The trucking industry in the U.S. is inundated with small independent fleets or owner-operators, so much so that 91% of the industry comprises of fleets which operate six or fewer trucks on the road. From a logistics perspective, fragmentation makes it hard for the industry to drive efficiency – an issue that LaneAxis, a company based out of California is looking to address through blockchain.
“We are providing an automated system on blockchain that allows a shipper to connect directly to a carrier down to the driver level through our mobile application, eliminating the need for a broker or a 3PL company,” said Rick Burnett, CEO of LaneAxis.
Burnett has been around the transportation industry most of his career in the brokerage business, running white glove services for UPS. It was during this time that he was exposed to the frustration of outdated loadboards that was a perennial pain point being a broker. “We had drivers sitting at various truck stops, as they could not find loads because the loads didn’t exist,” said Burnett. “Brokers and 3PLs post them, and it’s a bait and switch type of thing.”
LaneAxis advocates for creating a direct model which has now become mainstream in different domains like the flight industry or banking. “You don’t need to go to the bank anymore to deposit money. You can take a picture of the cheque and send it, which automatically gets deposited,” said Burnett. “In transportation, it is a bit complicated right now, but with blockchain, it would be easier for the network to grow as it brings in trustability.”
Burnett insists that the blockchain platform that LaneAxis has created would be a comprehensive solution for the transportation industry – providing insurance for carriers, geofencing locations to perceive accurate pickup and delivery schedules, drawing up delivery confirmations, and even offering to take in electronic proof of delivery.
The idea is to build a community base within the driver force, which LaneAxis believes would create more visibility in the network. “We would then push the freight into the blockchain, allowing the ability to connect immediately to the carrier and assign a load with the mobile app down at the driver level,” said Burnett.
“We are focussed on the industry as a whole and not just white-labeling the solution to different people. We want to eliminate the millions of trucks that are moving down the road empty every day, as that would reduce wear and tear on the roads and also regulate traffic flow. We are focussed on efficiency inside the network and not just pushing a subset of data into the blockchain.”
Before materializing the blockchain platform, LaneAxis has been in the business of transporting loads for larges businesses, having run for the Big Three OEMs in Detroit and Walmart in Arkansas. This has given the company enough data to understand the market, and the problems faced by shippers and carriers in the ecosystem.
“If you are a shipper moving thousands of loads every day, you can imagine the labor-intensive process it would take to manage that load level. They need contracts and insurance, and when you give them a load, you would have to find out who is on the load and if he has picked it up, and follow up on problems like when he gets in an accident, or if the truck breaks down,” said Burnett. “He also has paperwork to be done and process payments inside a system. LaneAxis simplifies this by using blockchain and enables people to seamlessly integrate directly to the carrier.”
For doing this, LaneAxis is intent on the tokenization of the ecosystem and would be going public through a token sale. The company plans to use the capital raised to build out its infrastructure in phases. That being said, Burnett remarked that the biggest challenge in the space is to get people to understand the complexity of the industry and how held back it is from using technology for visibility.
“People never understand that Walmart or UPS have no idea about where a certain amount of their loads are on a day-to-day basis,” he said. “People don’t get this because when they order something, they get an email and can track their package on its way to their house. So it is hard for them to believe that in a massive industry not everything is tracked. This is a fragmented marketplace with over 700,000 trucking companies, and there is no true network visibility in transportation.”
Burnett contended that the technology of blockchain is here to stay, and that tokenization of data sets is a way to streamline the industry. “It is an opportunity to go out and build the network on a global scale. This could help the industry be more efficient,” he said.
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