Blockchain in transportation

Impact of Blockchain in Transportation Industry

Blockchain continues to remain a buzzword in technology circles. In the past couple of years, however, it started to find its practical implementation as well. The companies providing Blockchain and the ones incorporating it remained highly successful. Logistics and transportation industry is one of the primary beneficiaries with major players taking part.

This article reveals the ways in which Blockchain in transportation would be very fruitful. Later, it shares some of the notable case studies reflecting the degree of success. The following brief introduction to the technology is optional.

What is Blockchain Technology?

Unlike the widespread belief, Blockchain is not merely the alternative for traditional money transaction schemes. Instead, it is a platform using which businesses can replace the traditional methods of online payments. The replacement of these methods is only a use case of Blockchain. The technology has the potential to entirely redefine transport management for increasing efficiency, reducing operational time, and augmenting the profit margins.

Blockchain uses the concept of distributed ledger. In essence, the information is stored in a series of virtual blocks. Each new block connects to the previous one with a cryptographic hash. Apart from hash, every block contains transaction data along with timestamp to ensure chronological order of chain.

The data stored in blocks is immutable. This implies that the data once updated on a block cannot be changed. Thus, each transaction gets stored in a separate block whose content are not modifiable. SHA-256 is one of the most common hashing schemes.

The immutability feature follows from the fact that the longest blockchain is the most valid one. This longest change rule ensures that any individual trying to fork the chain somewhere in the middle and connecting it to another chain would have smaller resultant chain. Thus, the preference would still be given to longest chain.

Besides, any new chain with same transactional data would still be invalid because the hash ID would not be recognized by rest of the nodes. Therefore, it is practically impossible to tamper the details on blocks making Blockchain technology an impregnable one.

Blockchain in transportation and logistics

Although the possibilities are unbounded when it comes to applying Blockchain in transportation industry, yet following are some of the use cases which have already been proved successful.

Instant Payment Verification

Transaction in cryptocurrency is one of the many use cases of Blockchain. Bitcoin presents an instance. Unlike traditional banking where transactions are monitored centrally, Bitcoin is distributed. Each of the users with transaction records in a chain is able to view each block containing transaction details.

The sender can use blockchain as a proof that transaction was made while receiver can verify if the transaction is valid or not. In contrast, the traditional business method often runs in monetary disputes. Research indicates that up to $140 billion worth of payments disputes hit transportation industry every day.

Apart from verification of transaction, the fault tolerance ability ensures that the Blockchain never goes down. If one of the nodes with access to Blockchain is unavailable, the blocks are still accessible from rest of the nodes. The only way that a payment remains unverified at a given time would be the event where each node goes down, which is close to impossible.

Smart Contracts with Blockchain

It takes days and, at times, months to complete payments and the associated paper work in a transaction. Companies have to involve third party contractors who act as middlemen in streamlining the transaction process. The cost of operations surges further when acquire these middlemen.

Smart contracts eliminate the requirement to keep third parties and automate the process of payments. Both parties including sender and receiver prefix the terms for transaction and program the Blockchain in such a way that payments are performed as soon as receiving party receives the shipment.

Smart contracts are successful because both parties have an increased level of trust through this transparent transaction scheme. Each operation progresses instantaneously since immutable ledger denies any tampering and, hence completing the task without delays at any point.

Goods Tracking

One of the most crucial applications of Blockchain technology in transportation is the ability that it provides to track goods. In a traditional setting, counterfeiting of products is very common because retailers and end users are unable to verify the authenticity of items. Drug counterfeiting alone is inflicting a loss of over $200 billion annually to pharmaceutical industry.

Research reveals that 3.16% of total drugs produced are counterfeited resulting in substandard products. Furthermore, the reports from Asia, are more alarming with India alone having 25% of counterfeited drugs.
The application of Blockchain allows retailers and users to verify the origin of a drug. Since the original manufacturer develops its unique hash, the regulators can identify if a product belongs to original manufacturer or not.

Food safety is one of the chief concerns in the world today. The United States alone suffers $15.6 billion loss due to foodborne diseases. Like drugs, Blockchain helps consumers in tracing the origin of three meals they take each day.

Also Read: Application of Blockchain Technology in Healthcare

Inefficiency in Load Management

One of the biggest challenges in trucking industry is to make the appropriate number of trucks available for distribution of goods. Fleet owners are frequently running into losses as most of the space remains empty in some trucks whereas others run out of space. As per American trucking Association, 90 percent of the worldwide trucking companies have six trucks or fewer. This problem results in either empty or partially-filled containers of trucks.

Blockchain can resolve this challenge by creating an excessive amount of trust among carriers and shippers. Besides, the trucking companies can collaborate with each other as well to develop a mutually beneficial relationship. The growing number of members of Blockchain in Transport Alliance (BiTA) is a highly encouraging factor and reflects that Blockchain will have a crucial say in future trucking.

Notable Case Studies for Blockchain in Transportation Industry

Although Blockchain is still in its rudimentary stages, yet a number of companies of all sizes is starting to implement the technology. Three of the most notable case studies are as under.


In collaboration with IBM, Walmart is revolutionizing its supply chain management. The retail giant made essential for its suppliers to push each transactions on Blockchain. This practice creates an incredible amount of transparency, enabling consumers to verify the origin of each purchased item.

Previously, the company had to wait for seven days to verify the origin in case any doubt occurred regarding the authenticity of a retail product. In one such events where unhygienic lettuce resulted in a disease outbreak, the subsequent investigation took months before experts could trace the origin of problem. The incorporation of Blockchain reduced the time significantly to only 2.2 seconds.


This Blockchain solution developed by IBM in collaboration with Maersk – world’s leading shipping company – is providing a transaction platform for shippers and carriers. According to Maersk official reports, more than 100 supply chain operators are using this platform.

This Blockchain platform is one of its types and its success indicates that such solutions offer huge business opportunities. TradeLens is currently inviting large-scale shippers. Any investment in Blockchain for small scale businesses would be highly effective.


It is a collaboration of five banks with a technological support from IBM resulting in a revamp of global trade finance. Batavia enables an automated and highly transparent transaction records for transportation through land, air, and sea routes. Besides assisting business owners and banks, Batavia is also helping insurance agents, operators, and consumers in eliminating the tedious and time consuming paper work.

What are you trying to accomplish?

Do you wish to take the leverage of Blockchain for your business? Is there a Blockchain-based startup idea in your mind? Mob Inspire is helping entrepreneurs in establishing startups for over a decade. Besides, our experts assist businesses in restructuring their corporate architecture, mobility, and tech infrastructure. Contact us today with your business problem and we will assist you in effectively solving it.