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FR8 Network: Modernizing logistics using Blockchain tech
Editorial Team

Global logistics is a major business sector across the globe with substantial economic impact on almost every person on the planet. Every year, millions of supply chain entities are fiercely competing to transport approximately 92 billion tons of physical goods. By 2023, the global logistics industry is estimated to be valued at $15.5 trillion USD.

Despite the introduction of cloud-based solutions by companies such as SAP, Salesforce, and Oracle who are working to improve freight and order management, the limiting presence of the human element is still there – specifically in transportation planning and execution, settlement costing, analytics, and reporting. Further, personal relationships, profit maximization tactics and lack of transparency currently dominate the market.

The Fr8 Protocol aims to modernize logistics from the inside-out, leveraging Blockchain technology at its core. Basically, the new set of standards, a suite of software tools, and accurately targeted incentivization structure will benefit all stakeholders across the supply chain.

There are many issues that global logistics face the Fr8 Protocol will directly address. 

  • Redundancy & Reconciliation: There is a lot of unnecessary duplicated paperwork that’s recreated during the process that increases the potential of an error.
  • Low Standards adoption: Attempts connecting information systems through standards like Electronic Data Interchange (EDI) have only proven partially successful.
  • Limited Data Transparency:  Data such as carrier reputation are not widely available, remaining locked in large brokerage databases.
  • Poor Incentive Alignment: Frequently brokers choose to connect shippers to the cheapest carrier, ignoring incentives such as finding a cost-effective carrier solution or ensuring efficiency by assisting with load capacity.
  • Price Manipulation: Because large brokerages control the deal-flow, they create an industry where price discovery is manufactured by an intermediary that also charges a 20% arbitrage fee.  
  • Complex, Inefficient Tracking & Cooperation: Currently, goods change ownership via a shipment’s Bill of Lading (BOL), a document that is handed off throughout the shipment’s journey, until its final destination. The complexity of the system consists of the obligatory documentation, verification, and validation of the delivery by each stakeholder: supplier, carrier, receiver, broker, and financier.
  • High risk of Theft and Fraud: By doing handshake agreements and by transferring handwritten paperwork, the possibility of dishonest distribution, double spending, and insurance scams is significant. On average, more than 220 US freight loads are stolen each quarter, accounting for more than $105 million lost each year to theft.
  • Environmental Impact: This is a large problem as 25% of trucks driving on US highways are empty while cargo-carrying trailers are 36% underutilized according to the Environmental Defense Fund.

The Fr8 Protocol will instill the network with transparent, immutable, and expedient smart contracts, differentiating from other leading products on the market. The Protocol is designed to serve the needs of all stakeholders allowing them to compete fairly and ultimately improving the entire customer experience.  

The Protocol defines Blockchain-backed:

  • Interfaces: The connection point between the core of the Fr8 Protocol where data lives and Services that interact with applications is the Interface layer. Through a series of APIs, the shipment lifecycle is documented, shared, and ultimately closed by calling endpoints exposed through the Interface layer.
  • Services: Bridging the real-world business needs of the industry to the specific flow of the Fr8 Protocol is the Services layer. Services are built by 3rd parties and supported as a revenue stream. The need for Payment processing, Notification delivery, and Data visualization is met by Services.

All above are summarized in the statement of Mr. Fox, the founder of Fr8 Network:

“Blockchains are great for moving critical data out of silos and onto an open network. In order for a $700 billion marketplace comprised of primarily small business to have a fluid process of discovery, transparency is a must,” Mr. Fox said. “In the old model, an intermediary holds all the critical data and controls matching and price discovery as they are the fulcrum point for transactions. Incentives are aligned with their profits – not with creating an efficient marketplace.”

The Fr8 Network uses a “Fr8 Token” generated on the Ethereum Blockchain, which is necessary to write data to the Fr8 Protocol. It’s also used by 3rd party services built to bridge the interfaces with the rest of the ecosystem of applications. These services will charge for their features with Fr8 Token.

Our take

Without a doubt, Blockchain has the potential to transform a wide range of industries and the freight industry can definitely be one of them. In the era of Al technology, the traditional way of doing business in the industry is somewhat peculiar. Blockchain advantages, such as the elimination of brokers and allowing of peer-to-peer transactions, can make the industry entirely transparent so shippers and carriers will be able to conduct business on their own terms, within a network built on trust to reduce costs, redundancies and delays.

For more information please visit their official site:

 

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