"I am sure that blockchain will soon become the new logistics standard" - Yakov Glushchenko, Cargo.tech founder.The development of a blockchain is often associated with the benefits of the crypto-currency business. In addition, the mechanism of a distributed database can solve purely technological tasks - for example, as in the case of the Cargo.tech logistics marketplace. We have met with the general director of the company Yakov Glushchenko and talked about his business and how the blockchain can help in the organization of cargo transportation.
My father was involved in transportation the business. During the USSR, many Germans lived in Kazakhstan. After the empire disbanded, many of them emigrated to Germany, the demand for transportation of goods was large, so my father started his own business. Prior to Cargo.tech, I started two businesses - one of them was staircase production, another - energy saving, which have been working successfully so far. For the staircase business, we often used third-party carriers services. Once we urgently needed to transport oversized metal parts, and I asked my colleagues to find a transport company in Moscow. Half a day later they reported that they did not find anyone. I said, you must be kidding, and sat down to look by myself. Surprisingly but for two hours I really could not find anyone . At the same time, I clearly understood that somewhere near there were drivers with trucks and no orders, and there was me at the other hand, who needed to transport goods, but I could not find the carrier in the search system. In the end, of course, we found someone, but simultaneously we came up with the idea to develop our own cargo transportation business with geolocation and mobile application. We started to develop this idea, and it gradually led to Cargo.tech. First we launched in Russia, then proceeded to India. We selected Tel Aviv for expansion and eventually started up in Israel too.
- What is the essence of your business?Cargo.tech is a decentralized logistics platform that allows a client to find transportation for cargo. Today we work in three markets: Russia, Israel and India. Our advantage is that, we are able to find the right vehicle at the right time, and also optimize the transportation process. For example, now we are discussing a system with the Israeli Ministry of Transport where one vehicle will deliver food to several food stores in the same area. Currently, each store orders their delivery trucks separately despite the fact that up to 40 percent of the cost of products - is the cost of logistics. The Ministry of Transport of Israel is ready to help us finance of such a service, because it sees the state interests in it.
- Why did you decide to enter the ICO?We had only 60 thousand dollars to start our business in India. We thought it was enough. But in fact, to make a project like ours successful, we needed much more. For a logistics marketplace, it is necessary to attract many drivers and customers at the same time in each city. In the case of India, we realized that we do not need to start in cities, but districts. For example, Delhi is so large that it is simply impossible to carry cargo across the city. Attracting only drivers or only customers is money thrown to the wind, because if drivers come to the platform without enough orders, they leave. Attracting those and others - is expensive. So far, we have been using our own money to develop business, but this is not enough. The reason we are pursuing an ICO is that the blockchain is technologically ideal for logistics. An operation tracking system is built on the basis of the blockchain, thanks to which the order can always be found in the archive. Deep machine learning technologies replace the dispatcher, automatically distributing orders between drivers, optimizing idle runs and vehicle loading percentage. Due to this, we save up to 45% of fuel, money and time. In the future, we plan to create our own blockchain system. We plan to do it on the basis of Hyperledger Fabric. It will also be an open, decentralized platform on which other teams can also create their logistics projects.
- How exactly this platform will work?We would like to make transportation not only available, but also transparent, so that we can track the cargo at every stage of delivery. When I was a child I remember my father told me a story he witnessed on the Polish border. In the parking lot among other cars that had problems with documents, was a new Scania refrigerator truck, filled with chicken meat. The father and son driving team who leased the truck, found out that cargo was traveling on forged documents, when they were detained at customs. They stood in the parking lot for over a month, unsuccessfully trying to solve the situation. During this time they ran out of money and fuel, which they burned to keep the proper temperature for the refrigerator, then meat in the truck began to deteriorate and smell. At the same time, they lost other orders, they had to pay the lease for the truck, and finally they were threatened with a real prison sentence. In the end, the elder of the drivers could not stand it any longer and committed suicide right in the truck. The story is terrible, therefore I remembered it. This scenario is avoidable due to the blockchain: when all documents are verified and tracked, all stages of transportation are recorded and visible to the sender and the receiver, then such situations are impossible in principle.
- What kind of problems the blockchain can solve?The first is the workflow. Now signing of the act takes a lot of time, so everyone is used to waiting for the shipment payment for more than a month. We do it in 15 minutes. There are real examples when, during the outbreak of viruses, it took two months to confirm the information about the source of the infected product. Blockchain allows you to find it out in 5 minutes. The second is insurance. When the scoring system of the insurance company sees, in addition to the documents, the entire history of drivers' transportations, then a priori they can have more confidence in this information. We pay less for insurance, and agents can automatically create individual packages for each driver. Not so long ago, such large insurance companies as Allianz, Aegon, Munich Re and Zurich, created the alliance Blockchain Insurance Industry Initiative and now translate all their data into a single blockchain system. The third is the problem with cargo loss. Usually, when more than 5-7 companies are involved in transportation, it is almost impossible to find out where exactly something went missing. We do cargo tracking.
- Tell us about your token. How it will be technically implemented?- Our token is Cargo. Now coins are issued on the Ethereum platform. But there are disadvantages for commercial use. In business, there are times when excessive openness is not always good - for example, when it comes to the volume of cargoes or their value. Also, with the growth of the Ethereum rate, the cost of each transaction on the platform also rises in the same proportion, and almost all forecasts say that the rate will continue to grow. So now we are developing our own blockchain system based on Hyperledger Fabric. This platform is more suitable for the corporate segment. There, for example, you can differentiate access rights, avoid the need for mining and completely build business logic for your request. The consortium of this blockchain is thorough: IBM, SAP, Hitachi, Huawei Technologies, State Street Bank, etc.
- What will the mechanics of the token look like? How can investors make money on their investments?Immediately after the ICO, Cargo will become the means of payment within the system itself. This will help to save on exchange rates for international shipments and will make the value of coins independent of currency fluctuations. In addition, even at the launch of the project, we want to introduce a bonus system for drivers, and with tokens it is very convenient. Depending on their rating, the driver will receive additional incentives, which then can be capitalized. At the same time, we are introducing Cargo to the stock exchange, where customers can also buy it. Accordingly, as the project grows and opens in new cities and countries, the demand for a token will grow, which means that it will increase in value. Therefore, investing in us at the ICO stage is very profitable.
- Can you name three reasons why investors should invest in Cargo.tech?- Of course! First, our main advantage is that our business model really works. It's not just a concept on white paper, as it happens in most ICOs. We spent money on testing and collected all the necessary data. Second, we allow clients to effectively optimize their transportation logistics, therefore, saving the client time and money for fuel. And this, by the way, means less exhaust pollution in cities. Third, we have great ambitions. In most places where we started to work, we were the first. And we succeeded. We created our own blockchain, which, I am sure, will become the new standard in logistics. We are open to all innovations, if they allow us to make lives better.
The interview was conducted by Julia Kuzmina
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