What is the Future of Global Trade and Transportation While the Blockchain Is Here?

The blockchain’s influence has spread across finance, healthcare, media, government, and several other sectors. Bitcoin was the first trial at maintaining a decentralized, public ledger without any formal control or governance, and since then, there have been other protocols similar to it that are used to solve other problems, such as those in the global trade industry.

There is one major feature that all different types of trading have in common, and that is transportation. That’s because it is the link between the buyer and the seller. This is what would bring the buyer and goods purchased together and it is also the medium through which the seller would deliver the goods. Transportation could even be considered as the backbone of trading.

Transportation Industry on a Global Scale

The transportation industry is globally responsible for moving people, animals, and goods from one place to another. It could be either by land, air, or sea, and this industry has one of the largest networks that includes a wide variety of organizations, such as travel airlines, railways, and cruise lines, municipal transportation companies, freight railways, cargo trucking, and air and express delivery services. These companies may ship within a specific company or internationally.

Over the years, recent developments in the transportation industry have changed our lifestyle. In the early days, people used horses, donkeys, and other animals to move to different locations and transport goods. Man-made boats and ships were used to travel along the seas and across oceans for exploration and trade, and most people settled in areas nearest to the coasts because of the difficulties and dangers that arose from road transportation. As far back as the 1600s, water transportation was used to ship products to different ports. In the 1800s, railroads were built throughout the United States, which actually resulted in more areas of the country being developed and populated, and even more goods from other parts of the country were delivered to these areas with relative ease. The transportation industry further developed in the 1900s with the introduction of the automobile and the airplane.

The Current State of the Transportation Industry: Its Problems and Challenges

Lately, the transportation industry has been facing several challenges, in which many of them are always related to the consistent changes in the regulatory environment. The American Transportation Research Institute released a report in October 2015 that listed the top 10 issues facing the trucking industry. The top three (in order) were hours of service regulations, the Compliance, Safety, Accountability (CSA) Program, and driver shortage.

Intelligent transport systems are gradually revolutionizing the transport industry around the globe, and these technologies offer some of the best prospects for improvements in safety, efficiency, and environmental outcomes. The government, and regulators globally, will be challenged to keep up with the pace of this technological change and ensure that transportation regulations or other barriers are not preventing a new technology or business model from being adopted. For example, we have seen a rapid increase in the use of remotely piloted aircraft (or “drones”), which are being used for an increasingly diverse range of civilian purposes, including aerial photography, search and rescue, and agricultural crop spraying.

Investing Wisely to Support the Transportation Industry’s Economic Growth

Understanding the relationship between transportation and economic development, as well as why and when to invest in transportation infrastructure, is a key challenge for the government. Transportation has a critical role in supporting economic growth. As a country, we depend on international aviation and maritime links to connect us to the global marketplace. We need to avoid unnecessary regulatory barriers to international freight and ensure that the country’s policies encourage the smooth operation of our ports.

While investment in transportation has historically been a driver for economic growth, that benefit is largely seen when an economy is developing and when a country puts the necessary transportation systems to support a modern economy in place. Once these networks are in place, the focus shifts to reducing the cost of doing business along these routes (addressing bottlenecks) in order to maintain relative economic competitiveness.

Transportation investments that connect regions to other markets can have a two-way effect. New connections can allow for the development of economic activity in a region or they can allow existing economic activity to be drawn away from the region.

The Future Presented by the Blockchain

An important phenomenon that must be explained in detail about the ways of solving the transport problem is the blockchain. The blockchain gives users access to an encrypted, decentralized, and tamper-proof ledger, and this can be used by transportation companies. The blockchain also gives room for tracking companies and they would be the one to verify whether the package has arrived or not at every checkpoint the package would pass through. The blockchain makes it impossible for corrupt officers to forge documents, because with the blockchain, steps can be retraced to know where it all went wrong. It also helps cut down on the necessary paperwork needed to track shipments.

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  Blockchain means improved freight trackingDemand is increasing and the same goes for the expectations of consumers. It is always increasing. For this reason, commercial transportation companies have to step up to meet with the ever-increasing demand. This is because trading and transport go hand in hand. This is why they have to make innovations. Lots of transport companies have already made investments in tracking technology. Transportation companies always are in need of authenticated secure data that would help them consistently improve their operations. The system that is being used currently is subject to misinterpretation and manipulation, which would obviously have adverse effect on the global supply chain. With the aid of blockchain technology, the issues that are being experienced currently would not have existed to the extent in which it has currently. By making use of the blockchain for data authentication, the entire network must contribute and validate data so that it is no longer subject to tampering. The increased reliability of tracking information would also have an effect on the goods that are purchased.

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  Effective fleet or vehicle performance trackingThe importance of tracking is not limited to only performance delivery. It is also useful to individual vehicle performance within a fleet. For example, if an individual should purchase a second-hand vehicle, the blockchain would help to authenticate information in the previous performance of the vehicle and its maintenance.

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  Making use of the Internet of Things for vehicle-to-vehicle communication The blockchain and the Internet can come together to form an unstoppable combination which would aid in improving the effectiveness and efficiency of the trucking industry. Vehicle-to-vehicle communication gives way for multiple freight vehicles to form a convoy and enhance communication that would improve fuel efficiency and safety.

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  Make load boards more reliableMany transport companies are always on the lookout for load boards because the data often gets muddled or duplicated, which provides an unreliable and unrelated representation of demand. Shippers can now post loads that have been time stamped and also recorded and verified. With this feature, loads cannot be duplicated and data would not lose its integrity. This also eliminates the need for a middleman in transportation.

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  The blockchain helps to cut costs and also eliminate middlemenThe blockchain helps to reduce costs in the freight Industry, because tasks under the blockchain are self-executing and only executed when the specific conditions are met. The blockchain helps to cut unnecessary administrative costs and it removes all the probable errors that may have occurred.

Blockchain companies

Companies are already looking into the possibility of the blockchain taking over. Infant companies, large companies, and even those not related to logistics and shipping are all giving the blockchain some serious consideration. Even the big names in the food industry such as Walmart, Nestle, and Dole have been trying to discover how to use blockchain technology to watch the food supply chain, allowing for faster and more accurate recalls.

The blockchain has numerous platforms under it, which have been introduced to reduce or eradicate the disadvantages in which the current transportation companies are facing. These platforms have been put in place to reduce costs, stop pilfering, or bring it down to the barest minimum, reducing the amount of paperwork and irregularities incurred during transport. The platform that has been able to do this effectively is CargoCoin.

The new technology introduced by CargoCoin is aimed at simplifying and ironing out the wrinkles of bureaucracy. The project operates from the standpoint of revolutionizing global trade and transport through decentralization. Being an online platform, it links the physical worlds of trade and transport to the blockchain. It serves as a connection between the various parties involved in international trade and transportation, aiding their exchange of information on cargo, meeting their transport needs, as well as providing supplemental services. It is also sufficient as an electronic means of recording the trading process from the offer to the delivery, and it can additionally be used to facilitate payment. CargoCoin is the singular idea that could project the world of trade from the 19th century into the future.

CargoCoin is to be based on the newest ERC223 token standard rather than the ERC20 standard. ERC233 allows for more advanced, precise, and universal handling of smart contracts (preciscely what is required for the project), while avoiding potential token traps.

There would be an extension to the shipping industry when it gets to its full scale. Containers, bulk, break bulk, liquid bulk, land transportation (trucks, railways), air transportation, and other types of “new age” transport such as pipeline transport, space cargo, intercity and outer city shared rides, allowing for infinite functionality. This will result in a form of synergy between the commodities and cargo traders with all transport means on a global scale. Presently, CargoCoin is starting off with international marine trade. With the introduction of the blockchain in global marine transport and trade, revolutionary developments can be developed, changes that will breathe new life into global trade and transport.

Other blockchain-based technologies concerned with the transportation and global trade industry include some major industry players that have recently delved into projects that would help test the use of the blockchain in numerous shipping transactions. The popular Danish shipping company Maersk has recently partnered with IBM to test a blockchain-based approach in tracking shipments.

Apart from IBM and Maersk, other companies have also made use of the blockchain to monitor and give protection to its valuable assets such as diamonds. An example of such a company is the London-based startup Everledger. A consortium of South Korean businesses have utilized the technology to track marijuana containers from shipment booking to cargo delivery. Another blockchain technological platform is Webjet. Webjet is an online travel portal that develops blockchain solutions to allow a stock of empty hotel rooms to be efficiently tracked and traded, with payment fairly routed to the network of middlemen sites involved with filling in last-minute vacancies.

There are other blockchain platforms that deals heavily in retail services:

Loyyal — This is a blockchain-based universal loyalty framework, which aims to allow consumers to combine and trade loyalty rewards in new ways, and for retailers to offer more sophisticated loyalty packages.

Blockpoint.io — This platform allows retailers to build payment systems around blockchain currencies such as Bitcoin, as well as blockchain-derived gift cards and loyalty schemes.

Conclusion

The blockchain’s benefits spread across all industries. As can be seen above, it has a lot of revolutionary benefits in the transportation and global trade industry that includes effective vehicle performance tracking, cut costs, and it also eliminates middlemen. It is quite evident that global trade and transportation would be changed by decentralization. The blockchain is here to stay and the blockchain could solve some of the transportation problems and stress for buyers, sellers, and transportation companies.

About the author:

Kirill Shilov — Founder of Geekforge.io and Howtotoken.com. Interviewing the top 10,000 worldwide experts who reveal the biggest issues on the way to technological singularity. Join my #10kqachallenge: GeekForge Formula.