We spoke to John McCaffery, Founder and CEO of CargoConX, about the future of cryptocurrency and how CargoConX is using blockchain to streamline transport logistics.
The logistics sector – worth €2.7 trillion per year in Europe alone – has faced massive pressure in the past few years, being forced to adapt to profound changes in consumer habits, like our newfound love for online shopping. All the signs point to this pressure continuing to pile on, forcing companies to be forever updating their working practices, business rules, IT systems and B2B operations. Most of this behind the scenes activity – costing millions every year – is aimed at one thing: the ‘holy grail’ of efficient partnership. The CargoConX Blockchain-logistics platform which we believe will revolutionise the global supply chain, making it extremely quick, clean and simple for logistics businesses to co-operate. Our platform will allow transport and logistics companies to Uberize their spare capacity while providing shippers on demand best price availability, increasing efficiency and profitability and utilising the blockchain for ownership accountability and payments.
Can you tell us a bit more about CargoConX?
CargoConX is an idea that came out of many years of working in the transport industry, particularly in transport logistics, writing software solutions for various sizes of organisations and effectively doing my day job. Over the last four or five years I’ve found that we were solving the same problems over and over again, especially when it became apparent that companies are moving much more towards sub-contracting and gigeconomy models for the peaks and troughs, as opposed to having a large workforce on the books all the time.
If a large organisation has some seasonal capacity, they will contract the work out. To be able to do that, there need to be solutions in place to make sure that compliance, ownership of the job, paperwork – all the elements that are required for their customers and for them to ultimately get paid – are followed in a consistent manner across the supply chain. So, this is a solution that we’ve been involved in developing for various different companies – allowing them to collaborate and share information in a quick, efficient, cost effective way. The problem is that different companies may do the same thing, but they don’t do it in the same way in terms of compliance. That’s the main reason we came about – to make it easy for companies in the space to form a supply chain, to work together and make sure the companies they work with are at the right standard.
To put it as simply as possible, what we’re looking to do is Uberise business to business transport logistics, so that transport companies can get workforce on demand and share work between each other; and big shippers and manufacturers can access that element to get the best price in real time for their shipment.
One of the other elements we’re looking to solve is the payment problem within the supply chain. If you’re a small contractor working for one of the guys in the chain, you might have to wait 90-120 days for your money, and you’re the guy who needs it the most. So we’re putting escrow payments into the blockchain platform that can turn that 90 day period to almost payment on delivery. Using the full solution, the guy who’s doing the final delivery will be able to sign off his job, get offered additional work and get paid all at the same time – that’s the vision and that’s where we’re heading.
Why did you choose a token sale to fund your business?
There were two reasons – one was to raise funds to continue development. Another reason was that our platform runs on a credit-based system. We had a look around at the various methods of doing that and we decided to launch our own token, which will run on the platform.
The token sale is one aspect of the business, and the other is to get a token out in the wild, so to speak. Because of the way our platform works, we don’t sell tokens directly – the tokens will be on the Stellar blockchain, and every transaction on our platform will requires a certain amount of tokens to make it happen. That will be dictated by the marketplace, when the system goes live. To make that work, we had to get our tokens out, so that’s another reason for the sale.
Who are the main beneficiaries of the business?
The whole supply chain. For larger organisations, it’s not cost affective to have hundreds of drivers on their books throughout the full year, because the industry works in high and low seasons. It’s become a lot more stable in the last couple of years with online shopping and the ‘I want it now’ economy, so for larger companies, our platform takes the headache away from them in terms of maintaining a large workforce – they can have a workforce on demand through the platform.
For smaller transport organisations, we allow them to have the infrastructure in place that the big boys have at a fraction of the cost. And independents – small guys in a van who are delivering every day, they don’t have a lot of time to be looking for additional work, so the platform is designed effectively to feed them work directly from the marketplace.
There are benefits for each individual user case.
Do you think your background stands out in terms of blockchain related startups?
I have been programming software solutions for transport companies in the UK and Europe for 20 years now. I started out as a junior programmer, then a senior programmer, then a systems architect running teams and companies of developers, all within this space. So, there’s not much I haven’t seen in terms of solutions in the transport logistics sector – that is where my expertise lies.
The rest of the team have various degrees of experience in the industry. Some of them have even more experience than me and some are providing solutions and resources for major organisations, so I would say the team is second to none with what we bring to the table technically and in terms of industry knowledge.
What is your opinion of the ecosystem as a whole?
Well, it’s a brand new sector. The technology is 10 years old in terms of cryptocurrency and bitcoin first coming in. It reminds me of back in the 90s, when I started, and the start of the internet age, where email and websites were just being pushed to businesses and they didn’t know why they needed them. It’s similar in that we know the technology is big and it’s going to change society in a big way, but we’re still figuring out how that would work. We’re looking to start putting it in to real business solutions, real world solution and testing it against business practices and workflows. Cryptocurrencies are here to say – it will be exciting to see what will happen in the next few years.
Is negative press a hindrance? Will it have an effect on what you’re doing?
The simple answer is no. Negative press is just negative press. The way that I look at it, it’s coming from people who’ve been resistant to this sort of technology anyway. Also, a lot of people don’t understand it. Usually when people don’t understand something, they are negative towards it until they do. I think it’s a good thing that’s it’s getting spoken about at the highest levels. It’s on everybody’s agenda in all the right places, so we just need to see what legislation comes and hopefully it’s not too stifling, it allows the technology to evolve and continue to advance.
Tell us about the way you use different technologies and where you are planning to go in the future.
We have the escrow contracts which are currently in place on the Stellar network. We’ve got track and trace – we’re looking at a private network for that. In the future, I do see us going into other modes of transport, so we’ll be looking at shipments and air freight etc.
We’re focusing on UK and Europe at the moment, because that’s where the team has the most experience in terms of the movement of goods, but we see this as a global platform. We’re looking at the US market early 2019, and we will pick and choose territories to launch prior to that. A worldwide platform which includes multiple modes of transport – that is where we’re going.
Do you think any market will be a particular challenge?
The challenge is always there with any sector. There are a number of other companies who are looking at the global shipping side of the ICO market and blockchain, but it’s whether they have a bigger market share. Maybe in the future we will have to make strategic partnerships with these companies to tie into our network. We can’t know until further down the road. We are focused on where we know we can get traction and where the solution we’re putting in place is needed for the sector.
What do you think the challenges are for the cryptocurrency market as a whole?
Regulation from the government and various different countries.
There has been a lot of negative news, and I think that is due to the unexpected explosion last year with the bitcoin price and the various other coins that went with it. We just have to watch this space and make sure we are working within the proper frameworks that are already in place, even though there is a lack of regulation.
As I said, we all know what happened at the start of the internet and look where we are now – no one can live without it. I see a similar thing happening with cryptocurrencies and the blockchain.
You’ve touched a bit on the 90s vs. now. How do you think things are different now from when you started out?
Everything is instant now, that’s the way the consumers are. Everyone has a smartphone and access to information. When I started out, we had a dial up modem – very slow. I remember the first internet connection you got – it was crazy. The pace of technology has changed – who would have though 10-15 years ago that you could get a phone that is more powerful than most desktop computers, and you could get access to anything on it?
The young generation now does everything online. That’s what fuelled the growth in the transport sector in the last 5 or 6 years – the explosion in online shopping, the convenience of getting things delivered. It’s only going to increase as time goes on. Kids today have grown up always connected – it’s how everything will be in the future.
DISCLAIMER: THE ABOVE REFERENCES AN OPINION, AND IS FOR INFORMATION PURPOSES ONLY. IT IS NOT INTENDED TO BE INVESTMENT ADVICE.