RT Blockchain is a new project from Return Trucks which makes use of the Blockchain to simplify processes in the trucking industry and eliminate the bottlenecks that hamper the free movement of goods within the logistics industry. Essentially, RT Blockchain can play the role of the middleman/agent in the trucking industry with the Blockchain.
What is Blockchain?
Most people associate the term "Blockchain" with the world`s most valuable cryptocurrency, Bitcoins, but it is much more than that.
It`s an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.
Blockchain technology facilitates peer-to-peer transactions without any intermediary such as a bank or governing body.A blockchain is essentially a public, distributed and synchronized database, which is secured with cryptography and made completely hack-proof.
As a tech start-up, we were keen to explore how Blockchain can be used in the logistics industry.
Most people who are involved in the transportation sector or the trucking industry in Middle East know how difficult it is to get the transport service payment on time. Quite often, logistic partners find that their working capital gets blocked because of the delay in payments from the service user.
All service users have to submit the proof of delivery (POD) for each delivery along with the invoices. However, quite often, getting the POD takes a lot of time, because of which the invoicing gets delayed. The service user fails to invoice their clients on time, and so the payment gets delayed as a consequence. This results in the blocking of the working capital of the transport operator and a delay in the processing of the payments.
How Blockchain Solves the Problem:
With Blockchain, all transactions are open and visible to all parties on connected through the common network. The service user can process the invoice from the transport operator without requiring the POD at any stage because the entire transaction is visible to all the parties concerned. The finance department of the service user can access all details of the delivery from the Blockchain, which serves as an open ledger. This ensures that the invoices are submitted on time and payments are processed faster.
RT Blockchain is a pilot project from Return Trucks that explores howblockchaincan be utilized to solve the inefficiencyin the logistics sector in Middle East. The principle objective of the project is to replace the middleman/Agent by the blockchain.
RT Blockchain makes use of Ethereum, which is the most popular cryptocurrency after Bitcoin. Ethereum is used to process the Smart Contracts.
Smart Contracts are account holding objects on the Ethereum blockchain. They contain code functions and can interact with other contracts, make decisions, store data, and send Ethereum to the other parties on the network. The entire program logic of RT Blockchain is built into the Smart Contracts.
All transactions on RT Blockchain are recorded on a public blockchain in the backend. The frontend consists of a simple user interface which is easy to use and hides the complexity of the system.
Here`s How RT Blockchain Works:
RT operates an Escrow account to facilitate the transaction between the load owner who creates the consignment and the shipper that executes it. RT Blockchain makes sure that the payment is processed on time.
RT Blockchain Workflow…:
- There are three parties connected through the RT Blockchain platform: the load owner, the shipper and the bank.
- Load Owner creates a consignment entry with a Shipper.
- Load Owner transfers the agreed amount to the RT Escrow Account from his Bank.
- Based on the confirmation from RT Escrow Account about the Load Owner depositing the money, the Shipper loads the consignment.
- Based on the Smart Contract conditions defined, a partial amount is released to the Shipper.
- As soon as the Load Owner provides the final confirmation of the delivery, the remaining Amount is transferred to Shipper’s Bank account from RT Escrow Account.
- RT Blockchain can help automate the banking process to an extent. The transfer of the funds from the Load Owner’s Bank to the RT Escrow Account is manual. But all the payments to the shipper are automated using the corporate banking system which is the same as Bulk Vendor payments.