ChainGo is using Ethereum to boost the €2.7-trillion logistics sector
Spain · Nov 29, 2018· By Emanuela Ferraro
Chaingo Twitter account, Sorenson is on the left, Garrido is the to the right.
Co-founders Andres Garrido and Jordan Sorensen are using Ethereum to help the unwieldy ocean freight industry to become more efficient, transparent and secure through the blockchain's decentralized system.
The use of blockchain tech would be the biggest innovation in ocean freight since containerization, according to Rahul Kapoor, a Bloomberg Intelligence analyst based in Singapore. Key players in sea freight, such as AP Moeller-Maersk with ownership of almost 18% of the global liner fleet, are investing in blockchain and its multiple applications to optimize procedures and reduce operational costs. The transport and logistics sectors were valued at €2.7 trillion globally in 2016. Marine transportation accounted for €312 billion while logistics services brought in €658 billion, with maritime logistics accounting for €63 billion.
Two postgrads, Andres Garrido and Jordan Sorensen, developed the Ethereum logistics idea during an International MBA project at IE Business School in 2016. Their ChainGo startup is one of the pioneers of this revolution. ChainGo's paperless system works through smart contracts and enables B2B clients to automate the entire process including the agreement of compliance policies and contracts with multiple parties for each shipment.
According to the World Economic Forum, the adoption of blockchain across shipping logistics could boost global trade by US$1 trillion. “There are many other information flows that can be optimized through blockchain technology,” Garrido says. “What we want to do is to optimize the documentation flow processes, and that can be applied to construction, train transport, and many other sectors. We want to build logistic solutions.”
From pilots to launch
The logistics involved in the maritime sector can be extremely complex due to the number of parties involved and the amount of paperwork needed to fulfill an order. The blockchain's sophisticated cryptography allows all users in the supply chain to participate in highly secure transactions within an evenly distributed and interdependent network. This decentralized and transparent system will significantly reduce the level of dependency on intermediaries and minimize operational costs.
Garrido and Sorensen spent a year validating their initial concept. “We did a lot of interviews with companies in the maritime sector. The CEOs seemed very interested in what we were planning to do and that’s why we decided to continue with the project,” CEO Garrido tells CompassList. “We’ve noticed a big trend in the digitalization of this industry, led by big companies like Maersk for example. These companies are empowering the rest, reaching out to them, giving them more potential benefits which work very well.”
Edited by Suzanne Soh
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