EDI vendor Kleinschmidt joins blockchain group

Electronic data interchange (EDI) platform provider Kleinschmidt Inc. has joined the Blockchain in Trucking Alliance (BiTA), an industry group created to guide the development of blockchain-based data-security software in the transportation industry, the company said today.

Deerfield, Ill.-based Kleinschmidt provides e-commerce solutions for the transportation industry by helping clients integrate supply chain data. Kleinschmidt will join other alliance members including TransRisk, McLeod Software Corp., PS Logistics, 10-4 Systems Inc., TMW Systems Inc., and Convoy, according to the BiTA website.

The BiTA members will develop new standards and practices for advancing the use of blockchain in logistics, BiTA co-founder Craig Fuller said in an interview. Fuller is also CEO of TransRisk, a Chattanooga, Tenn.-based provider of trucking futures contracts designed to protect participants against market volatility on major U.S. trucking routes.

Blockchain software is best known as the technological foundation of the Bitcoin digital currency. Its chief benefit is allowing users to quickly and securely share data by ensuring digital records cannot be changed without the consensus of all parties involved. Early applications show that blockchain technology enables logistics firms to save money and do business faster, Fuller said.

For example, a blockchain network could allow trucking companies to share universal trailer pools, renting time on physical assets much as travelers who rent rooms using the Airbnb online real estate marketplace do, he said. Blockchain technology could also allow shippers and brokers to create self-executing "smart contracts" that automatically provide fuel reimbursements when truckers fill up their tanks, or pay drivers as soon as they deliver their freight, said Fuller.

Other blockchain applications could include tracking every person who has had possession of a truck; ensuring that driver histories are accurate; automating equipment maintenance records; recording how many times a tire has been retreaded; or identifying every person who tampers with sensitive cargo such as food, said Fuller.

"This is the most revolutionary technology to hit the industry since the Internet," Fuller said. "It could change the construct of the U.S. economy by dis-intermediating those businesses that live in the middle and don't create any functional value. Blockchain routes around them and you don't need to know who's on the other side of the transaction, because the contract itself will self-execute."

Software giants such as IBM Corp. and SAP SE develop logistics applications for blockchain, such as a project by Danish shipping giant Maersk Line to digitize its trade data. In another initiative, the food vendors Nestlé, Unilever, and Wal-Mart Stores Inc. recently launched a project to apply blockchain to food safety challenges.