Blockchain has been busy lately. It’s revolutionized digital currency, real estate, smart contracts, charitable giving, and now trucking.
Yes, trucking. The supply industry. While those of us eagerly await for blockchain to become more mainstream, a company called Fr8 Network has the potential to greatly expedite its rise and proclaim to the world just how many purposes blockchain really has.
First, a History Lesson
Trains used to be the sole source responsible for moving goods from one place to another. They could hold a high amount of cargo and were easily trackable thanks to the fact that railroads are fixed. But that’s the thing—you can only build so many stationary railroads.
The creation of the interstate highway system changed everything. Trucks have smaller capacities, true, but you can have more of them on the roads at any given time. However, this also allows for much more disorganization. Trucks can leave and arrive at much more frequent rates than trains, but how do you oversee such a massive network? This also made room for more individual truck owners and operators. 90% of the modern United States’ carrier market now consists of companies that possess less than six trucks.
Thus was born the freight broker. They became necessary for managing the carrier system, connecting, “What is now 15-million trucks to 250,000 manufacturers and 300,000 distributors across the country,” according to Fr8’s white paper.
Freight brokerage, however, is a business with high margins and has become very centralized. Brokers are encouraged to book as many shipments as possible and have become increasingly opaque, which means that some truckers drive empty or near-empty vehicles more than 28-billion miles every year. 80% of all overland cargo is transported via trucks, but isn’t it frustrating to know that the massive trucks you see at the gas station on a road trip may be empty?
Jon Fox is among those frustrated. As someone in the food industry, his income relied on delivery efficiency. How could he sell food if the food didn’t arrive on time, or was lost? Instead of doing it himself, Jon sought to tackle the root of the inefficiency problem and make the supply industry more reliable for everyone by founding Fr8 Network.
What Does Fr8 Network Do?
Think of Fr8 Network like a ride-sharing service. When you need a ride, you use an app to summon the nearest driver, and when you are at your destination, that driver can pick up a new person in the new area. Fr8’s platform allows truckers to search for driving jobs, and when they have dropped off a load, other people looking to ship products can hire them to take said products back to drivers’ original locations.
It sounds like this eliminates the need for brokers, right? Not exactly—they will still be necessary to act as representatives for carriers and shippers. But when it comes to actually scheduling shipments, they have their work cut out for them.
Fr8 Network does far more than just connect drivers to jobs. It’s a completely transparent platform because it uses blockchain technology, so every transaction and change is recorded on it. It’s designed for, “Shippers, carriers, and brokers to place and track orders, compare prices, assess performance, buy insurance, and set payment and credit. Add decentralized apps, blockchain encryption, and a new utility token, you can wipe out billions in unnecessary costs. Broker fees now at up to 30% of shipping costs fall to less than 5%.”
So it’s a platform where everyone who uses it—which will hopefully soon include everyone in the trucking industry—can see, well, everything.
The Future of Trucking
Can you imagine the implications of this kind of transparency? Prices will have less opportunity for manipulation. There will be less room for fraud—“fictitious pickup” is a thing. Brokers will have less chance to be greedy. Drivers and suppliers alike will be incentivised to remain honest and reputable or face the consequences of losing business. It can also decrease negative impact on the environment, too, because trucks won’t be driving around needlessly empty.
Fr8 Network created Fr8 Token, which is used to access the Fr8 Board. The token is ERC20 compliant and generated on the Ethereum blockchain. Tokens are necessary because, for example, “The fee-to-use Fr8 Board is paid in Fr8 token. All users must also have Fr8 tokens to put up as stake against the successful completion of their contract obligations.” Not meeting obligations may result in penalties, which motivates all involved parties to follow the system’s rules and keep the trucking industry decentralized. That is, after all, one of the best things about blockchain. If it has the potential to improve real-world systems, why not let it?
Will you be jumping on the Fr8 train?Opinions expressed here by Contributors are their own.