Late last year, the board of Blockchain in Transport Alliance (BiTA) met for the third time to decide on the possibility of making its upcoming supply chain blockchain framework an open standard for all industry participants. The board, comprised of FedEx, UPS, Triumph, Salesforce and P&S Transportation, was originally produced to address major concerns within the transportation sector.
BiTA has emerged as a standards organization aiming to create a uniform and industry specific application of blockchain technology for supply chain management, asset tracking, and transaction processing for every facet of the industry. The idea is to use blockchain as a distributed ledger to circulate and accurately record the transfer of goods throughout the supply chain.
Bodies like BiTA are desperately needed within the trucking industry, which has been suffering from widespread inefficiency. Furthermore, the industry is extremely fragmented with 90 percent of 1.5 million trucking companies only having six trucks or less. These challenges make it difficult for manufacturers to find trucks to transport their goods and carriers have struggled to keep up with the demand.
Blockchain in the supply chain industry could help to bridge this gap and increase efficiency of transfers between suppliers and carriers. Creating an industry standard blockchain platform would ensure that shippers and suppliers could collaborate much more effectively, and track their assets on an automated basis.
For example, a company could use blockchain for capacity monitoring to identify how much space they have available for transporting goods. Today storage capacity changes constantly so having a blockchain platform that could track this would automatically increase efficiency.
At the moment suppliers and shippers have to complete this process manually. This is inefficient because the two companies have to rely on manual communication before a deal can be made. Blockchain technology would help the two to connect much faster and help to streamline transportation down the entire supply chain.
Other key use cases that would benefit from a supply chain specific blockchain include performance metric monitoring, fraud detection, vehicle maintenance tracking, and quality assurance. In other words, blockchain would increase the transparency of the entire transportation process.
Unfortunately there are considerable barriers to the adoption of blockchain within the supply chain in the short term. Chief among these is the fact that BiTA members would have to agree to an industry standard platform to be used. This means a variety of companies would have to agree to a single solution, which spans across multiple industries.
BiTA’s answer to this problem is to identify clear market standards. One of these is data standardization. Companies must agree to a uniform style of invoicing and other key internal processes if they are to work in harmony with others within the supply chain sector. This way companies would be able to interact on transport deals without running into challenges caused by incompatible software.
That being said, the benefits offered by blockchain and the transparency and leadership provided by organizations such as BiTA are doing much to drive this emerging technology forward. BiTA recognizes that blockchain technology could redefine the modern supply chain and increase efficiency dramatically.
As the body continues to educate others in the industry on the potential of blockchain in the supply chain space and to spearhead the efforts to develop an open, industry wide blockchain standard, we can only expect to see more brands embrace its adoption as time goes on. Even the most maverick companies will realize that blockchain has the potential to catapult productivity through the roof.