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Q&A with CargoX Founder and CEO Stefan Kukman

Jan. 28, 2018, 10:46 a.m.

CargoX is a start-up with ambitions of revolutionising cargo shipping, logistics, and supply chain management. However, your competitors are building similar solutions. How is CargoX leveraging its competitive advantage to make its “Smart Bill of Lading” a reality?

We are a small, but very experienced and flexible team with diverse skills. Members of the CargoX team have been active in logistics for a long time. We keep things simple, involving just enough people to make our product easy to use and widely adopted.

There’s another important component to our success. Technology companies often lack the shipping and logistics expertise necessary to break into this industry. On the other hand, logistics companies venturing into the tech field may be held back by their reliance on established, old-school business practices.

At CargoX, we have industry veterans from both sectors. We’re also neutral partners, which means that logistics companies can plug-and-play using our platform, without giving up important data and autonomy to big companies that are working on their own solutions. With CargoX, you are always in control.

The solution is comprised of a distributed app, a document exchange protocol, and a governing body, which is currently being established. Can you talk about the response that you are getting from the industry?

We are in negotiation with shippers and logistics companies that want to implement our solution. Bringing these logistics companies on board is the most important part of our business development strategy – we are building the product for them, not for us! That’s why being market neutral is so important. Global trade data is very sensitive – and we need to establish trust with our partners. The next step is to demonstrate the viability of our platform with a test shipment that will set sail in Q2 2018, with an already agreed-upon logistics company and their clients. The test shipment will travel from Asia to the EU.

How easy is it for logistics companies to onboard your technology, and what are the associated costs?

We are working on delivering a painless procedure for companies of all sizes. Every customer will need to register and complete a KYC (Know Your Customer) process, where we will also verify NVOCC licenses to establish roles and permissions on the platform. Once companies register, they will receive their public and private key for signing the Smart B/Ls. This can be done in the Smart B/L distributed application provided by CargoX, or with the help of the CargoX Smart B/L API integrated into the company’s system.

Generally, the companies can start using the system within a day, and there will be online training provided, just to make sure everything goes smoothly. When the CargoX Smart B/L API needs to be integrated in the company’s systems, this might take a couple of days, or a couple of weeks, depending on the workflow of the company. CargoX will provide integration services as well, through a network or partners.

How are you working with financial intermediaries such as banks and insurance companies to make CargoX is a widely accepted platform?

In the near future, we plan to roll out other products connected to our Smart B/L. We are developing a Smart Letter of Credit. The shipping industry currently wastes billions of dollars on spending related to letters of credit, which are used in global trade as a payment guarantees. We will announce more details about the Smart L/C in the second half of the year.

You are using blockchain technology to digitalise the Bill of Lading. Does that mean all the documents will be stored online in the cloud? Is that safe?

All data will be encrypted and stored in decentralised storage (such as IPFS, Storj, or similar). These are much safer than centralised storage, as they use the same blockchain security mechanisms as the billions of dollars worth of cryptocurrencies such as bitcoin currently in circulation. Actual ownership will be traded (sent) in the same way people send tokens today, from one wallet to another. To date, and billions of transactions later, hackers have been unable to penetrate the security of bitcoin, and besides – all data will be encrypted as well. We are fully confident that our approach to security is several magnitudes stronger than the existing state of paper B/L transportation and storage.

Can you explain how blockchain technology eliminates the complexity of ports and shipping?

Freight spends a lot of time in limbo on docks and in warehouses, waiting for the Bill of Lading to arrive, usually by courier. By electronically transferring this document with blockchain technology, the document is always on hand. The cargo is released right away to the right party.

Nobody is ever waiting around for the right paperwork, which means that NVOCCs can transport shipments and release them to importers right away, because everybody has visibility of the Bill of Lading. Nobody is waiting for the courier ⇌– or paying for one – and the transaction is recorded as soon as there is a handoff.

Rather than wait for the right paperwork to show up, we empower the exporter, NVOCC, and importer to communicate directly, eliminating the possibility for lost or delayed paperwork, and there are no outside parties to clutter up the process.

How will you persuade shipping companies to join the CargoX ecosystem?

Actually, this is our primary focus. Given the regulatory complications surrounding shipping lines, we have decided to focus (for now) on house Bills of Lading – those are Bills of Lading issued by NVOCCs. The first step is to make our solution an industry standard. The Bill of Lading exists to establish the legal owner of the cargo, and the demand for that solution is with the NVOCCs.

Our Smart B/L lets NVOCCs offer faster service to their customers, reducing costs and other paper Bill of Lading-related pains. Importers and exporters will be able to request our Smart B/L from their forwarding partners. Once importers and exporters realise that they can save hundreds,or thousands of dollars and valuable time on each shipment, they will press their NVOCC partners to use our Smart B/L platform.

Will companies pay for the Smart B/L services with cryptocurrencies, or classic money only?

Our platform will support all the legacy payment options with fiat money, but as we are a startup based on blockchain technologies, we are working on implementing cryptocurrency payment as well. There will be various service levels supported, and there will be additional features and services provided to holders and users of our CXO utility tokens.

What’s your suggestion for companies that are interested? Where should they start?

We encourage them to contact us for more information. We would love to talk to as many companies as possible, and we’re always looking for more partners for testing and developing – we have CXO tokens on hand to share with our partners to get them started, which they may then use for Smart B/L transfers, or hold on to them while CargoX grows.

Other press releases

CargoX listed as a Cleantech 100 company
23 Dec 2020
Out of thousands of innovators from across the globe, CargoX was named a 2021 Global Cleantech 100 Company by Cleantech Group.
New partnership between CocoonFMS & CargoX brings costs savings and document security to supply chain management
10 Nov 2020
CargoX will be integrated into the CocoonFMS product CocoonTMP (Transport Management Portal) to allow 3PLs and freight forwarders customers to upload their documents securely using CargoX Platform for Blockchain Document Transfer (BDT).
CargoX utilizes the Matic Network for efficient real-time Blockchain Document Transactions (BDT)
2 Nov 2020
The CargoX Platform has connected to the Matic Network - a sidechain to the Ethereum blockchain - to provide even faster and more cost-efficient original document transactions.
Contour partners with CargoX to transform bills of lading
29 Oct 2020
Contour, the Singapore-based global trade finance network has announced its partnership with CargoX, the blockchain platform for transferring documents and data including a certified electronic bill of lading solution.
CryptoBLK and CargoX establish strategic partnership to advance global trade and supply chains
12 Oct 2020
CryptoBLK, an enterprise DLT/blockchain technology company, and CargoX join forces to streamline processes and accelerate digitalization in global trade and supply chains by integrating two blockchain platforms, Atlas Elite and the CargoX Platform.
CargoX competes among 12 supply chain semi-finalists at Pitch Your Startup
14 Sep 2020
CargoX will pitch at the Pitch Your Startup (PYSU) event held on 15 September in Luxembourg. CargoX is one of 12 semi-finalists in the category of Supply Chain.
CargoX's digital bill of lading allows Forward Together and Tech Cargo to ship with no need for physical documents
24 Jun 2020
Te newly established logistics network Forward Together has piloted a simulation with the freight forwarding company Tech Cargo to digitally expedite the ownership transfer process through blockchain in India's response to Covid-19.
Portall and CargoX join forces to help the Government of India digitalize the bill of lading processing and move all trade documents to electronic means of transfer
11 Jun 2020
India is digitalizing its bills of lading and other trade documentation workflows as one of the last missing elements within the country’s electronic Port Community System (PCS), built by Portall. Portall teamed up with CargoX for blockchain document transfer.
CargoX joins the International Association of Trusted Blockchain Applications
1 Jun 2020
CargoX has joined the INATBA global blockchain association to contribute in the joint effort to empower companies for better, safer, and transparent global business by harnessing blockchain technology.
CargoX becomes the first public blockchain (Ethereum) Bill of Lading provider approved by the International Group of P&I Clubs
20 Feb 2020
CargoX has been granted prestigious approval by the International Group of P&I Clubs. It has become the only approved provider whose platform operates using the neutral, public blockchain Ethereum network.

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