Does a blockchain startup selling $7M of tokens in an Initial Coin Offering signal the end of the paper-based Bill of Lading?
Slovenia based shipping tech startup CargoX raised that sum in just 7 minutes and 40 seconds to support its development of a new blockchain-based Bill of Lading platform it is called Smart B/L.
“CargoX is moving fast,” the company said in a press release. “By the end of Q2 CargoX will offer shippers and a global network of logistics companies access to the blockchain-based Smart B/L, allowing them to transfer bill of lading ownership in a secure and nearly real-time manner.
TheCargo X Smart Bill of Lading is explained fully on its website. Whether the company has more or less chance of success than the many other blockchain start ups now focusing on shipping and logistics is a more difficult question, however.
With many of the top 10 carriers that control over 80% of global container shipping now having their own blockchain initiatives in place, it is pertinent ask whether there is any room in the market for the service Cargo X is offering?
Explained to WorldCargo News by Stefan Kukman, Founder & CEO at Cargo X, the problem with the blockchain initiatives carriers are developing is that they are not neutral. “We don’t see how a company such as MSC would choose to use a Maersk or ZIM ‘blockchain’ product. Their data is just too valuable and sensitive”. Kukman also noted that some of the carrier solutions are wide initiatives involving Customs, and “we don’t anticipate Customs in Russia, China, Brazil, etc mandating or recognizing carrier solutions”.
For these reasons CargoX has focused on the B/L exchange, and “Blockchain makes this process as easy as sending money via internet banking,” added Kukman. The platform can also support other data: “We see Smart B/L as an open digital platform. It securely communicates essential information with other 3rd party providers, such as tracking, temperature recording IoT devices, verification of shipment origin, etc.” The company is also working with a yet to be announced partner on digitising the letter of credit as a smart contract on blockchain.
Cargo X has ambitious goals, and in a white paper it notes that "The first step is to make our solution an industry standard”. Kukman does not think this is unrealsitic, as its blockchain B/L “will be market neutral for all NVOCCs to use - without fear of revealing any confidential information to their competitors”.
As the number of blockchain initiatives proliferates the need for standards has been raised. The Blockchain in Transport Alliance (BiTA) was formed in August 2017 to address the issue and now has over 200 members. Kukman said CargoX is considering joining, but there are other paths to becoming a standard. “At a later stage, Smart B/L and CargoX can become a DAO, a truly decentralized organization where forwarders/NVOCC’s make the rules,” he said, referring to a decentralized autonomous organization (DAO) that operates through rules embedded in computer programs.