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There is no doubt that technology has changed the way we do business. A prime example is a blockchain. Since 2008, blockchains have made monetary transactions easier and more secure. You may have heard about them through cryptocurrency. A blockchain is a distributed database that stores transactions and organizes them in chains of blocks. Each block in the chain is linked via cryptocurrency and can store information, such as a smart contract. When information is added to a block, it is time stamped creating a timeline. It’s easy to see why blockchains are utilized in a number of industries, which now includes transportation. But how will blockchains help the trucking industry?
Blockchains enable businesses to perform transactions without the use of intermediaries, especially when it comes to payment processing. This means middlemen are cut out of the picture, which puts money back into the pockets of transportation companies. Another issue blockchain has solved is payment disputes. According to Pixelplex, $140 billion a day is held up in payment disputes in the transportation industry. Blockchains eliminate processing delays and disputes from the information attached to a transaction. In using a smart contract, companies automatically receive their payment once the information has been verified. Other bonuses to using blockchains include faster and cost-effective deliveries, easy access to money, better communication with customers, and real-time tracking. Yet, there are some challenges to using them. One challenge is the concerns about cryptocurrency and their volatile fluctuations. Another challenge lies in confronting the current infrastructure to use blockchains in it.
Blockchains have not become the standard yet in the transportation industry. Also, there may be some that are hesitant to use blockchains because not everyone knows how they function. It may be only a matter of time before they become a standard business practice, and only if they benefit both businesses and customers. At DVC, you can count on us to find new technology that enables us to better serve our customers. Contact us today to learn more!