Trucking industry leader touts blockchain for savings, sees tax cuts investing in workforce

With nearly one in 10 jobs in Arkansas effected by trucking, the state’s trade association industry leader sees the transportation sector pointed toward a bright horizon.

Shannon Newton, president of the Arkansas Trucking Association, says her members are exploring revolutionary technological advances, putting tax cuts to good use towards an aging workforce, and willing to fund new and existing infrastructure.

Newton sat down for an interview with Talk Business & Politics’ Roby Brock for the Northwest Arkansas Business Journal and shared her thoughts.

Brock: Tell me a little bit about blockchain and how big it is becoming in the transportation industry, and probably for people that don’t understand what blockchain technology is, you might have to provide a primer.

Newton: So blockchain technology actually is not specific itself to transportation. I think that the linkage is coming between a Blockchain in Transportation Alliance (BiTA), which has taken the lead on the issue and its footprint has gotten so big that it has pushed transportation and logistics to the front of the conversation on blockchain.

I am certainly no expert and don’t want to pretend to be one with you today. But blockchain is a technology platform. The idea is that there are so many entities specifically in logistics who are in constant communication, whether it’s about freight or equipment or drivers. There’s so much rapid exchange of information that if there were one platform in which all those users had access to the same information simultaneously, with the ability to manipulate and receive that information, there would be huge efficiencies within the supply chain that could be gained.

The trick there is that you would have to have one platform with everyone using a synchronized or approved format for sharing it. That’s kind of the purpose of that BiTA, the transportation alliance on blockchain. It is to come up with some sort of format that everyone would use so that we could all participate and achieve those efficiencies.

I’ll give you one analogy, the way that it was explained to me that made sense, and this may or may not work for you. Think of the way we all have online banking. If you think of the way that you access your online banking, essentially the bank controls all the information. So they know how much money is in your account and each time there’s a transaction, you can go and look at it, but you don’t really have the ability to manipulate the data. You’re just seeing their records. If that were to be in a blockchain format, you would each have equal access and the ability to manipulate the data. But each change would have to be approved by both users.

Brock: The bottom line is it could bring efficiencies to the system, and any time you can drive efficiencies in the transportation chain of command you save money, right?

Newton: The efficiency is the big carrot. That is why all of them are chasing that if we can get to a place where there is one platform, that all those users in the supply chain could be on, I think the quote was, there was a potential for a five-fold gain in efficiencies.

Brock: Let’s talk about another thing that is potentially saving some trucking and transportation companies money: the big corporate tax cuts that came at the end of 2017. What are you hearing your member companies talk about where they are putting that money, that savings from the corporate tax cuts?

Newton: There have been a lot of favorable headlines for our industry and for several companies across the state on what they’ve been doing and how those tax cuts have impacted their bottom line. Our members who have received or achieved the greatest savings have been mostly interested in addressing some work force issues, so we have a driver shortage and some driver pay. We’re looking at re-investment in people, both drivers and office staff, on trying to maintain and attract good talent to our industry. Then also in equipment, trucking is a very high capital-intensive industry. So when you start looking at the cost of equipment and gains, there’s environmental gains, efficiency gains, safety gains in having new equipment and investing in some of the technology that has proven to have really good returns on investment in the safety arena.

Brock: Lastly, let’s talk about infrastructure. Why is solving our infrastructure problem so difficult? What do you see your industry trying to do to find some solutions that obviously involve a high price tag?

Newton: I think the political climate over the last four, six, eight years has definitely proven challenging to come up with some solutions to the lack of infrastructure funding.

Brock: Because people don’t want to have tax increases?

Newton: Yes, the tax — a three letter word “tax” has become a four-letter word that’s unmentionable within 200 yards of the state Capitol.

Unfortunately, just the way that highways and the way that infrastructure has traditionally been funded has been through a tax. We have a dedicated revenue source being the fuel tax and without a significant change in policy, there’s no other way to get additional funds for infrastructure funding.

So there’s really just two choices. The choices are new money, which would be a fuel tax increase. Or redistribution of the money that we already have. Both of those have pluses and minuses and they’ve both proven to be very politically challenging. I do think that we have reached some sort of a critical mass if you will, in that we are approaching almost 20 years without addressing infrastructure funding. Citizens are actually paying less and driving more on more expensive roads. I just think that we are finally gaining some traction, some momentum with leadership here in both houses over at the Capitol, and even with the Governor to some extent on including and prioritizing infrastructure funding in the 2019 session.