Introduction to ‘dKargo’, a novel solution for the logistics industry
Growing e-commerce, expanding logistics industry
Today, we live in the era where same-day delivery and early-morning delivery is common. A book ordered in the morning gets to our doorstep in the afternoon, fresh vegetables ordered at night arrives to us in the following morning. Such a miraculous development was made possible thanks to the efforts made by e-commerce giants such as Amazon in the US, and Coupang in Korea, continuously innovating the field of distribution and logistics.
Data from the Bureau of Statistics shows that the market size for Korea’s online commerce has almost tripled from 10 trillion KRW (approximately $83 billion) in 2014 to 28 trillion ($232 billion) by 2018.
Also, TMR(Transparency Market Research), a global market research agency in the US states in its recent report that the logistics industry will experience significant growth of 7.5% annually in average until 2024.
While e-commerce business is rapidly growing, so does the industry for individual delivery which is a part of larger logistics industry. As the traditional delivery market transitions from being formed around the businesses and institutions to value being centered by various individual demands, reflecting affordability and attention to details. The logistics industry has began to match its steps to follow the changes, offering more efficient services.
However, efficient logistics service that could satisfy varying individual demands is yet to be developed. Survey conducted by World Bank reveals that Korea’s ‘Logistics Performance Index’, or LPI is ranked at 25 for the last 10 years, having no change at all.
Inefficiency in traditional logistics industry
Although the overall size of logistics market is expanding, because of inefficient system and structure, flexible logistics service is out of option. Thus, only quantitative growth has happened, whereas in the quality of the service, it hasn’t.
For a long time, people working in the logistics industry in Korea has suffered from low wage and inappropriate workplace environment. And the industry itself has long been simply perceived as a means of cargo transferring.
Unnecessary costs caused by over-competition
There is ongoing unnecessary competition between the participants in logistics network to supply their resources to limited demand, which is work available in the market. For instance, from the moment when the customer sends a parcel (First-mile) to when it arrives to the receiver (Last-mile), there exists numerous companies competing each other, making overlapping investments in the market. This is the largest factor contributing to the lowering efficiency in the overall logistics industry.
Lack of trust in between network participants hinders cooperation
Naturally, in order to cool down the overheated competition in the market, the participants in the logistics network need to cooperate based on trust. But because the companies utilize their own logistics solutions developed by themselves, data and resource sharing between multiple companies is limited. Even if the data is shared, additional resources are put forward to ensure the validity, which creates endless cycle of inefficiency.
Trustworthy logistic network
In the end, the key to solve the problems current logistics industry is facing is ‘trust’. When trust is laid at the foundation of logistics network, tremendous resources that was to be spent as overhead can be saved. Also, the participants can properly share data, resulting healthy competition without friction. Resources meant for the competition can be redirected to allow growth in quality.
So how can trust be created? The solution arises from the blockchain technology. Based on the consensus made by the network participants, blockchain stores trustworthy data in its distributed ledger. Such data can be used and read by anyone within the network transparently, enabling cooperative ecosystem without any help from third party.
Logistics industry is meant to face an inevitable transformation in future. It calls for services that would bring a new paradigm in the logistics market which could entirely change inefficient logistic system, and structure that is low value-centric. So who could take the role of leading the future of the logistics industry?
Introducing ‘dKargo’, the next generation logistics network based on trust
dKargo aims to allow sharing reliable data within the network and structure a flexible and efficient logistics network by integrating the blockchain technology. Participants in dKargo logistics network are able optimize their time and resources while exchanging reliable data with the others within the network.
For instance, people with motorcycles, individuals using public transports and those running a small businesses can join the platform even though they are not a part of existing logistics service providers such as delivery and freight companies.
Also, the whole process could be more than just providing simple logistics services. All other types of relevant services such as payment, reforming and repairing, and evaluations can be seamlessly integrated on the top of logistics, creating new values that results more efficiency in overall service.
Additionally, through incentive model for contributing to dKargo ecosystem, the network participants could actively engage with making more robust ecosystem. It also solves the problem of fair distribution of rewards.
dKargo’s partner to a great step forward, ‘deleo’
To create a new ecosystem for the logistics, dKargo is partnering with other existing players in the industry. In particular, we are working with ‘deleo’, a IT based logistics platform specializing at international delivery as dKargo’s key partner.
‘deleo’ secured investments from notable VCs in Korea such as Kakao Investment and Lotte Global Logis. It’s growing fast with securing more than 10 billion KRW ($83 million) in just 3 years since its incorporation. dKargo would start to innovate the logistics ecosystem with ‘deleo’ which has formed a strategic partnership with USPS, US Postal Services.
We plan to form partnerships with other large businesses continuously to promote dKargo’s ecosystem to expand globally. The following article would be about introduction to ‘deleo’, our key partner, and what role it would be taking together with dKargo and how.
