The “Amazon effect” in the freight world has not only altered how quickly customers want their shipments, it has also led to an influx of cash into the freight world as startups and legacy companies alike scramble to play catch up, said Jason Duboe, an angel investor who has assisted many companies, including project44, where he serves as SVP of business development.
“The catalyst in the last 2-3 years has been Amazon, and there has been a rapid [infusion] into the space,” he told attendees at the BiTA Spring Symposium on Monday at the Georgia International Conference Center in Atlanta. Duboe noted that this rush to fund projects has led to more data than ever before, but that there is still a problem with getting clean, usable data. “[Current data] is not flexible, it can’t change in real time and it can’t adapt,” he said.
The answer to this is likely blockchain. Duboe participated on a panel titled, “Utilizing Data for Freight Visibility,” during the BiTA event. Also on the panel was Tim Leonard, senior vice president and general manager of TMW Systems, and Priya Rajagopalan, chief product officer for Four Kites. The panel was moderated by Dean Croke, chief analytics officer for FreightWaves.
Duboe pointed out that with all the data the industry is generating, there are still questions that need to be answered. “Blockchain is being developed on top of APIs…[but] how do you get data in and out of the blockchain? How do you ensure it is accurate,” he asked. “How do you start connecting those discrete technologies [generating the data].”
Duboe noted how TMW System’s “Project Harmony” is showing real use cases for blockchain and demonstrating that “it’s [now] the art of possible.”
Project Harmony is a four-year effort by TMW that is only in its first year, Leonard said. It is designed to create an ecosystem for carriers, shippers and brokers that empower them to manage goods movement on the blockchain.
“The aspects of Harmony is focused on two major initiatives: productivity and visibility,” Leonard said, that will eventually lead to a “forward balancing” of networks.
“We believe that some of these technologies that we will introduce on top of the blockchain in the next few years will fundamentally change freight [movement],” he said.
Rajagopalan emphasized that blockchain is a technology for carriers of all sizes. With 80% of the over-the-road trucking industry controlled by 500,000 carriers, the industry remains comprised of mostly smaller carriers. Some 90% own fewer than 6 trucks, she said, “so their entire IT system is on the Dell laptop they’ve bought.”
But, like all IT systems regardless of fleet size, it depends on the quality of the data and how quickly it can be incorporated into the system and turned into actionable data, said Duboe. The piles of data are also changing the way businesses seek that data.
“The amount of data they are requesting is increasing,” Leonard said. “The shippers are now getting hungrier. Shippers are wanting data, but they don’t want silos of data, they want consolidated data.”
Going back to the Amazon effect, Duboe said that it led to a large investment in IT purchases among companies, but those purchases, in many cases, were made in a vacuum that is now leading these companies to seek help in organizing and connecting the data in meaningful ways.
Duboe said one of his clients solved 86% of their data problems by anonymizing the data upstream. Things as simple as lift gates that may be referred to by different names by different companies, he said, require time to create a common language, something that blockchain can help solve.
“Blockchain has amazing [possibilities] from a consensus perspective,” Duboe said.
Despite the technological promise of blockchain, Leonard advised that humans will still be involved.
“There is a human element we can do with blockchain,” he said. “One of the things a shipper can do is physically look into the truck. The driver could be required to measure the temperature to verify what the sensors are saying.”
This both keeps the driver engaged and verifies that the initial information entered into the blockchain by sensors is accurate.
Blockchain also doesn’t have to be expensive, Leonard said, noting that third-party companies could host a blockchain solution. “If I’m a small coffee company, I can have a hosted [solution] where I just pay a monthly hosting fee,” he said.
The design of the system – how it will move goods and other attributes of a smart contract – can be done in house and that solution can be created and hosted onto a third-party platform, saving potentially thousands from having to hire data scientists or to build APIs.
When it comes to freight visibility, it all starts with the data and the ability of blockchain to create visibility into that data, but as Leonard said, “we can’t leave out the human intervention.”
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