Source: Crypto Slate
How Blockchain Can Help Fix the Trucking Industry
The U.S. trucking industry generated over $676 billion in revenue in 2017, moving about 70% of the nation’s entire domestic freight tonnage. The American Trucking Association predicts that the industry will only continue to grow, with freight volume increasing about 3% annually for the next five years.
But as freight demand expands, ATA and other industry voices have wondered if current U.S. trucking infrastructure can handle the task ahead. Bob Costello, chief economist for ATA observed to Trucks.com:
“That’s going to be our challenge, to figure out how to move all of this freight [under the current infrastructure].”
Fr8 Network is providing solutions to the freight industry’s most pressing challenges. They’re doing it with the help of blockchain, a technology that’s already used by companies such as Walmart or Farmatrust to build sophisticated supply chain management tools.
Ending Empty Miles
The trucking industry is notoriously fragmented.
ATA reports that 97% of trucking companies own fewer than 20 trucks, and nearly 91% operate six or fewer trucks.
Empty miles result when small firms or one-truck owner/operators miss out on opportunities to carry tonnage on all legs of their trip.
The Fr8 Board is a unique platform to help carriers eliminate empty miles. Drivers and shippers create profiles and enter information about their available capacity or shipping needs.
Fr8’s bi-directional matching engine allows carriers to find shipments for each part of their trip. A user rating system helps users find trustworthy partners. CEO Jon Fox explains:
Truckers who have excellent behavior, who deliver on time, pick up on time, without damage and do what they say, they’re going to achieve a better rating, and they’re going to get a better deal flow and be able to charge higher prices because they’re behaving well.
— Fr8 Network (@fr8network) March 22, 2018
Bringing Technology Up-to-Date
A recent study on third-party logistics management found that while 30% of industry members and 16% of carriers see potential in blockchain applications. Fr8 uses blockchain as an integral part of providing a more efficient freight technological platform.
Users must buy into the Fr8 Board with Fr8 tokens. When a shipper and carrier connect, smart contracts record the agreement in blockchain ledger and automatically place Fr8 tokens in escrow.
The tokens stay in escrow until the contract is satisfied and the shipper receives remittance. Blockchain technology (with the help of user-generated ratings) renders remote agreements made on the Fr8 Network trustworthy.
Other technological advancements are built into the Fr8 Network platform. For example, smart contracts for tokens will be integrated with IoT shipping devices to automatically log distance traveled, freight temperature, and other essential data. This service will also fulfill federal electronic logging device requirements.
As Fr8 expands, it plans to offer more and more developer-created applications and value-added technological services.
Tackling the Talent Shortage
The trucking industry currently experiences a talent shortage, and things will only get worse as capacity needs expand. ATA estimates that the trucker shortage could reach 175,000 vacancies if trends continue through 2024.
Fr8 Network is making the industry more efficient, which means the logistics world can handle more capacity per driver.
In addition, they are also making truck driving a more appealing sector to enter to newcomers – empty miles are dangerous (trucks are far more likely to get involved in crashes when empty) and generate economic hardship for owner/operators.
By creating a more functional work environment, Fr8 Network will attract more drivers to the profession. The median truck driver age is 49 for long-haul operations and 52 for private fleets. This industry will need to draw younger employees to continue thriving a decade or two from now.
AI trucks could supplement the existing workforce to help it handle increased capacity. As the autonomous freight vehicle arrives, Fr8 Network plans to be among the first to offer blockchain and IoT-based solutions for manufacturers and fleet managers.
For more information on Fr8 Networks, watch the video below.