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Transportation leaders today are faced with increasing buyer delivery demands, capacity challenges, government regulations, fluctuating rate markets and the overall digitization of supply chains. At the same time, they are pressured with managing day-to-day transportation processes, usually without specialized staff or an adequate number of internal resources, while trying to control or reduce transportation costs.

Many transportation leaders utilize freight brokers and logistics service providers to help them manage their transportation operations and access a network of providers. But transportation managers are increasingly hungry to take their logistics operations to the next level. They are looking for more consultative partnerships rather than transactional relationships in search of additional value-add. They’re looking for solutions that consider the unique nuances of their business, products and customers; solutions that drive efficiency and control costs, especially in today’s dynamic logistics market.

That’s where managed transportation services come into play.

Transactional Services vs. Managed Transportation Services

At a high level, managed transportation services include the outsourcing of all or part of a company’s internal logistics operations throughout the order-to-cash lifecycle. The typical asset-based or transactional-based logistics services provider relationship consists of a planner at the shipper telling the provider the mode, lane, and details about the shipment in search of cost or service fulfillment, then the provider executes that shipment.

In a managed transportation arrangement, the shipper’s planners are employed by the logistics services provider, who receives a feed or download of shipments from a shipper’s enterprise systems, performs all planning – rating, sourcing, consolidation, optimization, etc. – and then executes the loads.

Managed transportation service utilizes a consultative approach beginning with an in-depth discovery process and needs analysis to identify client business goals and define success measurement benchmarks. Based on a company’s specific supply chain needs, a customized transportation roadmap and design is developed, then executed by the logistics services provider. All operations – from rate negotiation to freight payment and auditing are outsourced to the logistics provider.

From the technology perspective, the foundation of a successfully managed transportation relationship is the integration of all applicable business systems based on client requirements, including ERP, WMS, order management and more. The higher the level of integration, the greater the opportunity for a logistics service provider to reduce a company’s manual efforts and increase their efficiency.

Managed transportation technology services include the combination of a leading edge TMS and business analytics to provide client stakeholders with a pulse on their business (i.e. KPI’s, self-service and custom reporting, heat maps, etc.). Additional optimization tools for network analysis and design are used to look at Macro level supply chain opportunities.

Managed transportation is truly an integration of people, processes and technology dedicated to shippers’ specific supply chain needs.

Consultative Relationship

With managed transportation services, a team of consultants will get to know your business from all aspects. They configure solutions to reflect your growth path or specific needs.

When one of the largest telecom providers asked GlobalTranz to help them transform their logistics function from a decentralized model to a centralized model, we helped them understand the current state of their supply chain and developed a customized multi-year roadmap toward a centralized function.

A true consultative managed transportation partner won’t pull a solution off the shelf or stuff your business into a box. They’ll develop custom solutions based on the maturity of your company’s supply chain function, freight spend, headcount, volumes, business goals and other considerations specific to your business. It’s truly a mutually beneficial partnership.

Look Beyond Rates

Given the tight capacity and rising rates in today’s market, it’s no wonder that shippers are looking for any way to drive down costs. Shippers are starting to realize they can’t buy transportation based on rates alone. Managed transportation services help drive efficiencies and best practices into supply chains to reduce costs over the long term.

Managed Transportation Services combined with advanced TMS technology help shippers make their logistics operations a competitive advantage. Shippers can utilize managed transportation partners for strategic planning, such as determining if their hub and spoke distribution model works, the most efficient location for a new distribution facility or where to source products based on total landed cost.

Do You Need Managed Transportation?

Growing complexity in the supply chain demands innovative and consultative approaches to logistics management. If you are a transportation leader looking to drive cost savings, efficiency and visibility, focus on your core competencies rather than logistics operations, and leverage logistics as a competitive advantage, it’s time to consider managed transportation services.

Learn how Managed Transportation services can drive overall cost savings and efficiency into your supply chain. Request a logistics and freight needs analysis: Call 855-444-6608 orContact Us.

As we’ve shared with you in a recent article, today’s freight landscape has been transformed into a carrier’s market. For the first time in many years, drivers and carriers find themselves in a position to choose which shippers they most want to work with, giving rise to the shipper of choice environment.

According to JOC.com (The Journal of Commerce), many carriers and drivers are collecting data that helps identify inefficiencies with shippers across the country. “Shippers might be surprised by how much data their trucking suppliers have on them: enough to pinpoint problems at specific docks across the country. That directly affects both the price of trucking for those shippers and whether they get a truck at all,” noted a recent article.

Driver feedback is being collected by both large and small carriers to monitor shipper inefficiencies and issues. To stay on the best terms with your carriers, shippers should be more vigilant than ever when managing dock operations and promoting driver accommodation.

Using a TMS to be a Shipper of Choice

Technology has become a perfect enabler to help shippers create more efficient collaboration with carriers. Here are 5 ways shippers can use an advanced TMS to become a preferred shipper.

  1. Faster payments – It’s important to pay your carriers quickly and accurately. Freightwaves.com suggests the best way to accomplish this is by using a TMS that integrates clean data between carriers and shippers. A strong TMS integration helps shippers and carriers quickly identify and resolve rate discrepancies and makes the payment process accurate and efficient for both parties.
  2. Integrated systems – Using EDI and APIs available through advanced TMS products, you can connect your systems with carriers to automate communication and eliminate the need to manually email and call back-and-forth for load updates, tracking and more. You’ll become easy to work with and drive operational efficiencies with carriers and drivers.
  3. Go paperless – For any given shipment, several pieces of paperwork are required. Using a TMS, you can eliminate the need to push paper back and forth and reduce manual entry for the carrier (and your company). According to a recent JOC.com article, 75% of LTL business is still done using paper BOLs, but moving to digital BOLs can greatly impact costs and efficiency for both carriers and shippers.
  4. Advanced appointment schedulingAdvanced TMS systems allow you to set-up facility hours so you only schedule pick-up and delivery only during warehouse operating times. This helps eliminate driver downtime and wasted time waiting at a loading dock.
  5. Use data to improve operations –  The best TMS products have business intelligence tools to help you identify trends and make decisions based on the data from all your shipments. A TMS shows you where the bottlenecks are occurring throughout your network, including accessorial charges, claim reports, detention time, and more, and enables you to make operational changes to better accommodate carriers. 

Read more tips for becoming a shipper of choice.

Looking for a TMS vendor that can position you as a shipper of choice? Call 866-275-1407 orGet a demo.

Companies are putting more emphasis on logistics due to the impact it has on customer loyalty and earnings. At the same time, logistics costs are increasing and transportation management is becoming more complex, digitized and fast-paced.

To combat these complexities, companies are looking for logistics service providers that do more than simply book shipments and take orders. 3PLs that are solution-focused and can solve logistics challenges are pivotal to adding value to a company’s supply chain.

What to Expect from a Solutions-Focused 3PL

Solutions-focused 3PLs move businesses beyond freight transactions, helping them evolve and think strategically about logistics and transportation management. The difference between a transactional and solutions-focused 3PL is like vacation planning. If you’re taking a week-long vacation to Disney World, do you show up at the entrance your first day to buy tickets and book a hotel room, or do you plan in advance to secure the best prices and terms?

The same goes for logistics and freight. If you buy at the last minute, you’re paying a premium on the spot market. Thinking long-term and holistically helps you predict demand so you can secure cost-effective contracts at competitive rates. Solutions-focused 3PLs help you plan, strategize and purchase your transportation in a consultative, collaborative and data-driven way.

A solutions-focused 3PL will provide the following value-added services:

We encourage you to look beyond your freight planning as a series of independent transactions to a well-thought strategy, which will help you become more efficient, improve performance and save money.

Learn how a solution-focused 3PL can drive overall cost savings and efficiency into your supply chain. Request a logistics and freight needs analysis: call 855-444-6608 or contact us.

Did you know that paperwork—bills of lading, certificates of origin, invoices and insurance policies—accompanying most large shipments of goods, accounts for one-fifth of the total transportation costs? Imagine if you could do away with paperwork by digitizing the information and “beaming” it into the cloud where all involved parties could access it any time.

That’s the promise of the blockchain, a technology we’re investing in at GlobalTranz. Wired magazine notes supply chain and logistics transaction documentation to be “one of the potentially most compelling use cases for blockchain technology.” A plethora of startups—as well as major companies like IBM and Walmart—are betting that the technology will change the way goods travel around the world.

A recent Wired magazine article follows the path of a container of avocados from India to the Netherlands that “involves dozens of people and businesses.” In this scenario, reports Wired, “Farmers need to drop off the avocados, boats need to pick them up, regulators need to sign off on the container’s contents, and someone needs to make sure that the fruits haven’t gone bad. Most of these handoffs and communications are still done via analog technology.”

Up to 30 different parties are involved in shipping this one container of avocados. Blockchain technology can digitize the stacks of paperwork that accompany supply chain transactions and push it all to the cloud, where key information is visible to stakeholders within the supply chain. Notes Wired, “That system might live inside a mobile app, and involve other tech, like QR codes, cameras, RFID chips, or internet-connected sensors.”

Smart Contracts and Proving Provenance

The blockchain is a distributed ledger that digitally records transaction history between parties. Information gets stored in blocks of data that are “chained” together. Each data block added to a chain is digitally unique and encrypted with a date/time stamp and key, which makes it unalterable. Information in a blockchain can’t be hacked or counterfeited and is immediately “trusted,” and therefore, accepted by anyone with access to the related blockchain.

This essential trust element is what makes blockchain technology ideal for executing what is known as “smart contracts.” For example, notes Wired, “When that shipment of avocados reaches the port in Amsterdam, it could automatically trigger a payment to the shipper back in India. Smart contracts could also be used to handle the required paperwork since they’re more secure than an emailed PDF and cannot be easily manipulated.” Smart contracts can be enormous time and money savers.

Blockchain tech can also detect fraud and help shippers guarantee the provenance, or authenticity of products. Provenance ensures that every shipped good includes a digital “passport” that proves its authenticity. These so-called passports include essential data such as where and when the product was manufactured and what steps it took throughout its journey.

Future Blockchain Standards Are Essential

Blockchain technology has the potential to drive efficiency, visibility and cost savings into supply chain and logistics management, but full-scale adoption is only possible if we have standards.

Today, BiTA (Blockchain in Transport Alliance) is the vanguard leading blockchain standards creation in the transportation and logistics industry. BiTA is actively working with its members (GlobalTranz is a founding member) investigating use cases and developing a common framework for which the logistics industry can build revolutionary blockchain applications.

Read the complete Wired article for more insights into how blockchain technology will help transform logistics.

Learn more about Blockchain in Logistics.

Deep learning, machine learning and AI

Technologies such as deep learning and artificial intelligence are quickly transforming entire industries, including logistics. Consulting firm McKinsey even says deep learning could one day become “the secret sauce in many different business processes.”

A recent article from the Financial Times shines a light on deep learning, a technology that offers tremendous potential for supply chains and manufacturing. The term itself “refers to the use of artificial neural networks to carry out a form of advanced pattern recognition. Algorithms are trained on large amounts of data, then applied to fresh data that is to be analyzed,” says Richard Waters, the article’s author.

Think of deep learning as a subset of machine learning—a technology GlobalTranz employs within its TMS and other supply chain systems. According to Forbes, “Machine learning takes some of the core ideas of artificial intelligence (AI) and focuses them on solving real-world problems with neural networks designed to mimic our decision-making. Deep Learning focuses even more narrowly on a subset of machine learning tools and techniques, and applies them to solving just about any problem which requires ‘thought’ – human or artificial.”

The Power of Deep Learning in Logistics

One of the most common applications of deep learning and machine learning is an area called predictive analytics. Within the GlobalTranz TMS, deep learning technology is used to help shippers make better decisions. For example, if you’re looking at lane planning, a traditional analytical model would look at a fixed set of assumptions. Analytics based on deep learning can consider dynamic attributes like weather or traffic and self-evolve over time to recognize patterns that humans would not see.

We also use deep learning to help companies track financial forecasts, pace and flow of production, and order processing. These data points, combined with insights into carrier capacity and performance, allow companies to answer questions like, “How many more orders can we service within budget for a given set of lanes? Or how much can we increase manufacturing without going over our freight budget?”

In other areas of the supply chain, experts see more uses of deep learning in: “predictive equipment maintenance, yield optimization, procurement analytics and inventory optimization,” says Mr. Walters, Wired Magazine author.

Companies that are quick to adopt deep learning technologies could also reap gains in value. McKinsey says, “Depending on the industry, the value a company could gain from applying this technology could range from one to nine percent of revenues.”

How Can You Get Involved Without Spending a Fortune?

The good news is for you to take advantage of these emerging, cutting-edge tools, you don’t have to buy the technology. Instead, partner with a 3PL that owns a robust TMS with integrated deep learning and machine learning capabilities. GlobalTranz’s TMS gives users the capabilities they need to employ this nascent technology and deliver more informed suggestions that help automate logistics decisions and drive supply chain efficiency.

 

Learn how you can start using machine learning and deep learning technology in your logistics operations, call 866-275-1407 or Request a TMS Demo.

In today’s capacity environment, shippers are competing against one another to book an available truck at a reasonable rate. Carriers have the choice to haul loads that are the most lucrative for their business and keep them within legal limits of HOS rules. Due to time constraints, on a given day, drivers may be forced to choose between two stops:

Stop A

A warehouse with efficient dock operations and wait times under 15 minutes. Dock attendants are always courteous and welcoming and there is an air-conditioned waiting area with clean restrooms and well-stocked vending machines. Pallets for pick up are adequately packed, protected, and stackable within a carrier’s network.

Stop B

A warehouse with appointment only pick up operations. Drivers are often delayed here for 1-2 hours and the company’s break-room and facilities are off-limits to non-employees.

If you were a driver, which stop would you choose to be the most productive? Stop A or Stop B?

It’s a Carrier’s Market

Welcome to the era of the carrier’s market. For the first time in many years, drivers and carriers find themselves in a position to choose which shippers they most want to work with, giving rise to the so-called shipper of choice environment. Shippers who provide better experiences for carriers could reap long-term benefits in the form of higher service levels, fewer claims, and better rates.

The following are five ideas you could employ immediately to help transform your company into a shipper of choice.

  1. Don’t Waste the Carrier’s Time

Time is money, and in today’s reality of fewer drivers, ELDs and tighter HOS rules, if a truck isn’t moving, it’s not making money.

Consider these guidelines

  1. Be Courteous and Accommodating to Drivers

Ensure that your facility’s employees are treating drivers and carrier employees with respect. If a driver only has room for one more pickup at the end of the day but has two options to choose from, they will likely choose a shipper who is easier to do business with.

Another way of showing your respect for drivers is providing them with break areas at your facilities where they can wait comfortably, get a snack or coffee, and use the restroom while their truck is being loaded.

  1. Package Shipments Properly

Proper packaging is critical to preventing cargo damage and making your freight stowable within a carrier’s network. Consider packing shipments with foam peanuts, using wooden crates, adding corners to pallets and wrapping pallets in plastic to better protect freight in transit.

Organize your pallets so they can be stacked, allowing the carrier to maximize its trailer space. Standard size pallets (48”x40”, 42”x42”, 48”x48”) that can be stacked or racked are the most sought-after freight. Keep your freight below 50 inches in height and avoid non-stack stickers, placing cones on top of pallets and overhanging items.

  1. Plan Ahead—Consolidate Pickups

One of the most significant costs for carriers is driving to your facility and waiting to get loaded. Naturally, the cost to pick up one shipment is the same as the carrier’s cost to pick up three or four loads, except they’re earning revenue from multiple loads instead of one.

If you know you’re going to have multiple loads that must be picked up on a given day, it’s more efficient for you, and the carrier, to stage those loads to go on a single carrier instead of separate carriers. When you combine your loads for one carrier, you reduce wait times, dock doors required for loading, and the risk of loading freight into the wrong trailer.

  1. Pay Freight Bills on Time

It’s important to pay carriers quickly and accurately. Freightwaves.com suggests the best way to accomplish this is using a TMS that integrates clean data between carriers and shippers. A strong TMS integration helps shippers and carriers quickly identify and resolve rate discrepancies and makes the payment process efficient for both parties.

 

For more information on becoming a shipper of choice, call 866-275-1407 or Contact Us

Truck loading at dock.

If you’re a shipper, carrier or logistics company, it’s been impossible to ignore the news about the industry’s ELD mandate (Electronic Logging Device), which went into effect late last year. April 2018 was the first official month where carriers could be fined, ticketed or put out of service for non-compliance. We first covered the emergent ELD mandate in an article that appeared on the GlobalTranz blog last December.

In that first article—”Top 5 Questions Shippers Have About the ELD Mandate”— we addressed the sources of angst many shippers were having with the new regulation.

What’s been the impact of the first 45 days of working under these new, more restrictive guidelines? What’s been the impact on rates and transit times?

Here’s what we found:

Working in the New ELD Mandate Environment

Before the ELD mandate went into effect, industry analysts and insiders were mostly pessimistic in their predictions of how it would impact shipping rates, freight capacity, transit times and more. While a few analysts warned of the end of the trucking world as we know it, most others predicted modest rate increases and longer transits which would affect delivery times, resulting in disruptive supply chains.

ELD Compliance

Prior to the ELD mandate going live, there was industry-wide speculation that we could see about a seven percent decline in the for-hire carrier sector. However, according to recent survey results from the website Carrierlists.com, compliance is averaging a high 97 percent. It appears the highest compliancy standings have been reported by super-regional carriers (1000+ miles, but not nationwide). Additionally, we’ve witnessed fewer carriers than anticipated leave the marketplace due to ELDs—an effect we attribute to a strong freight economy and high per-mile rates. While carriers may be putting fewer daily miles on their assets due to ELDs, the declines are offset by channeling loads toward shippers who are easy to work with and are advantageous for their operations and business.

Transit Times

Depending on lanes and distance traveled, transit times are increasing amongst most carriers, an early prediction that has mostly come true. With the ELD mandate in place, drivers can no longer alter logbooks, which helped some exceed government-regulated daily driving limits. We are advising our customers that many borderline lanes of 450 miles or longer—previously one-day trips—are now turning into two-day transits. For drivers, shorter work days has resulted in a 3-10 percent reduction of time on the road, according to DC Velocity. That’s also why some drivers are less inclined to take on the longer hauls of 650-750 miles per day. DC Velocity also notes that driver reticence to haul these loads is keeping supply tight, which is resulting in a “significant amount of price inflation.”

Freight Rates

At the end of last year, most carriers and 3PLs were predicting an across the board 5-10 percent rate increase. Depending on the lanes and where you are shipping in the country, rate increases could be more. Our advice is to be prepared for potential rate increases and budget accordingly so that your logistics teams aren’t surprised. It’s suggested to become more familiar with spot market costs, as dedicated capacity may start to diminish during the peak shipping seasons.  Rate increases and capacity constraints aren’t coming from the ELD mandate alone. Factors such as the driver shortage, high freight demand due to the growing economy combined with the ELD mandate are conspiring to keep rates higher.

Why You Need to Become a “Shipper of Choice”

In today’s capacity environment, carriers have the luxury of choosing to haul loads that are the most lucrative for them, which means you must eliminate the inefficiencies in your supply chain operations. When you do this, you’ll move closer to becoming the kind of customer carriers love to work with: the so-called shippers of choice.

Here are five tips to get started on your path to becoming a shipper of choice:

  1. Ample Parking—It may sound basic but having enough parking for trailers at your loading docks and warehouses means drivers don’t have to waste time finding a place to park if they are waiting to unload or pick up. The quicker drivers can get back on the road the better.
  2. First-Come, First-Serve—Drivers prefer flexibility when dropping off shipments; they also like smooth-running shipping and receiving operations. Avoid by “appointment only” warehouse and loading dock policies. Given a choice of appointment-only destinations and first-come, first serve (FCFS), carriers prefer the latter. With tighter restrictions on hours of service, drivers need the flexibility to plan their routes to lawfully comply with the ELD mandate. FCFS loading and unloading policies give drivers more flexibility when planning their days.
  3. Avoid Detention Fees—Avoid making your carriers wait too long. As a general rule, when carriers wait over two hours you will accrue detention fees and could potentially be flagged as a shipper to avoid due to inefficient dock operations. Make every effort to streamline your operations to minimize wait times for drivers.
  4. Allow Drop Trailers—If drivers have the flexibility to drop off trailers vs. waiting to load or unload, you increase productivity for carriers, which in turn helps keep your freight costs down. Drivers can also be exposed to wasteful waiting time due to shippers spending time locating an available dock. Structuring smooth facility operations is important to once again minimize wait time for drivers.
  5. Provide a 48-Hour Lead-Time—When you give your logistics suppliers a 48-hour lead time they will have more time to find the best carrier for your shipment at a competitive rate. Less than 48-hour lead time pushes most providers to source for available capacity within the current spot market rather than dedicated markets. Spot markets typically will yield higher freight costs from carriers due to the volatile level of demand in that particular timeframe.  It is important to provide as much lead time as possible to your provider in an effort to reduce freight costs.

Stay tuned for next week’s blog where we will discuss becoming a shipper of choice in greater detail.

Learn more about becoming a shipper of choice and driving efficiencies into your supply chain. Call 866.275.1407 or Contact Us. 

This is part II of our series on how blockchain technology will impact the supply chain and logistics industry.  In Part I, we talked about how blockchain technology can solve logistics inefficiencies and shed light on how it works.  Today we’re discussing 10 benefits and use cases for blockchain in logistics, and how the logistics industry will advance this technology for widespread adoption. 

10 Benefits of Blockchain in Logistics

 

1. Monitors Performance History

Monitoring the performance history of carriers and other suppliers through a blockchain framework allows parties to see evidence of past performance, including on-time deliveries, on-time pickups and more.

2. Maintains History of High-Value Assets

Having a trustless and accurate record of asset history is imperative to ensure it complies with safety standards from factory floor to delivery.

3. Improves Quality Assurance

Every authorized member involved in a transaction can access critical data to validate its milestones. Evaluating freight at pick-up and delivery locations reduces unsubstantiated disputes.

4. Improves Compliance

Blockchain and ELDs (electronic logging devices) are a natural pair. ELDs can send a stream of driver behavior and route data to a blockchain in real-time. Pairing this information with traffic data and weather data gives carriers and shippers a tool to improve routing.

5. Monitors Real-time Freight Capacity

In trucking, available capacity can change by the hour. Through blockchain transparency, you will know when and where capacity opens up.

6. Improves Payments and Pricing Processes

Payment processing and settlement is secure in a blockchain, and transaction information is easily accessible. Shippers will have more data to determine rates.

7. Detects Fraud

Every transaction that takes place on a blockchain is visible to everyone on the network. Nothing can be removed without it being detected. This transparency obviates the areas where fraud occurs, such as double brokering. Through the common practice of notarization and nonrepudiation, shippers can securely track the creation and modification time of a document or transaction—confirming authenticity.

8. Prevents Theft

A blockchain can contain detailed information and rules, such as photo IDs and rules for the pick-up and delivery of freight. These added precautions will improve security and reduce the possibility of freight theft. A blockchain also enables the secure transfer of titles for what are known as smart properties.

9. Proves Provenance

Provenance ensures that every shipped good includes a digital “passport” that proves its authenticity. These so-called passports include essential data such as where and when was the product manufactured and what steps it took throughout its journey.

10. Allows You to Issue Smart Contracts

The ability to issue smart contracts is considered by many to be the Holy Grail of blockchain technology. Smart contracts are enormous time and money savers. Says Entrepreneur, “With smart contracts, agreements can be automatically validated, signed and enforced through a blockchain construct—eliminating the need for mediators and therefore saves the company time and money.”

Barriers to Widespread Blockchain Adoption

Despite a large number of industries impacted by blockchain advances, there exists a handful of concerns that are slowing the technology’s widespread adoption. Here are four common barriers:

To Advance Blockchain Technology We Need Standards

The experts agree that one factor necessary for the advancement of blockchain technology within the logistics industry is the creation of standards. Today, BiTA is the vanguard of the movement leading blockchain standards creation in the transportation and logistics industry.

The drive to enact worldwide blockchain standards brings to mind the creation of another set of standards that transformed an industry in the 1960s. EDI (electronic data interchange) standards developed by the U.S. transportation industry laid the foundation for secure communication between different computer systems. The EDI standards would eventually transform how banks communicate with retailers—a platform that allowed for the quick and simple exchange of data.

With thousands of companies eager to develop and promote blockchain technology in logistics, BiTA is investigating use cases and developing a common framework for which the industry can build revolutionary blockchain applications. In May 2018 BiTA will hold its Spring Symposium (BiTA’s first symposium occurred November 2017) where members will discuss how the organization will develop and implement blockchain standards.

While it’s difficult to predict exactly when the logistics industry will experience wide-scale blockchain adoption, in the meantime, you can help by getting involved and watching for opportunities to pilot programs within your logistics operations and supply chains.

White Paper: Introduction to Blockchain Technology in Logistics

Blockchain, which first entered our lexicon with the arrival of cryptocurrencies like Bitcoin in 2008, is now a technology that promises to transform entire industries.

Blockchain technology is considered by many to have as much potential as AI (artificial intelligence), which is competing for research and investment dollars. Private and public companies, colleges and universities, and government agencies are all working quickly to leverage blockchain technology’s potential.

For the logistics industry, blockchain is promising to create transparency of all documents and transactions across the freight landscape, ultimately increasing the efficiency, agility and innovation of supply chains.

In a two-part article, we examine how blockchain technology can solve logistics inefficiencies, shed light on its many benefits and share real-world examples of how it’s already impacting businesses like yours.

Blockchain Can Solve Logistics Inefficiencies

Every day, shippers, carriers, brokers and other logistics professionals must navigate a plethora of options and “what if” scenarios when sending a truckload of goods across the country, all while documenting each step of the journey with detailed paperwork. The current process of moving goods from origin to destination is complex and lacking a single source of truth to store and track all transactions and constituents involved.

Blockchain technology is particularly adept at simplifying complex and fragmented processes— like those that are commonly found within the logistics and supply chain industry. Blockchain technology records transactions, tracks assets and creates a transparent and efficient system for managing all documents involved in the logistics process.

How Blockchain Technology Works

How Blockchain in Logistics Works

Blockchain is a distributed ledger that digitally records transaction history between parties. Information gets stored in blocks of data that are “chained” together. Each data block added to a chain is date stamped, unique and encrypted, which makes it unalterable. Information in a blockchain can’t be hacked or counterfeited and is immediately “trusted,” and therefore, accepted by anyone with access to your chain. 

Blockchain technology helps companies implement smart contracts—computer code hosted on a blockchain that defines and executes the terms of an agreement between parties.

In the typical scenario of shipping goods, numerous parties are involved—shippers, 3PLs, carriers and consignees. For every shipment, transactions and documents get executed and saved—BOLs (bills of lading), invoices, PODs (proof of delivery) and more. Each transaction becomes a permanent ledger record that’s easily validated by anyone with access to the chain. Using data from a blockchain, the network members can validate the block or payload of the transaction, creating a transparent and efficient system for managing all documents and transactions involved in the logistics and supply chain process.

In Part 2 of our blockchain in logistics series, we’ll discuss 10 benefits and share real-world examples of how it’s already impacting businesses like yours.