged. But with Blockchain technology, you can simply remove this obstacle as the Blockchain decentralized network lets shippers post timestamped loads.
The data will not lose its integrity with this. Moreover, third-party interference is not required as the Blockchain can authenticate load data and prevent duplication.
The crux of this article is that Blockchain technology has proven itself to be a true game-changer for the transportation industry. It has a great potential to solve all technical and physical glitches that arise during shipment transportation globally. Technology has revolutionized the transportation industry and continues to grow its efficiency and profitability.
Blockchain ensures transportation companies store their massive databases in safe and secure systems with no chances of any losses or theft. Moreover, it streamlines your business process, saves transportation costs, faster fleet tracking, and enhances the traceability of the shipments.
Healthcare, banking, real estate, and retail are not only the industries leveraging the benefits of Blockchain technology that adds security and transparency to their operations. They are many more to that. This way, Blockchain transforms the future of every business kind and leads them to digital transformation.
Some areas in which the trucking industry struggles in terms of efficiency, cost and service to the end user. Blockchain fix those areas that is Better Freight Tracking, Vehicle Performance History, Easier Carrier Onboarding etc.
The data will be secure, and its flow will be validated in real-time to avoid any lags or data input tamper, thanks to blockchain. This also improves the accuracy of tracking information, which positively impacts the shipping process’ efficiency.
1. IOT and AI improve efficiency
2. Effective tracking performance of the vehicle
Blockchain technology can also improve efficiency by allowing all parties to trace shipments in real time and reduce risk (and expenses) by automatically (and securely) issuing and tracking the relevant shipping, financing, and insurance documentation. The rising acceptability of e-bills of lading makes it much easier to recognize benefits in the shipping space.