Will blockchain revolutionize the shipping and logistics industry at an affordable cost?
Will blockchain revolutionize the shipping and logistics industry, allowing it to move past inefficient legacy technologies by handing companies the keys to high-tech solutions, at an affordable cost? That’s ShipChain CEO John Monarch’s vision, and over the past year, his company’s platform has emerged as one of the foremost contenders in this burgeoning market.
ShipChain is a startup on a mission to revolutionize the multi-trillion-dollar shipping and logistics industry by utilizing blockchain technology. The company’s main objective is to make transport and logistics more effective, secure, and transparent.
Monarch’s approach is inclusiveness. That means getting small and mid-sized players onto the blockchain. Currently, the costs associated with entry and technology are still too high.
“One of the core principles of blockchain is inclusiveness,” Monarch explained. “Although building private blockchains is currently a very popular trend, we believe that it is extremely important that nobody is excluded – and private systems inherently do that. Everyone involved in the shipping process is important in this space – truck drivers, longshoremen, pilots, warehouse workers, you name it.”
We gave Monarch a chance to expand on these ideas, and to explain how it’s possible to provide extensive oversight of shipments across multiple actors without jeopardizing security. He explained how his company is tackling the biggest problems in logistics, by unifying track and trace onto one platform, improving visibility, adding accountability, reducing costs, and aligning the incentives of everyone involved, from drivers to shippers.
Shipping and Freight Resource: Can you talk about what defines ShipChain, and give us a brief overview of how far along development is and what we can look forward to?
John Monarch: ShipChain is an open blockchain platform and ecosystem that was created with the goal of solving the biggest problems that face the logistics industry today. We’re unifying track and trace while eliminating the need to involve third parties and added costs, improving visibility, adding a layer of accountability, reducing costs, and aligning the incentives of everyone involved, from drivers to shippers.
Development is going well and we are very proud of and excited about the progress we have made. Our four main smart contracts are currently live on the Ethereum blockchain, including LOAD, MARKETPLACE, PROFILE, and REVIEW.
This means all underlying functionality is live – and now we can focus on making it more user-friendly. For us that means working on the web platform to facilitate easy booking and shipping, the mobile app, and the unique Transmission API that will allow anyone with REST API experience to build on top of ShipChain.
What needs to happen to take blockchain based logistics software mainstream, and what is ShipChain doing to make its platform accessible to smaller shippers and forwarders?
One of the core principles of blockchain is inclusiveness. Although building private blockchains is currently a very popular trend, we believe that it is extremely important that nobody is excluded – and private systems inherently do that.
Everyone involved in the shipping process is important in this space – truck drivers, longshoremen, pilots, warehouse workers, you name it.
We recognize that – and these hardworking men and women play critical roles in maintaining the trust of the supply chain. Our first step in recognizing this is to tackle one of the most challenging labor markets in the industry – truck drivers.
We want to incentivize truck drivers by awarding portions of transaction fees to them based on various factors, including fuel efficient driving, on-time delivery, safe driving based on telematics, and honesty of reporting. We believe that this will boost transparency and increase accountability.
ShipChain’s platform increases accountability, and forces carriers and forwarders to justify the prices they charge for services, while holding them accountable. That might worry some companies, so what would you tell them about the payoff of adopting your technology, what’s in it for them?
We realize that brokers and forwarders are still very important to the industry as they provide a personal relationship and interface. While our technology does allow for disintermediation, we would like to invite brokers and forwarders to build on top of ShipChain. By working with us, they would be able to reduce their overhead, provide improved service to clients, and keep up with the most important technology that the logistics industry has encountered since containerization.
Supply chain managers have their hands full dealing with the current market volatility and threats of trade war. That’s requiring increased agility and visibility. Where does ShipChain fit into this scenario?
ShipChain is apolitical, but our goals of facilitating freight movements, enhancing visibility, improving ease of booking, and reducing the costs involved are important in any climate. Restricted trade climates often can increase the regulatory burden put on shippers, so the ability to have increased efficiencies in documentation and visibility into specific shipments with innate trust is key.
Can you talk about where ShipChain fits into the field of new blockchain based logistics products out there? What makes ShipChain stand out?
We are taking a holistic approach with a blockchain solution – specifically, there are others out there working on individual problems that affect shipping and logistics (domestic only, bill of lading management, etc.) but only ShipChain is working on the entire supply chain from end to end.
How does ShipChain head off the threats of cargo theft, lost freight, temperature excursions, and the myriad of other threats that shippers face?
By combining the immutable record of the blockchain with IoT, the amount of data that can be kept and preserved will disincentivize fraud at all parts of the chain and provide shippers with easy access to information about their shipments.
A great example of this are low cost temperature sensors that provide zone temperatures within a truck or container for instance, even if there is a temperature excursion, the ability to identify that only a portion of a container or truck was impacted as opposed to the entire load based on a single sensor will be monumental. Additionally, having record of that to show any sort of overseeing body that part of the load was indeed salvageable will be equally important.
Can you talk about the more general impact that ShipChain’s platform could have on the shipping industry, and more broadly, how you expect the industry to transform as new technology like yours becomes widely adopted?
We see blockchain as a catalyst for the entire shipping and logistics industry to finally move past some inefficient legacy technologies and reduce the cost and burden of participating in high-tech systems as a whole. Inclusiveness is the name of the game, and right now, many new technologies are either extremely cost prohibitive, or have such a high technical barrier to entry that smaller fleets and participants struggle to keep up. We also see the industry’s adoption of blockchain technology as a big step in finally moving past the extremely dated EDI, which has been around since 1947 and is showing its age.
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