Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Corporate CIOs aren't shrinking violets when competing for budget dollars. If it walks, talks, or quacks technology, they'll push ROI projections and lobby hard for the stuff. But mention the word "blockchain" and the CIOs' attitudes suddenly get adjusted. They become Star Trek's stone-cold Mr. Spock to the emotional Captain Kirk, forced to tamp down the demands of their besotted CEOs to "get me some blockchain!"
Part of the caution stems from the notion that the CIOs' bosses have no idea what a blockchain is or what it does. A blockchain is not a product, service, or database. It is a process, one with enormous promise but whose broad uptake is far from assured. It was first utilized to support the Bitcoin crypto-currency, which buyers and sellers use to execute transactions outside of the normal banking ecosystem. But leveraging a blockchain across multiple industries, while certainly feasible, will require much work, robust collaboration between many parties, and a challenging transition to what could end up being different sets of laws and regulations.
"Managing expectations will be critical over the next two years as CIOs try to rein in CEOs who don't understand blockchain, but are sold on its potential," Ken Craig, senior vice president, special projects for Birmingham, Ala.-based McLeod Software, a trucking software provider, told a meeting of the executive council of the "Blockchain in Trucking Alliance (BiTA)," an industry standards group, in mid-November in Atlanta. Craig co-founded BiTA with Craig Fuller, founder of TransRisk, the first futures market for truckload spot-market pricing, which had its coming-out party in late October.
Given the blockchain's superheated hype, expectation management could be a tall order. According to Fuller, 561 companies have applied to join BiTA, a number he reckons makes the group the largest vertical involved in blockchain. About one-third of the applicants have interests that extend beyond trucking, Fuller said. There is little doubt that many are IT firms exploring profitable ways to refresh trucking's reputation as a technological backwater and bring it into the 21st century. There is also keen interest in how a blockchain process could transform an industry where time and the chain of custody mean everything, and where the bill of lading—the standard contract of carriage—still rules the roost. About 30 attendees were expected at the BiTA council meeting, but about 160 showed up, Fuller said.
What blockchain is
A blockchain is a distributed ledger that creates a transparent and indelible trail of each transaction, free of hackers and of so-called trusted third parties such as lawyers, bankers, and other intermediaries who've historically filled overseer's roles. In its simplest form, parties within an extended supply chain add "blocks" of information to the broader chain. The blocks could identify as much information as the stakeholders deem necessary for the transaction to progress and be consummated. Cheating would be virtually impossible, because each step in a transaction, whether open to the public or restricted to specific stakeholders (the latter being what is envisioned in trucking) would be witnessed by everyone in the chain.
At the heart of a blockchain's appeal is the development of so-called smart contracts, or self-executing contracts that would not require a third party to validate them. As envisioned, contracts could be converted to computer code, stored, then replicated on the system and supervised by a network of computers that run the blockchain. Smart contracts enable the exchange of money, property, shares, or anything of value in a transparent and conflict-free way, while avoiding the services of a middleman, according to supporters of the blockchain process. Like a traditional contract, these new compacts would define applicable rules and automatically enforce those obligations, proponents say. Smart contracts are the "holy grail" of the blockchain concept, said Craig of McLeod.
It is no secret that global supply chains running on legacy systems often get bogged down in the back-and-forth of obtaining multiple approvals for transactions, and are vulnerable to loss and fraud. A blockchain prevents this by providing a secure and quickly accessible digital version to all parties in the chain, advocates say.
"We all collectively work to integrate one level upstream or downstream through point-to-point integration. But then we lose the ability to view the extended supply chain beyond those direct relationships," Shanton Wilcox, a partner at Infosys Consulting, a Palo Alto-based firm that works with logistics providers, among other fields, said in a recent webcast sponsored by the investment firm Stifel.
By charting each step of a transaction in the form of blocks that are validated before they are added, a blockchain process cuts the time lag incurred in achieving extended visibility and reduces the risk of information being corrupted as it moves through the chain, Wilcox said.
Companies that have explored a blockchain for transportation have done so gingerly, to say the least. Danish ocean carrier Maersk Line is probably the furthest along, having completed a test of managing Maersk's cargoes using blockchain in collaboration with IT giant IBM Corp. Retail behemoth Wal-Mart Stores, Inc. is testing blockchain technology, mostly to track food shipments with its suppliers, according to Gartner Inc., a consultancy that presented at the Atlanta event. Japanese automaker Toyota Motor Corp. is considering a blockchain technology to track auto parts from the point of manufacturing to assembly plants in other countries, Gartner said.
What blockchain isn't
One wag at the BiTA event referred to a blockchain as "the thing that enables the thing." Scrambled syntax notwithstanding, the description is not far from accurate. Because it isn't a product or service, a blockchain doesn't replace technologies currently in use. Rather, it augments existing business-to-business integration systems with what Craig called a "shared visibility overlay." The challenge for developers and users will be to determine where a blockchain fits within the framework of the current IT mosaic, Bart de Muynck, research director at Gartner, said at the Atlanta event.
As with other very nascent processes, the jury is out on how a blockchain would actually perform. A present-day blockchain cannot handle a lot of data and is not scalable, experts said at the conference. Attaining the ultimate objective of executing smart contracts will depend on Congress, states, or the courts writing and interpreting laws granting them legal authority, a process that could take years.
There will also be new scrutiny placed on the software developers who are writing code to enable a blockchain. One of the pre-meeting conversations centered on whether a blockchain would dis-intermediate lawyers, who have long filled the role of a trusted third party. One attendee replied that lawyers would still be needed to help ascertain liability in the event of a problem, and that they will be riding herd on the developers. Not surprisingly, blockchain advocates said it is critical to establish a transitional mechanism between paper and smart contracts, and to produce a totally bug-free system for smart contracts.
Speakers at the BiTA event emphasized that blockchain processes will not advance without a well-thought-out strategy, rock-solid collaboration among vested interests, and a strong set of industry standards governing folks with different agendas operating in what could become a radically changed world. As one attendee said, "What we are talking about is doing away with traditional trusted parties that have existed for centuries, and replacing them with technology, and with each other."
A version of this story appeared in our January 2018 issue under the title "The block is hot."
The German forklift vendor Kion Group plans to lay off an unspecified number of workers as part of an “efficiency program” it is launching to strengthen the company’s resilience and maintain headroom for future investments, the company said today.
The new structural measures are intended to optimize Kion’s efficiency, executives said in their fourth quarter earnings report.
“While internal programs to continuously improve product, production, and services costs were already up and running throughout 2024 and will continue, further structural measures will address a more efficient setup for Kion in Europe. This is expected to have an impact on personnel requirements subject to consultations with the respective employee representative bodies as required by local laws,” the report said.
“The efficiency program is addressing developments in the macroeconomic environment. European economies are struggling to gain momentum – this affects key customer industries in the Industrial Trucks & Services segment, where Chinese competitors have been improving their market position in the aftermaths of the recent pandemics,” Kion said.
The move comes as Kion reported that it finished its 2024 financial year with slightly improved revenue of $11.9 billion (over $11.8 billion in 2023), and profitability (measured as earnings before interest and taxes (EBIT)) that significantly increased to $951 million (over $820 million in 2023).
The company now plans to pay $249 to $269 million in financial year 2025 to implement the cost saving measures. Following that one-time charge, it expects to achieve sustainable cost savings of $145 million to $166 million per year, beginning in 2026.
“In order to maintain headroom for investments ensuring our future, to further strengthen our competitiveness and our resilience, we must manage our cost base. This requires structural and sustainable measures,” Christian Harm, CFO of Kion, said in a release.
By the numbers, fourth quarter shipment volume was down 4.7% compared to the prior quarter, while spending dropped 2.2%.
Geographically, fourth-quarter shipment volume was low across all regions. The Northeast had the smallest decline at 1.2% with the West just behind with a contraction of 2.1%. And the Southeast saw shipments drop 6.7%, the most of all regions, as hurricanes impacted freight activity.
“While this quarter’s Index revealed spending overall on truck freight continues to decline, we did see some signs that spending per truck is increasing,” said Bobby Holland, U.S. Bank director of freight business analytics. “Shipments falling more than spending – even with lower fuel surcharges – suggests tighter capacity.”
The U.S. Bank Freight Payment Index measures quantitative changes in freight shipments and spend activity based on data from transactions processed through U.S. Bank Freight Payment, which processes more than $43 billion in freight payments annually for shippers and carriers across the U.S.
“It’s clear there are both cyclical and structural challenges remaining as we look for a truck freight market reboot,” Bob Costello, senior vice president and chief economist at the American Trucking Associations (ATA) said in a release on the results. “For instance, factory output softness – which has a disproportionate impact on truck freight volumes – is currently weighing heavily on our industry.”
Volvo Autonomous Solutions will form a strategic partnership with autonomous driving technology and generative AI provider Waabi to jointly develop and deploy autonomous trucks, with testing scheduled to begin later this year.
The announcement came two weeks after autonomous truck developer Kodiak Robotics said it had become the first company in the industry to launch commercial driverless trucking operations. That milestone came as oil company Atlas Energy Solutions Inc. used two RoboTrucks—which are semi-trucks equipped with the Kodiak Driver self-driving system—to deliver 100 loads of fracking material on routes in the Permian Basin in West Texas and Eastern New Mexico.
Atlas now intends to scale up its RoboTruck deployment “considerably” over the course of 2025, with multiple RoboTruck deployments expected throughout the year. In support of that, Kodiak has established a 12-person office in Odessa, Texas, that is projected to grow to approximately 20 people by the end of Q1 2025.
Businesses dependent on ocean freight are facing shipping delays due to volatile conditions, as the global average trip for ocean shipments climbed to 68 days in the fourth quarter compared to 60 days for that same quarter a year ago, counting time elapsed from initial booking to clearing the gate at the final port, according to E2open.
Those extended transit times and booking delays are the ripple effects of ongoing turmoil at key ports that is being caused by geopolitical tensions, labor shortages, and port congestion, Dallas-based E2open said in its quarterly “Ocean Shipping Index” report.
The most significant contributor to the year-over-year (YoY) increase is actual transit time, alongside extraordinary volatility that has created a complex landscape for businesses dependent on ocean freight, the report found.
"Economic headwinds, geopolitical turbulence and uncertain trade routes are creating unprecedented disruptions within the ocean shipping industry. From continued Red Sea diversions to port congestion and labor unrest, businesses face a complex landscape of obstacles, all while grappling with possibility of new U.S. tariffs," Pawan Joshi, chief strategy officer (CSO) at e2open, said in a release. "We can expect these ongoing issues will be exacerbated by the Lunar New Year holiday, as businesses relying on Asian suppliers often rush to place orders, adding strain to their supply chains.”
Lunar New Year this year runs from January 29 to February 8, and often leads to supply chain disruptions as massive worker travel patterns across Asia leads to closed factories and reduced port capacity.
Women are significantly underrepresented in the global transport sector workforce, comprising only 12% of transportation and storage workers worldwide as they face hurdles such as unfavorable workplace policies and significant gender gaps in operational, technical and leadership roles, a study from the World Bank Group shows.
This underrepresentation limits diverse perspectives in service design and decision-making, negatively affects businesses and undermines economic growth, according to the report, “Addressing Barriers to Women’s Participation in Transport.” The paper—which covers global trends and provides in-depth analysis of the women’s role in the transport sector in Europe and Central Asia (ECA) and Middle East and North Africa (MENA)—was prepared jointly by the World Bank Group, the Asian Development Bank (ADB), the German Agency for International Cooperation (GIZ), the European Investment Bank (EIB), and the International Transport Forum (ITF).
The slim proportion of women in the sector comes at a cost, since increasing female participation and leadership can drive innovation, enhance team performance, and improve service delivery for diverse users, while boosting GDP and addressing critical labor shortages, researchers said.
To drive solutions, the researchers today unveiled the Women in Transport (WiT) Network, which is designed to bring together transport stakeholders dedicated to empowering women across all facets and levels of the transport sector, and to serve as a forum for networking, recruitment, information exchange, training, and mentorship opportunities for women.
Initially, the WiT network will cover only the Europe and Central Asia and the Middle East and North Africa regions, but it is expected to gradually expand into a global initiative.
“When transport services are inclusive, economies thrive. Yet, as this joint report and our work at the EIB reveal, few transport companies fully leverage policies to better attract, retain and promote women,” Laura Piovesan, the European Investment Bank (EIB)’s Director General of the Projects Directorate, said in a release. “The Women in Transport Network enables us to unite efforts and scale impactful solutions - benefiting women, employers, communities and the climate.”