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Investopedia defines Blockchain as a distributed database that holds records of digital data or events in a way that makes them tamper-resistant. While many users may access, inspect, or add to the data, they can’t change or delete them. With Blockchain, transactions agreed by consensus are added to a block, a unique cryptographic code is calculated of the block, and that code is added to the following block creating a unique chain of blocks containing all the transactions.

The so-called distributed ledger is a technological system that is an asset database that can be shared across a network on multiple sites, geographies, or institutions. The original information stays put, leaving a permanent and public information trail, or chain, of transactions. The decentralized and distributed digital ledger contains transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. In short, Blockchain is a record-keeping mechanism that makes it easier and safer for businesses to work together over the internet.

The most popular application of Blockchain technology is Bitcoin, the currency system. The good news is that the Blockchain protocol can be used for non-currency purposes as well.

Though it was initially intended for financial transactions, businesses of all kinds are getting creative with the so-called Blockchain ledger, as it can be used to record, track, and verify trades of virtually anything that holds value. From ride-sharing to cloud storage to voting, companies in all industries are beginning to see blockchain’s potential. Earlier this year, consulting firm Deloitte predicted that by 2025, 10% of global GDP (approximately $12 trillion) would be built on top of Blockchain applications.

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Economic conditions are solid as we approach the first quarter of 2018. Unemployment is low and companies are hiring. Demand for freight transportation services should be strong during the first half of the New Year.  Shippers need to contend with a range of variables that are shaping the supply and demand for freight transportation services.

Hurricanes Harvey and Irma

Two natural disasters have had a dramatic effect on Texas, Florida, and the surrounding states. Hurricanes Harvey and Irma, two of the most powerful hurricanes in years, have created significant destruction to power grids, infrastructure, homes, and their contents. Repairing, replacing, and rebuilding will consume significant transportation resources, lumber, roofing materials, electrical equipment, appliances, paint, and other materials. These activities will continue during 2018.

The ELD mandate

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This has been a challenging month. Hurricane Harvey caused huge damage in southeast Texas and Hurricane Irma is expected to cause major damage to Florida and the east coast of the United States (as it did to several islands in the Caribbean). We should not forget the recent forest fires in British Columbia and California. Tornadoes, earthquakes, and ice storms seem to be occurring with much greater regularity and ferocity. These natural disasters have been very disruptive to the smooth flow of people, goods and services for many companies. They have also made life difficult for supply chain professionals.

Of course, disruptions to supply chains can come from factors other than weather or natural disasters. Quality control problems, piracy, export restrictions, and computer system hacking are just some of the factors that can come into play. To make matters worse, most of these disruptions are unpredictable in timing and scope. Each shipper has to make an assessment of the potential risks to their supply chains and make recovery plans.

According to Patthira Siriwan, senior project manager for supply chain development in North America for Damco, the combined logistics brand for A.P. Moller-Maersk, supply chain risks can be categorized into five groups: operational, social, natural, economy and political/legal. Damco defines supply chain risk management as “attempts to identify risks and quantify their commercial financial exposures as well as mitigate potential disruptions at each node and lane in the supply chain.” Supply chain risk models can vary from the rudimentary to the sophisticated. In the case of the latter, complex “what if” analyses can be performed. This allows the shipper and/or receiver to identify potential trouble spots and map out alternative supply chain strategies.

In an article in the Journal of Commerce, Siriwan indicated that shippers tend to focus on “factors with the biggest impact on their supply chain, such as on-time performance, supplier lead time variability and carriers by origin or trade lane.” Shippers need to perform some sort of probability analysis on the impacts of each potential disruption, with a particular focus on alternative vendors, carriers, origin points and ports and destination ports. Looking ahead to the balance of 2017, there are some major predictable (tropical storm Jose) and unpredictable risks that could drive up supply chain and transportation costs. The latter could include the impact on fuel costs as a result of unrest in Venezuela or war in the Middle East or war with North Korea.

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