Stay connected
Subscribe to our fleet blog and follow us on social media to receive all our fuel and energy industry insights.
"*" indicates required fields
Fleet
Fleet Managers Catching Up to the Age of Cryptocurrency
In an age of virtual reality, robots and cryptocurrency, fleet managers – look alive!
It is 2017, and everyday chores like cleaning floors (Roomba), prompting the time or the weather (Amazon Echo or Google Assistant) and paying back a friend for picking up brunch over the weekend (Venmo or Paypal) have been made simpler by new technology. Even the trucking industry and fleet managers across the nation are utilizing technology to record a driver’s record of duty through the mandated ELD. These same companies are also endorsing virtual payment solutions like fleet cards and fuel cards as a critical aspect of their business payment systems. We are living in a world where the fundamentals of virtual reality are enhancing business, and it is becoming apparent to many that virtual cards are just the beginning, and cryptocurrency is on the rise.
In the fast-paced world that we are living, electronic payments are not only the norm, they are critical, and although we may dismiss digital currency as a viable payment solution, many businesses recognize it as real and viable progress. As the name suggests, digital currency is money that has no physical properties. Because it is not a bank note or coin, it allows for instantaneous transactions and broad, borderless transfer-of-ownership. These currencies can be based on centralized systems like banks or they can be restricted to use in smaller environments like on-line gaming or social networks. As well as use for payment, digital currency can also be transferred, stored or traded electronically. In fact, current headlines are indicating that the price of Bitcoin, the most publicly recognized digital currency, could exceed $100,000 before the end of 2018. But let’s back up a bit to gain a better understanding of how Bitcoin works and how the underlying function is having a dramatic effect on the trucking industry’s payment systems and non-financial transactions.
Bitcoin is a cryptocurrency and worldwide payment system.
Developed in 2009, it is the first decentralized digital currency, working without a centralized bank or single administrator. The Bitcoin network is peer to peer where transactions take place through the use of cryptography – secure and confidential communications and data. The system is run by a decentralized network of computers around the world that keep track of all Bitcoin transactions, similar to the way Wikipedia is maintained by a decentralized network of writers and editors. The record of all Bitcoin transactions that these computers are constantly updating is known as the blockchain. The blockchain database can attain independent verification of the chain of ownership of any Bitcoin amount. It is this blockchain technology that is driving change in financial systems and protocols for the trucking industry and the world.
For fleet managers, Blockchain technology can speed up an already fast paced industry by making financial transactions and electronic payments faster and more efficient through secure data transfers while eliminating multiple intermediaries that usually exist within a single transaction.
Blockchain can also be more efficient where cost is concerned. There are not always transaction fees for using the blockchain network, unless that blockchain code has been secured for specific use, and even then, it can be much more efficient than a centralized system. The most prominent aspect and benefit of blockchain is the peer to peer system used to capture details and communications in real time. It is a platform that will allow industries to share even non-financial information with customers and vendors alike.
Mauricio Paredes, Vice President of Technology for PS Logistics, is an early adopter of blockchain in the trucking industry.
“Through blockchain technology every transaction in the trucking ecosystem can be interconnected, providing the potential to dramatically change workflows and the way people do business for the better,” he says.”
Fuller is responsible for creating a non-profit organization with a mission to educate its members and develop common standards for blockchain applications. Blockchain in Trucking Alliance (BiTA), was developed specifically to help members benefit from working together as a network. Some of the industry blockchain benefits include:
- Efficiently and securely update a digital bill of lading
- Verify transactions as they occur to eliminate disputes on late delivery
- Eliminate the amount of effort and manpower that goes into reconciling events
- Immediate electronic payment to drivers upon delivery
- Transparent and verifiable maintenance records
- Immediate and self-executing payment for things like fuel and parts
- More efficient and fair processes for disputes and arbitrage over freight quality and claims
- Immutable carrier history and safety records
- With a common network, carriers can bring together capacity to compete against the likes of Uber Freight
Fuller predicts blockchain will become a predominant technology in the trucking industry within a decade, and already 60 companies have applied to be members of BiTA. So, while the trucking industry is perceived as behind the curve on adopting new technology, BiTA is on a mission to educate stakeholder in the transportation and logistics community by continuing the dialogue and encouraging its membership to engage in the benefits especially where transportation, finance and technology is concerned. Fuller sees the blockchain as the bridge from analog to digital, and if he is right, the trucking industry will align with the national movement where Deloitte predicts 10% of the global GDP will be stored on blockchain platforms by 2025.
While it is clear that even though Bitcoin may not be a recognized currency in the trucking industry, the foundation that has driven its success is. Blockchain will not only help in developing robust fleet payment solutions, fueling technology and virtual cards, it will help to establish standards and create unity within a seemingly isolated sector by building networks that are much more than just financial. If Fuller is successful in his mission with BiTA, the trucking industry will not only catch up with technology, they will join the global community in its success.
Resources: