How blockchain is primed to change the transport industry
Blockchain has the potential to transform the financial world, offering greater efficiency and security to banking and other financial institutions. As the technology becomes more mainstream, however, attention is turning to how it can help industries outside of finance.
Speaking on a recent panel, Nick Johnson, developer at the Ethereum Foundation, spoke about how blockchain could change the transport industry alongside other technologies both in the near future and as society continues to evolve.
Perhaps the biggest change to the transportation industry that could be brought about by blockchain technology is the removal of middle men and administrative costs. With blockchain helping to reduce these, the industry would be free to assign funding to other areas, and the risk of issues like lost shipments and incorrect documentation could be all but eradicated.
According to a study by Maersk and IBM, administration costs made up as much as 20 per cent of total spending in the ocean shipping industry. Smart contracts stored on the blockchain could help change that.
Johnson said: “The bulk of the impact blockchain is going to have are still to be seen. The vehicles shape the city and the environments we live in are to a very large degree shaped by how we move around them, and it’s still very early days for blockchain’s involvement with transportation.
“But we should be expecting to make some enormous changes in terms of how it affects the built environment and the world we live in, and we shouldn’t just be expecting the same but more. Not just taxis that are cheaper because they’re driverless, but the real sting hinges in how we get around but in how we structure our entire environment.”
According to the American Trucking Association, there are around 1.5 million trucking companies in 2018, employing approximately 3.5 million truck drivers. However, 90 per cent of these companies have six trucks or fewer in rotation.
Organisations such as the Blockchain in Transport Alliance are already working towards the larger goals associated with advancing technology, such as using common framework for logistics management, asset tracking, transaction processing and more on the blockchain.
Sale Chrystie, VP of strategic planning and analysis FedEx, said of joining the BiTA: “We have millions of records a day in our system, and we think of blockchain as a secure chain of custody that could transform the logistics industry. We believe it holds a lot of promise in that space and would streamline all that data exchange in a very secure way.”
Another significant change we could see in the future is vehicles suited to specific needs, rather than cars and vans which have been built with technology capable of serving all needs for all people all at once. This is a shift away from the current trend for smart technology to be built into privately owned cars, and could fundamentally change how society and industry operate.
Johnson continued: “Vehicles could be summoned from anywhere at a moment’s notice, and no longer require a driver to move them around, then we should expect changes in ownership and therefore parking needs. That means reshaping how you structure cities around the needs of people to park and to use vehicles, and changes how you transport goods without needing human supervision.
“I think we’re going to see more organisations and individuals whose sole purpose is to facilitate servicing and restocking of vehicles. We’re going to see more diversity in terms of what sort of vehicles we use and what we use it for.”
If the success of services like Uber or Lyft have taught us anything, it’s that people value convenience above most everything else, and part of the excitement around blockchain is down to the perception that the technology could help provide this in day to day life.
While the implications of blockchain for industry are huge, it also has the potential to transform how consumers experience the world through transport.
“We’ll see a blending of private infrastructure and public transport,” said Johnson. “So a typical commute for someone in the future might look like stepping out of your front door and entering a rideshare or, if your travelling isn’t timed then perhaps a little one-person car for the first few kilometers to your high speed train stop.”