Every industry consortium has a bit of a personality. One could describe the Blockchain in Transport Alliance (BiTA) as pragmatic and commercial with the aim of improving profitability. FreightWaves operates the consortium on a day-to-day basis on behalf of its members. Given FreightWaves is the largest website for the industry, it’s not surprising that BiTA membership is now 300, and growing at a rate of 20 members a week since September 2017.
Other alliances within the industry include the IBM and Maersk joint venture, and the Accenture consortium that consists of major shippers and Anheuser-Busch. Both of these focus on supply chain tracking and transparency.
BiTA has a different emphasis.
Freightwaves CEO, Craig Fuller said: “We published the kind of initial use cases that are less talked about, less obvious. Certainly, transparency and tracking is an important element, and that is something that companies are working on, but I believe if you really want to get activity in the market, companies that are in transportation need some monetary justification for investing in a new practice. And so what I look at are what impacts cash flow to my business most. ”
He elaborated with a payment example.
“Payment is an example where it’s not a stretch to take blockchain and apply it to payments, because fundamentally blockchain is built upon the movement of money and it’s also one that’s somewhat readily available, that isn’t going to have a ton of market friction to it.”
“So if you can take a cost of capital and a payment cycle say from 300 basis points (3%) to 30 basis points and receivables payment cycle from 60 days, or 45 days down to five days or three days or immediate, then you have a ton of value that you can bring companies, and they’re more likely to adopt it.”
And to highlight the financial justification Fuller referred to the pharmaceutical supply chain use case often quoted. While safety for consumers is a key driver, combatting counterfeit drugs is a substantial financial motivation.
Some of the early potential use cases include:
1. Performance History – vehicle maintenance, quality assurance
2. Dynamic Optimization – capacity monitoring
3. Payments and Pricing – fraud detection, theft prevention
Fuller emphasized that BiTA is releasing an updated list shortly but that the possibilities are vast.
We spoke about a Proof of Insurance application, which came up in discussions with the RiskBlock Alliance for insurance. For BiTA members, insurance is one small part of the process. Before taking on a load, you have to go through safety underwriting to demonstrate the fleet has an adequate safety rating, is acceptable for the specific cargo, is licensed and a list of other criteria.
Fuller commented “I don’t want to have to go into an Insurance app because that’s only one part of a ten-point checklist that I have to do to underwrite this carrier. If I had to go to the separate app, it’s actually a clunkier process.” That said, he thought the integration of proof of insurance at the blockchain level could be beneficial for both.
“People come and ask ‘are you building THE blockchain for freight?’ And I look at them and say ‘I don’t know what THE means because you’re talking about hundreds if not thousands of use cases or more’. There’s no way that a single technology framework would ever be able to address all of those elements. It is going to be layered and layered based on specific applications, and I think that’s the way you have to think of it.”
In efforts to justify lofty valuations, some ICO companies tend to claim their token can be used for everything, which is unrealistic, and in Fuller’s opinion, creates confusion.
Goals of BiTA
For some industry alliances, the objective is to produce blockchain technology together. BiTA sees itself as an enabler, not a producer and anticipates it’s larger members as the technology developers. Because it’s not involved in the tech side, it’s agnostic about which software frameworks to choose.
It has three goals:
a. creating blockchain standards
b. providing educational leadership
The latter includes a community (on slack), understanding the best uses cases, and fast-track commercialization by helping to connect the technology producers with market partners.
The alliance has grown big quickly. Large alliances have the potential to be unwieldy. But given the BiTA goals exclude technical development, and the emphasis on enabling commercialization, bigger is likely to be better.