Home » News » OmniTRAX Leadership Blog | Issue 2 | Blockchain Technology is the Fulcrum that will help Lead to Industry Collaboration
OmniTRAX Leadership Blog | Issue 2 | Blockchain Technology is the Fulcrum that will help Lead to Industry Collaboration
Posted On: July 3, 2018

Blockchain Technology is the Fulcrum that will help Lead to Industry Collaboration

By Hubert Gassner, CFO of OmniTRAX, Inc.

Every shopper today takes it for granted that when they make online purchases the retailer will give a tracking number to enable them to see where their shipment is, where it is coming from and where it’s going to, plus the projected delivery date and time window. That level of service is what customers now expect and is not unique. In fact, it is table stakes for every retailer with a digital presence. Yet this scenario, which is touted as the ultimate nirvana in the rail industry, remains out of our reach.


All too often executives and others in the transportation and logistics industry don’t look for common ground but focus on the more adversarial cost of one vendor vs. another, and how can that  vendor can be squeezed. This approach will kill any initiative to improve service levels in the rail industry and allows trucking to eat our lunch.

Bottom line is that we in the rail industry need to learn to collaborate better and enable our shippers and end customers to obtain the same insights that every online consumer has today. Precision Railroading as defined by Hunter Harrison does not alone fix the problem, nor do Independent Safety Assessments at all points or each player in the transportation chain collecting all kinds of amazing proprietary data. These are just small but critical building blocks in the rail road transportation eco system.

What will enable a quantum shift in the rail ecosystem is a recognition by all players (Class 1s, Short lines, shippers, customers etc.) that a product’s location data is never ever a proprietary piece of data owned by a single player but should always belong to the actual product shipped. Blockchain technology will empower that momentous shift.

Blockchain is a distributed database that is updated in real time, securely stored in decentralized locations and easy to check. It insures that no person can cover up a mistake by changing a database entry because there is total transparency — Blockchains ledgers are open to anyone in a transaction. In rail transportation, that includes shippers, regulators, carriers and customers.

Given this definition and scope of use, the first step for implementing blockchain technology in the rail industry is for Class 1’s and Short lines to recognize that location data needs to be liberalized from our respective data silos. Until we as an industry do not do that, all talk of Blockchain is mere hype.

As our initial step, OmniTRAX recently became the first short line railroad operator to join the Blockchain in Transport Alliance, which was launched to engage thought leaders within the transportation and technology industries who want to leverage blockchain technology within the supply chain by developing a standards framework, educating the market and encouraging widespread adoption. I said at the time that it is critical for the short line and regional railroad sector of the transportation industry to have a seat at the table when supply chain technology standards that can enhance performance are discussed.

We hope trading partners in the rail and broader transportation industry will join us in this effort.


Readers are encouraged to respond with any thoughts or insights on this content to comment in the space below; this blog is for you and we want to make sure it meets that goal. For private feedback, feel free to email our editors at leadershipblog@omnitrax.com.

In the next blog post, Chief Commercial Officer Peter Touesnard will share his thoughts on how to attract nontraditional shippers to the railroads.

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