Blockchain and other distributed ledger technologies (DLTs) could help create trust and consensus in areas of the transport sector where they are needed for efficient solutions but currently often lacking. Such challenges concern for instance clearing transactions amongst multiple parties with divergent interests, authenticating provenance, managing assets, and auditability.
This report explores how DLTs can address these issues by providing an alternative to centralised record-keeping and third-party audit‑based approaches. It offers recommendations for maximising the benefits of DLTs in transport based on several use cases in freight and logistics as well as passenger transport. The report expands on the findings of an expert workshop with 15 experts in September 2019 and the previous ITF report Blockchain and Beyond: Encoding 21st Century Transport (2018).DLTs are shared databases maintained by a distributed set of users without oversight from any central authority.
Blockchain is one type of DLT in which each piece of new data (a block) added to the shared ledger is attached in sequential order to all previous blocks (the chain). At their core, DLTs address a recurrent question in a number of economic sectors including transport: how can a group of actors who do not know or trust each other carry out transactions amongst them and reach consensus?
Transport services rely on various trust mechanisms based on centralised record-keeping and third-party audit which enable transactions and help prevent fraud. This trust architecture has improved transport services and trade, but also contains costly frictions and inefficiencies. DLTs can address some of the persistent challenges in the transport sector relating to trust and consensus – challenges linked to clearing transactions amongst multiple parties with divergent interests, provenance authentication, asset management, and auditability.
Addressing these challenges through DLTs could reduce friction and save costs. To make DLTs a success in the transport sector, savings need to outweigh the costs of new soft- and hardware, in reconfiguring well-established systems and training, attracting and retaining digitally savvy workers. The high cost of adopting DLTs and technical challenges revealed by pilot programmes have somewhat dampened the initial excitement around blockchain and other DLTs.
Public and private stakeholders continue to explore the potential of DLTs to support regulatory enforcement and increase efficiency in transport despite this disillusionment, which follows the typical hype cycle for technology innovation. DLTs are capable of maintaining secure data records and enabling peer-to-peer transactions through auto-executing algorithms called smart contracts. By simplifying transactions, improving data history auditability, and removing data from single points of failure, DLTs can simplify enforcement and foster sustainability in the transport sector.
Source: International Transport Forum
Blockchain and Distributed Ledger Technologies (DLT) have a strong potential to solve challenges of the transport industry and of mobility services where the sharing of data and transactions among multiple actors is a hard requirement, and the existence of siloes along with the lack of trust between parties from different sectors can be detrimental to data accessibility. The potential benefits and impacts of this technology in the transport and mobility sector are however not well known.
“The ITF-OECD report highlights the relevance of DLT for Transport and describes existing Use cases for supply chain and mobility as a service. The important step of raising awareness and exchanging best practices among all actors of the mobility sector to better understand the potential and limitations of this technology has also been at the core of ERTICO’s Blockchain related initiatives so far, with the organisation of several workshops at ITS Congresses and the involvement in the INATBA association where ERTICO is chairing the Mobility Working Group”, said Stephane Dreher, Senior Manager, Connected and Automated Driving, at ERTICO.