While it might not be so obvious, the trucking industry is a critical component of the U.S. economy. This billion-dollar industry serves as the backbone for U.S. commerce. In the U.S. alone, spending on overland logistics reached over $700 billion last year, a number that is only expected to grow.
Unfortunately, the trucking industry is also broken and has developed a reputation for falling behind on technology adoption. As a result, many problems often occur between key players in the industry – shippers (the demand), carriers (the supply), and brokers (the intermediaries).
For example, manufacturers (the shippers) often have a tough time finding available capacity for their goods. This is ironic, however, as every year carriers (truckers) drive over 29 billion miles with partial or entirely empty trucks. Within the trucking industry, demand is said to be exceeding supply, yet there are still many empty trucks on the road.
Of course, this problem could be due to a number of issues, yet freight brokers, who are responsible for connecting millions of trucks with distributors, have become part of the problem. Additionally, brokers are known for charging high fees to coordinate transport, yet the disconnect between shippers and carriers is cause for concern.
This specific problem, along with many others facing the trucking industry, struck a nerve for Jon Fox. Mr. Fox owns a freight company called Lewiscoholdings, which spends million of dollars each year on domestic freight. Mr. Fox grew tired of working with third-party brokers, as there were many problems with shipments and the company was paying a 20 percent markup to do business with these middlemen.
Mr. Fox eventually had an “aha” moment when he decided to stop using brokers and go direct. Within a week the company had negotiated deals directly with some of the largest carriers in America.
Shortly after realizing that brokers were no longer needed, Mr. Fox looked towards the blockchain as a source of truth that would completely revolutionize the freight industry. After all, some of the main benefits of blockchain technology are eliminating middlemen and creating a transparent network based entirely on trust.