In this blog post, we argue that automated trucks (especially Levels 4 and 5) will be embedded with digital wallets connected with smart contracts to interact with blockchain to: 1) spend and receive digital payments,

2) be an integral part of artificial intelligence (AI) driven workflow automation, and

3) create business innovations such as fractional asset sharing.

At dexFreight, we believe the next level of innovation in blockchain technology is the direct participation/integration of physical assets with the underlying ledger.


We can all agree to disagree on the year automated trucks (Levels 4 and 5) will be available at a nearby dealer. However, we all can agree that it is not a matter of if, but when it will happen. Level 4/5 means a truck can function without a driver physically present in the cab or in a remote control room. Einride and Volvo are two companies actively testing Level 4/5 automated trucks. At present, the focus of truck manufacturers is to ensure safety features work flawlessly.

However, driving a truck is not only about going from point A to B safely. A driver performs many non-driving functions to satisfy a contract between shipper and carrier — collecting and sending bills of lading and proof of deliveries, gathering accessorial charges, informing shippers about the truck’s status, paying for fuel and services. These tasks will have to be digitized and automated in order to be truly driverless. We also think when Level 4/5 trucks are ready for the market, AI+sensors will play a major role and potentially take over many digital functions that a driver performs.

At dexFreight, we believe decentralized identity, wallets, and smart contracts will play a critical role when automated drivers will not have human drivers to perform those non-driving functions.

volvo trucksource: Volvo

What is a smart contract?

A smart contract is a piece of executable code that resides in blockchain and has the capability to execute/enforce terms and conditions coded and agreed upon by parties to the contract.

One of the key value propositions of smart contracts in business terms is tamper-evident traceability of events/actions as well as parameters that are required to enforce contracts between parties. This significantly reduces the cost of reconciliation, settlements, and audits.

Smart contract in its current design plays a role of imperfect executioner and enforcer of the contract terms. Currently, smart contracts’ most pervasive use case is the issuance of tokens in exchange for another token. Although, its use case is rapidly increasing in the supply chain, logistics finance, insurance, etc.

How does a smart contract work?

Smart contracts are coded and deployed by a party (or a third party) on a public blockchain using tools like RSK (a Bitcoin sidechain), Ethereum. Let’s say the smart contract is designed to automatically pay for fuel (conventional or electric) services. A computer node and/or a digital wallet inside a truck with a connection to a public blockchain and interact with the smart contract. The node will read the fuel level from the truck’s internal system and pay the fuel service (which has agreed to be paid via the smart contract) agreed upon amount of cryptocurrency. Since both parties (truck and the fueling station) have agreed to transact via a smart contract, they cannot dispute the transaction that has been recorded in the blockchain. All this assumes the truck is capable enough to pull to a fueling station by itself and the fuel station has a tool that connects to the truck’s fueling system.

In addition to payment transfers, one can imagine the smart contract can be utilized to adjudicate and enforce many other contracts that require odometer readings, location readings, maintenance records, performance levels.

Use of smart contracts in trucking

  • Issuance of crypto payments — We think smart contracts are suitable for automated trucks to execute the encoded terms with various stakeholders (e.g., freight brokers, shippers, drivers, regulators) and external systems (e.g., toll facilities, parts order, fuel payments). Using in-build wallets, automated trucks can hold funds to buy computing power, fuel, and services and automatically pay to service providers via smart contracts. With AI, trucks not only have a huge amount of computing power, but with wallets, they also have economic power — the power to receive, hold, and transfer money on their own.
    hardware based blockchain car walletsSource: https://medium.com/riddle-code/hardware-based-blockchain-car-wallets-to-enable-future-mobility-solutions-11532964c6d6

  • Joint sharing of physical assets — There is a good chance that Level 4/5 trucks when they roll out of dealers will be so expensive that small trucking companies cannot afford to add to their fleet. In that case, why not share them. Let’s assume 3 small trucking companies decide to jointly own a new shiny Level 4/5 truck. Assuming legalities to do so are sorted out already. All three proud owners will require an immutable tamper-evident ledger that keeps track of odometer readings, have access to wallets, service records, interest payments, insurance payments. What better way to do that than using blockchain as a ledger and utilize smart contracts to enforce terms of the contract between the owners. Using blockchain and smart contracts as an adjudicator will be more cost-effective than paying huge intermediary fees to a company.
  • Workflow automation and rapid audits — We posit that Level 4/5 trucks will be incorporated into a workflow automation. At the moment, shipper and freight broker’s enterprise systems assign shipments for pick up and delivery to a truck (and the driver). If the driver is not there in a Level 4/5 truck, then those systems need to feed the shipment information to the truck’s system. The novel automation applications like dexFreight can treat Level 4/5 (or any other trucks) as an integral component of the overall workflow. The smart contract created for moving the shipment can assign a unique identity, create a digital bill of lading (anchored to blockchain) and transfer funds directly to the truck’s digital wallet (at the owner’s request) to purchase fuel and services. This will save the trucking companies (and shippers) the cost of administering fuel cards, reduce credit card transaction fees, etc. and reduce the time required to audit invoices.

Digital wallet in trucks can communicate with smart contracts for various logistics functions

Digital wallets in trucks can communicate with smart contracts for various logistics functions.

  • Other services — Prof Bhaskar Krishnamachari from the University of Southern California in this blog post calls the concept of autonomous vehicle’s ability to perform financial transactions a financial autonomy of vehicles — the world in which vehicles exchange non-traditional services (beyond driving) with other vehicles using vehicle-to-vehicle financial transactions. Such services can include exchanging battery power, providing data and algorithms to other vehicles.

What about Levels 1 to 3 trucks?

Before Level 4/5 trucks roll out of dealers, Level 2/3 automated trucks with drivers in the cab will constitute a significant portion of truck fleets. Deploying smart contracts for trucks doesn’t have to be limited to Level 4/5. These contracts can be deployed now in Level 1 trucks. All they need is a computer with a decent internet connection to connect with public blockchain infrastructure and an agreement between the parties (of shipment) that funds transfer and other information transfers will occur via a smart contract. Companies can do that now with dexFreight. For a foreseeable future, drivers and their phones will be the ones interacting with the smart contracts. In the future, electronic logging devices in trucks will connect to the smart contracts, since these devices are better suited for real-time tracking of trucks than phones. In dexFreight, drivers don’t even see smart contracts. Every time they interact with our mobile application, they are feeding variables into the shipment’s smart contract.

In Conclusion

We believe Level 4 or 5 trucks will have many non-driving functions to participate in the logistics workflow. These functions will require those trucks to participate by buying and paying for services. In order to do so, we posit that automated trucks should have wallets to interact with blockchain via smart contracts. At dexFreight, we will continue to study the economic benefits of embedding wallets to trucks and participate in the new economy. We also encourage others to do so. For now, we believe there is not enough return on investment to roll out trucks with wallets simply because use cases mentioned previously are still being built and the ecosystem is not yet ready for physical assets to persistently connect with blockchain.

Feel free to send us your thoughts and comments.

dexFreight is fundraising via crowdfunding on StartEngine. Learn more Here!

Rajat Rajbhandari, PhD

Written by Rajat Rajbhandari, PhD

CIO and Co-founder at dexFreight