In 2019, four major vehicle logistics companies came together to form a blockchain consortium backed by IBM and named Vinturas. But this tweet is not about the companies or the consortium they formed; it explores what, in the first place, would pique the interest of vehicle transport companies in blockchain technology.
What is Blockchain?
Blockchain is an open-source decentralized public ledger of transactions from start to finish. Anyone can contribute to it by adding new blocks to it; this decentralization ensures that no single entity controls the system and that changes can be reviewed and approved by consensus before they are included in the final block.
The key benefits of using blockchain technology include increased security, transparency, and record-keeping efficiency.
Blockchain in Logistics
Blockchain technologies have the potential to disrupt multiple industries. From the supply chain to finance, blockchains can dramatically increase the speed at which information is verified and transferred from one place to another.
Primarily, the integration of blockchain into the operations of the consortium was to boost supply chain efficiency.
In the logistics industry, blockchain has the potential to lower transaction costs while increasing transparency and lowering transaction costs for shipments between different countries.
As the world is moving towards decentralisation, blockchains are presented as an alternative to current structures which still have a lot of traction.
Tracking and Accountability
Blockchain offers companies a safer way to track and manage intellectual property, increase transparency and improve accountability. The technology behind blockchain provides an alternative set of incentives to traditional business models, which may encourage more innovation and reduce costs.
By digitalising logistics processes, carriers can boost supply chain visibility and provide a more reliable service to their customers. What does this mean for the transport logistics industry as a whole?
With blockchain, it is possible to run entire auto transport logistics without having to rely on physical or even digital documents; instead, data is shared through unique digital signatures based on blockchain technology. This also boosts accountability on the part of carriers.
Blockchain-based truck tracking enhances not just the visibility of the chain, but also the reliability of the transactions between carriers and brokers and their customers. Such an arrangement particularly allows customers to monitor their vehicles in real-time during transit.
Therefore, being an open system, it helps to protect the interests of customers and reduce fraud in the auto transport sector.
Shipping a car requires signing various contracts and agreements to ensure the absolute protection of the vehicle as well as clarify to whom belongs liability in the case of damage. With blockchain, this process can be more seamless since both parties would be able to share data and information easily. This includes information from comprehensive vehicle assessments before pickup and during delivery.
Blockchain has widespread appeal because it creates trust in a distributed network. It has the potential to disrupt existing industries by enabling members to execute transactions in a manner that is both secure and transparent.
Thus, another factor that blockchain introduces into the car shipping process is trustworthiness. Vehicles are an expensive investment and no car owner wants to entertain the possibility of their vehicle going missing in transit because they handed it over to frauds.
Vehicle transport companies also, on the other hand, want their customers to be at peace and trust them with their valuable vehicles. Blockchain could serve as a meeting point of trust between both parties. Transactions carried out over the blockchain are secure and authentic forever.
Blockchain technology would also help brokers to coordinate their operations. Brokers function as liaises between customers and carriers and thus play a significant role in auto transport operations. However, this role can come with a lot of bulk work trying to connect customers to carriers and vice versa. By maintaining documents on the blockchain, brokers can manage and share data better across their clientele.
We will, first, consider the impacts that blockchain technology has been making in the logistics industry as a whole before focusing on car shipping specifically.
The whole process can be resolved quickly by signing smart contracts backed by blockchain technology. By drastically reducing processing times, all that’s required is for the customer to submit their vehicle for pick up/drop off and then ease their mind until delivery is made.
Many people think of blockchain as cryptocurrency and bitcoin but that’s only a small bit to the comprehensive dimensions of the technology.
So, blockchain in the auto transport industry does not necessarily mean companies would start accepting payment in bitcoin (that’s for the larger society to decide). Rather, it explores the various ways that introducing blockchain into the car shipping process optimizes operations and enhances the quality of the transactions between carriers, customers, and brokers.