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Blockchain in the Transportation Industry

The transportation industry moves people and goods around the world every day. However, there are still many inefficiencies that create higher costs and slower processes. Blockchain technology presents solutions to many of these problems. Here's an overview of how blockchain can impact the transportation sector.

Reduce Fraud and Errors

Blockchain brings benefits of transparency, traceability, and immutability to transportation. Every action is recorded securely on the blockchain ledger for all parties to see. This drastically reduces the potential for fraud, double-spending, and errors that cost the industry billions annually.

For example, a shipper can immediately see if a delivery provider has taken custody of goods or if they are still at the warehouse through smart contracts. This accountability means providers must fulfill obligations and customers can trust data is accurate.

Improve Supply Chain Tracking

Global supply chains are complex, with many handoffs between manufacturers, warehouses, carriers, customs brokers, and final delivery. This opens up lots of opportunities for items getting lost or delays going unnoticed.

With a blockchain platform, all stakeholders can view the real-time status and location of inventory through the process. Sensors and IoT devices update the ledger when a shipment changes hands or crosses a geographic boundary. Everyone is working from a unified set of data. This minimizes “black holes” of visibility and makes the supply chain transparent.

Increase Carrier Efficiencies

Carriers deal with time-consuming paperwork and administration managing fleets, drivers, and load delivery. A blockchain freight network can reduce these overhead costs and speed up operations.

Smart contracts automatically execute payments between shippers and carriers when contract terms are met. Drivers can manage digital documents hands-free through customs and at delivery with sensors that update the network. Back-office reconciliation also becomes nearly instantaneous with a shared ledger rather than fighting over discrepancies on paper PODs or invoices.

Facilitate Secure Micropayments

Current payment methods pose challenges in situations where very small, real-time transfers are required. Blockchain enables micropayment channels humans couldn’t efficiently manage.

One example is charging drivers by the mile or minute instead of upfront fixed fees. Embedded sensors communicate mileage to execute fractional payments from a shipper’s account all recorded on blockchain. Escrow accounts also guarantee appropriate funds are available to pay out.


As a distributed, shared ledger between untrusted parties, blockchain technology brings transparency, efficiency, and security to transportation processes. Supply chain tracking, fraud prevention, payments, and operations all benefit leading to cost savings and faster delivery times. Many experiments are already underway, and blockchain is expected to disrupt nearly every aspect of global transportation in the years ahead.