ConsolFreight has released, at the IoT Solutions World Congress in Barcelona, a new Proof of Concept (PoC) report entitled ‘Trade Forward’. The underlying project has the support of telecom giant Telefonica – which provided connectivity through Kite, its IoT connectivity platform. The PoC collaboration included EOS Dublin (using EOSIO blockchain technology), the Florida Blockchain Foundation and Anova Marine (which provided insurance coverage to the transported cargo).
“Banks are short-sighted in determining and validating the value of the goods being financed. They have drawn a very distinctive line between Logistics and Financial institutions, where the value of the assets is entirely disconnected from the process. Thus, leaving an untapped market of unfulfilled credit demand estimated at $1.6 trillion,” says ConsolFreight’s CEO, Ernesto Vila.
The ConsolFreight PoC business model and objectives
The Proof of Concept aims to:
- provide liquidity
- create new revenue streams
- advance the role of freight forwarders participating in a supply chain.
TradeForward offers a new business model of collaboration among:
- insurance companies
- financial institutions
- logistics providers.
The model, where the freight forwarders are the centerpiece, hopes to bring these benefits:
- financial inclusion of SMEs
- oversight of trade asset movement
- streamlining of data exchange between multiple participating parties
- risk mitigation and redistribution along a supply chain
- optimisation of operational liquidity – for both exporters and importers
- decreased paperwork and institutional bureaucracy
The PoC
The PoC test included experts in:
- blockchain
- logistics
- supply chain management
- finance.
Members of the ConsolFreight ecosystem are conducting pilots with companies like Telefonica and Anova Marine. These partnerships aim to enable smaller players to obtain access to larger organisation solutions, thereby generating ‘technological inclusion’.
Freight forwarder Tech Cargo handled the first TradeForward shipment (in the North America region). Additional shipments will be carried out by:
- Freight and Transit Co LTD – to enable non-traditional trade finance in the African continent
- ADEKO Enterprises SA, Globalog SA, and Tree Logistics for LATAM.
Enterprise Times: what does this mean
ConsolFreight, founded comparatively recently in 2016, is a collaborative platform using technologies such as blockchain and IoT to help improve logistics and supply chain processes. It aims to harness traditional freight forwarders with solutions which enable better:
- customer experience
- collaboration with others
- competition against bigger players in the industry.
The ConsolFreight objective – technological inclusion – is a worthy one, especially for smaller business which might find themselves locked out of many of the larger supply chain/trade finance initiatives (Batavia, komgo or Marco Polo, for example). Yet, as the Forrester 2020 blockchain predictions forecast, the real challenge will be persuading vendors of supply chain and trade finance networks to interwork.
