The distributed nature of blockchain technology has recently captured the attention of the logistics industry. UPS has recently joined the ranks of the Blockchain in Trucking Alliance, or BiTA, aiming to improve transaction efficiency and minimize payment disputes.
Autonomous drones and driverless vehicles may be present in the long-term future of distribution, but the rapidly developing world of blockchain technology is currently delivering real use cases for the shipping industry.
UPS announced on Tuesday that it has joined the Blockchain in Trucking Alliance, joining a growing list of forward-leaning logistics companies invested in the future of the blockchain. Linda Weakland, the UPS UPS director of enterprise architecture and innovation, made a statement regarding the move:
“The technology has the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders”
Investment group Stifel has also commented on the potential applications of blockchain technology- defined by the Chicago Fed as “a network of users, each of which stores its own copy of the data”- in the logistics industry. Stifel analyst John Larkin spoke on the benefits of logistics-based blockchain tech on October 29th of this year:
“In our view, blockchain will combine with the truckload pricing futures market, with data analytics-assisted [and] artificial intelligence-assisted real time matching of loads and empties,”
Larkin has stated that logistics companies will invest enough in blockchain technology to drive the “consolidation of the industry around these core transformational technologies.” According to Larkin, these three companies are UPS, C.H. Robinson Worldwide and XPO Logistics.
“The theory is that the blockchain-enabled supply chain participants will be able to handle transactions more quickly, more securely, with fewer errors and less labor cost involved in the overall process,”
The widespread adoption of blockchain technology throughout the logistics industry could deliver significant benefits to consumers, according to Stifel. Purchased products would arrive faster, at less cost, and in a far more precise manner. Data providers, software companies, and trailer-leasing companies also stand to benefit from blockchain tech, streamlining day-to-day operations.
Larkin has stated, however, that “there are several groups positioned to be totally or partially” disrupted by the introduction of blockchain technology into the logistics industry.
“The potential losers [are those] that choose not to comply with the BiTA industry standard protocols or that choose not to be transparent… blockchain should make transactions more efficient and reduce payment disputes but is still years away.”
UPS has publicly stated that it is joining BiTA as an effort to devise the next evolution of its logistics infrastructure. Shareholder sentiment appears to agree, with UPS shares up 0.3 percent in midday trading Tuesday.