The tide is rising for logistics to pull ahead

The tide is rising for logistics to pull ahead

September 8, 2018

This blog is about the rarely mentioned, yet noticeable trend of resistance to the momentum of tech innovation - a subject not often discussed. It is sometimes unimaginable that particularly the transformation of job descriptions in light of increasing digitization, especially at the hands of the ‘disruptive’ blockchain, could even be an issue. But it is!

Working under the banner of CargoX proves to be quite a dynamic position; this is something that all team members, old and new, find out at eventually. The two distinct areas of interest, namely logistics and blockchain, both call for a wide range of experience from any new possible recruit to our ranks. But the industry also calls for in-depth knowledge of socio-political contexts in various regions so as to be able to advise on the implementation of new technological solutions in the best possible way.

Many project managers do well in traditional tech start-up firms, but very few have a working knowledge of blockchain technology, even though the reality of blockchain relevance and implementation is clear. Both in software development and in the project/product management for blockchain-related startups there is a big gap in actually available human resources, which is filling up to really drive innovation forward with noticeable momentum.

And logistics itself is so broad, embedded into some very strongly rooted practices of decades or even centuries past, coupled with a newly emerging field of blockchain technology, which interconnects things in such a way as to create entirely new job profiles.

One of the things that make working at CargoX dynamic is the fact that team members, such as business developers and project managers, will travel quite a bit, not only for a specific business, but also to attend conferences in logistics, maritime matters, and port conventions of all kinds.

Along the way, they meet a slew of highly accomplished people who, on a personal level, have much to say and propose an idea, a question, an inquiry about our product/service. Of course, as a team member, you should really believe in the product, but you must also be knowledgeable about your product and have answers at hand for whoever asks you about it, at any level of the business hierarchy.

Now, just imagine a team member representing and explaining our product, the Smart B/L dApp, with all its underlying and surrounding logic. This product is an amalgam of two very complex fields, both of which take a lifetime to master – logistics and blockchain-based software. The product is essentially very bare-bones, which is why it is so easy to believe in and get behind: it’s a Smart Bill of Lading – the smartest and easiest there is! I mean, it should not come as a surprise to anyone that we as an industry would eventually make digital ledgers so good that sending the Bill of Lading documents literally by hand and on paper would become obsolete, as it should have become decades ago when the internet was introduced.

And this is what it comes to – a team member demonstrates the product, it simply works, the UI is beautiful, if compared to other business software suites, there are no visible hiccups to make a fuss about, the claims about the tech superiority are valid and legitimate. The product is mature enough for adoption. Perfect! After the presentation there is mingling, sitting at tables, and discussing the new opportunities, the value, business propositions. Praise for the product!

Among the crowd, a manager of a big company, based in one of the African countries, states his point along the lines: “So, your Smart B/L… like many other digital innovations, this is destroying the jobs of entire established industries. You really gain nothing from implementing this innovation. Why not have something that works already, and keeps jobs in place, rather than push a sterile product that does society no good?’

Now THAT’S what I call a challenging position for CargoX team members to find themselves in. When all is going well, any employee is seemingly able to contend with the tasks at hand, but in precarious situations as a firm you need people who have that ad-hoc ability to muster up a ‘solution’, and fast. So, how do you respond to this? Of course, for someone young and tech-savvy, it is not hard to invoke some rationale of how this same argument of technological complacency is used across the spectrum of tech innovation, from assembly automation hitting factory laborers to centralized mass production displacing small competitors, even Amazon taking the bulk of the retail market with little to no regard, leaving a trail of success to be emulated and discussed at colleges of economics.

But a conversation like that needs to be measured … The challenge is to be sensible and non-hostile, always treading lightly, leaving open doors. You can’t simply blurt out: “Oh well, we will most likely displace your jobs, it’s just business.” This is not even the case, really. The middle road approach is always best in such situations. Our solutions are not about taking away jobs, but about optimizing processes and costs, building trust, and putting the power of the blockchain into the hands of employees everywhere. It is up to the management of the companies to decide how to use the human resources that become available. There is always plenty of work waiting to grab someone’s attention, and there are new job descriptions and positions arising.

So an answer that is built on building a new vision of the company’s tactical operations is always welcome to have at hand: ‘Indeed, digitization is disrupting many established practices, I fully sympathize with that notion, sir. At the same time, I am a living example of how new jobs are created in the process. You are surely aware of how, as since the industrial revolution humans have found more efficient ways of doing things, and to stifle this human ingenuity makes no sense, as I’m sure you would agree? But regarding the Smart B/L, this is not a very strange concept and literally, anyone is free to create something like it in the free market economy. And your employees, or your company, can, too!’

I intentionally put this rhetoric, this whole story, in a meta-narrative. I don’t want to unambiguously say that this actually happened (or didn’t happen… who knows?) But I want you to imagine, just imagine a conversation like that, and the general discussion surrounding it.

CargoX offers a product, together with the service of providing a Smart B/L solution for our maritime clients, which is characterized by a much greater efficiency than traditional means of document handling and transportation. It is as dramatic as replacing paper, made of trees, with one of the most advanced public digital ledgers known to mankind (the Ethereum Blockchain), and replacing the speed of fossil-fueled transportation means with that of digital currents racing through cables and the air. We make this possible through the use of technology we by no means invented, but eagerly employ the blockchain, which can be understood as simply a ‘secure internet ledger, available to all people, with the ability to securely transfer digital asset ownership’.

You see, the now ‘classic’ internet had drawbacks, design-fault backdoors, which made it only reasonable for companies like the one hypothetically mentioned above, to say for decades: ”We better do this the old-fashioned way since it’s really important to ensure data integrity!”

And they were absolutely right! Printing the B/L on paper and transporting it through customs with the tightest control possible proved to be a sound strategy for many transportation services, so they could provide data integrity and contingency plans for something as important as a B/L document, even though it was (and still is) slow and expensive.

But every now and then, something occurs in a society that completely reinvents established processes and makes a mockery of them at a fraction of the effort and cost. This is where the public blockchain enters, and finally, a legion of digital startups is able to claim: “This thing is unhackable… nobody has yet tampered with the blockchain itself. This is everything the internet wanted to be.”

And in the case of at least the last five years, this new era of innovation had started to dust off the past protocols that were built on the assumption that digital services are ‘untrustworthy’, and so startups of all kinds started to rethink digital solutions in light of this new technological discovery.

This is what we do at CargoX. In the process of this greater trend of digital innovation, we are stepping on a few toes here and there. And the idea itself being so rudimentary while technically complex and far-reaching, we firmly stand behind it with confidence, even in the case of traditional jobs indeed being displaced by it – and the people getting a chance to transform their work effort, to add value with something else.

Energy consumption is also a factor of consideration. We feel that energy-saving solutions should, by any rational assessment, supersede energetically costly solutions. If a solution is more time and energy-efficient, should it not also be subsidized by global governments? I feel like we should be talking about a carbon tax on petroleum and coal industries, rather than condemning innovation on a front that aims to reduce overall carbon emissions by increasing digitization.

Our Smart B/L has reached a point of maturity. We feel it is a natural evolution of a real-world process, and that the industry should adopt its use.

If a product is vastly superior to any other competing offering, in the current economic environment, nothing can stop its market dominance. In the business of B/L documents, it could be said that providers of the old-style service still hold the vast majority of the market share, but certainly not because they have the superior product/service. We want to change that and help them grow with the new added value!

Today there is a clash between traditional economists and more post-modern mavericks. The established logic of business success and viability is changing. I would like to summarize relevant insights of one of the most prominent new economists, Ronald Coase, a Nobel prize winner. He says that a company is essentially:

- An efficient pocket of ‘command and control’ in a chaotic market economy

- Companies are ‘efficient’ because data gathering and decision making have costs

- If that cost changes, companies get smaller.

This is all that CargoX really aims to do. We are not here to ‘disrupt’ the market. We merely introduced a cost-efficient solution, together with a command and control center to manage the intricacies of adoption and associated service.

We deal with the underlying architecture, securing the smart contract protocol, covering Ethereum Gas costs, while providing impeccable customer support, and much more. We have reduced the cost of B/L processing to its near bare minimum – while providing the highest possible level of security, speed, and efficiency, based on a bullet-proof public technology, reviewed numerous times in the past years by top security and encryption experts.

Not only do we have a first-mover advantage. Our expertise – notably that of Stefan Kukman, founder and CEO, who has extensive knowledge in logistics and cargo shipping, Igor Jakomin, Ph. D., who is an esteemed academic in logistics, coupled with Patrick Vlacic, Ph. D., maritime legal expert, and a team that brainstorms all scenarios and use cases daily, together with industry partners, to make sure all areas of concern are covered – puts us in a unique position of confidence as the de-facto leading digital Bill of Lading service provider. And we only got started in Q1 2018! The timing and the market are in our favor.

The tide is rising for the tech-savvy logistics companies to move forward into their optimized future!



Marko Filipovic is CargoX Business Development Assistant and a Master Engineer of logistics and management in the maritime industry


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