Entering $13 Trillion Freight Market, “Horizons Are Limitless” for John Monarch’s ShipChain
The freight and shipping industry is mammoth in scope, with an estimated value of $13 trillion, and one of the world’s oldest, dating back to the first time one group of humans figured out they could trade with the group in the next valley over. By some estimates, the shipping industry encompasses 90 percent of everything we buy today.
John Monarch knows this better than anyone. As CEO of Direct Outbound, a company specializing in third party logistics and fulfillment services, he’s well-versed in the logistical problems experienced by freight as it moves across the world via air, sea, and land. And as CEO of ShipChain, a company working to put the freight and shipping industry onto the blockchain, he knows how to fix it.
The Current State of Freight
To get an idea of industry transformation, let’s use the desk chair you’re sitting on. After you hit the buy button online, the seller sent the chair to a port, where it ended up on a container ship along with a hundred thousand tons of other goods. From there, it was unloaded at another port, placed on truck, train, airplane, or a combination of all of them, and delivered to your doorstep. Along the way, numerous things might have gone wrong:
1. A broker mediating between shipper and carrier institutes a 30% fee for connecting the two parties. The broker purposefully keeps shipper and carrier from interacting with each other in order to preserve his business.
2. During its journey, the container ship takes a longer route than necessary, delaying arrival time, or passes through dangerous weather, but no one knows this because of the lack of track and trace.
3. The chair is damaged as it changes modes of transportation. Because shoddy records are kept, it’s almost impossible to discover where the damage happened and hold the guilty party accountable.
4. Because it’s almost impossible to find out who’s responsible for damaging or losing a product, the bad actor continues to be used in the supply chain, causing further problems down the line.
The ShipChain Revolution
Under ShipChain’s platform, the trip goes a lot smoother. Since the blockchain removes the need for a third party mediator, the cost goes down in the absence of the broker fee. Every time the chair changes its mode of transportation, a smart contract on the blockchain registers the hand-off, creating a permanent record stating the product is on its way and in proper condition. Both merchant and customer can access this information at any time if they wish.
Adding to security, IoT sensors placed inside the containers monitor for potentially damaging situations and upload the data automatically to the blockchain. If anything goes wrong, records show who is responsible for preventing them from deferring or denying blame.
Monarch notes: “The smart contracts are finished, and underlying functionality is operational. All that remains is fine-tuning the user experience and implementation. If and when the industry decides to make the leap from past into future, ShipChain is ready to lend a hand.