Over the past two years, the transportation industry has graduated from Blockchain 101 and has become hungry for demonstrations of specific business applications of the technology. Tim Leonard, Executive Vice President of Technology at TMW, has emerged as an industry thought leader on the marriage of blockchain and Big Data. Leonard has a long pedigree in the information technology of trucking and automobiles—he served as the CTO and VP of Information Management at US Xpress before moving to General Motors to run their Big Data strategy.
Leonard gave a particularly well-received presentation at the North American Logistics CIO Forum that was held in Austin, TX, from Nov. 7-8, and again at the Blockchain in Transport Alliance (BiTA) conference in Atlanta the week after that. In Austin, the audience of about 150 executives from companies including JB Hunt, UPS, SAP, Werner, and Project 44 gave Leonard a double standing ovation after his demonstration.
Yesterday, Tim Leonard spoke with FreightWaves about what he’s learned about blockchain, data, and educating the industry about new technology.
“For the last 26 months, really, I’ve been looking at all different kinds of data sets from Trimble, our parent company—data from across sectors, including construction, agriculture, and geo-spacing,” said Leonard. “What we’ve come to realize is that you can’t just build a blockchain solution in a vacuum—it has to be data-driven or there’s no point. So we’ve been analyzing the data and identifying inefficiencies and problems, and then designing blockchain applications to solve those specific issues. We’ve found that industry participants respond much better to hearing about small, concrete steps they can take to solve real problems than grandiose visions of technological revolutions.”
Although streamlining payments has been one of the biggest areas of interest in blockchain—probably because of the widespread public awareness of blockchain-based technologies like cryptocurrencies—Leonard thinks that blockchain solutions can address inefficiencies and create transparency at all stages in the shipping contract. In particular, he’s been sharing with transportation executives his insights into how blockchain can improve commitment management, after analyzing hundreds of thousands of shipments from 400 different companies. Commitment management is a trouble spot for the industry, Leonard says, because over time commits trend downward—carriers rarely get what they’re promised.
A shipper might commit to move a certain amount of freight with a specific carrier each week in order to obtain a desirable, discounted price, for example, 5 truckloads from Monday to Friday. In the day-to-day scramble of fleet management, the carrier loses track of how many trucks are leaving each week from that specific shipper. Eventually, the carrier might discover that the shipper has only been providing 3-4 truckloads each week for shipment, and the shipper isn’t really earning his discount.
“Blockchain can allow both the shipper and the carrier to see exactly what’s happening with immutable ledgers. They get on the same page, and they can re-negotiate their agreement based on a shared reality of what’s happening, in a more efficient way,” said Leonard.
Leonard talked about the dozens—even hundreds—of data elements involved in each agreement between shippers and carriers, and said TMW was breaking them down into 58 ‘swim lanes’, each of which can be further subdivided. Everything from bid management, to freight priority, location, and special requirements can all be separated out and managed on the blockchain, according to the specific needs of the shippers and carriers.
Most importantly, though, Leonard said that industry participants, technology companies, and BiTA members need to come together. Blockchain in transportation will be less about individuals inventing solutions and trying to impose them on the industry; instead, shippers, carriers, 3PLs, and tech companies will have to share their data, identify trouble spots that affect everyone, and collaborate on mutually beneficial solutions. “For blockchain to flourish,” Leonard said, “nodes will have to seek out nodes. I can’t create it by myself.”
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