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FEATURE: Volvo Trucks believes that blockchain can transform the logistics industry

05 September 2019 #CV Sector #Features & Interviews #Logistics #News #TNB News

The idea that mathematics could help deliver savings and efficiencies in the world of transport and logistics is not a new one.

Advanced telematics and route planning software are just two well established examples of number-crunching nous in action.

And according to Volvo Trucks, there could be more to come, with the company predicting that the intelligence behind crypto currencies like Bitcoin could be next to make an impact.

Specifically, it sees ‘blockchain’ – a mathematically-enabled system that allows detailed records and transactions to be shared and accessed without the need for central records – as a way of delivering transformational change.

As Jonas Lindholm, Vice President of Productivity Services at Volvo Trucks explains, blockchain technology is based on a branch of mathematics called cryptography. The technology uses a chain of protected records to share the details of transactions to all participants in the blockchain and distribute records across a network of computers—thereby eliminating the need to maintain records centrally.

If a record in one block is changed, the records in each block in the chain are changed. This means no-one can alter the data within the blockchain without the permission of everyone else, making this a highly secure technology.

Blockchain technology is already being utilised across various arms of the supply chain and in other sectors like energy, healthcare and finance, and we are starting to see its benefits in the transport and logistics industry too.

According to Lindholm, the biggest benefit is faster processes and a reduction in the burden of administration.

He said, “Blockchain could eliminate today’s paper-based systems where forms have to pass through numerous channels and approvals, which increase the risk for loss and fraud while creating a massive amount of administration.

“This would be done through smart contracts – self-executing tasks that are coded through the blockchain and performed when certain conditions are met.

“For instance, if a trucker reaches a destination or hands over the cargo to someone else along the route, a smart contract could make everyone in the blockchain aware of the event and immediately make the shipping document available to the next party and/or release the payment.”

Another benefit could be in minimising the impact of claims and resolving disputes faster.

“All of the data that is tracked via the smart contracts gives a lot of insight into the physical movements of, and interactions with the transported goods. This can be very useful in eliminating inefficiencies in dispute resolution,” explained Lindholm.

He continued, “For example, if a load or the truck is tagged using IoT (Internet of Things) sensors, a blockchain record will show much more information about the delivery such as data about the time and condition (temperature, humidity etc.) of goods throughout the supply chain. This will create an unalterable record as to whether a given load was delivered according to the conditions stipulated in the smart contract.”

Blockchain could also be transformational for the industry when it comes to tracking assets, says Lindholm.

“There is already some good tracking technology being used today but scaling it to increasingly complex demands is proving difficult. Using IoT sensors and truck telematics, blockchain can give shippers, carriers and customers greater insight into vehicle and asset locations, allowing for better load planning and less idle time. The benefits of tracking are not just limited to shipments. Blockchain can also create an accurate and unalterable record of vehicle maintenance and history accessible in real time, which is a big advantage when the truck enters the second-hand market.”

Blockchain could also help the industry become more transparent and drive to higher standards, says Lindholm: “Data stored on the blockchain is easily shared, giving everyone in the supply chain comprehensive track-and-trace capabilities.

“Companies can use this information to provide proof of legitimacy for a product and track any problematic shipments – a huge benefit to the food and pharmaceutical business. Transport companies are able to show customers the standards to which goods were transported in. There is also advantages for the end-user – people can find out more about the products they are buying – whether it is ethically sourced, genuine and kept in the right conditions.”

Lindholm added: “These benefits could be just the tip of the iceberg. Many more applications for blockchain will emerge as the technology interacts with other innovations. In the United States, retailer Walmart is already trialling blockchain technologies powered by IBM to digitise processes and improve food safety in their supply chain and others are monitoring the results closely.

“Nevertheless, there are certainly a number of challenges to the wider adoption of blockchain in logistics. Standardisation, lack of knowledge, legislation and trust in a new technology are just a few of the obvious hurdles.

“But the growing demand from society and consumers about how, from where and at what environmental and social cost goods are transported means that blockchain will not just be the next buzzword, but a ‘game changer’ for the logistics industry.”

And this is an idea backed by research. A 2018 Accenture study reveals that consumers are ever more minded to opt for brands that go above and beyond when it comes to sustainability and the environment, as well as those that openly share their own technologies to offer effective solutions to world problems.

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