Hector Hernandez and Rajat Rajbhandari first met one year ago—at the very first BiTA meeting in November of 2017. Even while their product is still in what is called the minimum viable product stage, so much has happened in that year, it’s a cause for celebration. One such example is completing the first ever truckload shipment using blockchain from end to end. But for all the celebration, they’re also calling for more collaboration. They want the community to realize that blockchain is for them. As FedEx business fellow and blockchain strategist Dale Chrystie frequently asserts, “Blockchain is a team sport.”
Hernandez comes from the logistics industry as a broker, “and immediately had all these ideas for how to use blockchain.” He says, “Rajat had the difficult task of explaining blockchain to a lot of people who had no idea what it was.”
They registered the company just two months later in January 2018, and then spent the next six months writing their whitepaper. Those six months represented the culmination of a shared vision.
“One thing is to have the idea, but it’s very challenging to explain the concepts. You have to be technical enough to explain the blockchain to the tech guys,” says Rajbhandari.
“It’s also a community. You want to share it with the carriers and shippers,” adds Hernandez.
“We also peer-reviewed it with a lot of partners. We even had a Rutgers professor edit it,” says Rajbhandari. That professor now sits on the board.
“From the blockchain world we worked with a lot of companies. CoinFabrik in Argentina is working on a proof of concept, and everyone is asking things like how soon can we deploy this stuff,” says Hernandez. “Our mission is about decentralization and collaboration and trust. This is very different from the private blockchains we see,” he says.
“You want to store documents in a decentralized environment, and while you might be able to do that other parties are still writing the protocols,” says Rajbhandari. “Our philosophy is not to reinvent the wheel if the protocols are already out there. Like a stable token as a fuel for the platform. Do we build our own or use somebody else’s? The token models have several challenges. The industry doesn’t know anything about it. Then they need to be stable in value.”
“So far we’ve got insights from the community, but we still aren’t ready to move with it,” says Hernandez.
They finally decided to build it from scratch, and then tested to see what’s best for the community of owners.
“There are three models for the token approach, and we’re deciding what the model is,” says Rajbhandari. “We need to make sure whatever we adopt is sustainable. We’ll know through testing. While there may be plenty of interesting tech, it doesn’t mean it will all be adopted. The owners of the platform (shippers, carriers, and brokers) will deliver the proof of concept value.”
“We’re looking for decentralized ledgers. Whatever works we’ll adopt. Will it be Ethereum or RSK [Rootstock, which is building a sidechain]? Since all of these technologies are new, they’re also evolving. We’re going for an agnostic ethos,” says Hernandez. In other words, something universal that everyone and anyone can use.
“We’re working with asset-based carriers and 3PLS and shippers. What is the role of the 3PL? Will the 3PL be removed? I get asked that question a lot. 3PLS should join very early and learn the model. There are some that can actually create value. They’re not just middlemen. You hear a lot about ‘removing the middleman’ and that’s not necessarily true. I come from a broker background and understand this side of things thoroughly. We also believe in business relations, and that’s what they also provide. Experts on demand is another thing we’re working on. Who manages the mistakes for instance?” says Hernandez.
There’s been a lot of learning from the smart code programming aspect of their recent blockchain trucking project. “We learned how the payments work. We learned how people on the floor worked, how they exchanged documents, how they use mobile apps, how they go from door to door. All these little things,” says Rajbhandari. “From the tech side it was making sure we could simplify the process and trigger the smart contract from these external events. From the shipper’s side, it’s simple to use. Blockchain should be working in the background,” he says.
Hernandez nods his head in strong agreement. “It’s an invitation to the community not only to be interested, but to participate. Bring your expectations to the table,” says Hernandez.
“A lot of companies are wanting to see how it works. We’ll give you a passenger seat to see how it works,” says Rajbhandari.
“Or a driver’s seat,” adds Hernandez.
They both laugh. The partners have an infectious enthusiasm.
“A lot of these private initiatives might not be impactful. The key is collaboration. The value creation is created by the participants themselves,” says Hernandez.
“Not just for the smart contracts but also for the spot truckload,” adds Rajbhandari.
“We’re working on all the other parts of the supply chain as well. Port of Veracruz—we’re also helping other communities build the blockchain. We can provide the service and insight,” he says.
Stay tuned. As we’ve previously written, it is our belief based upon the emerging research and evidence that some of the most interesting work in the blockchain transport and logistics space is being performed not by incumbents like IBM and Microsoft, but by a diverse group of startups. dexFreight is an emerging leader among them.