The blockchain revolution is shaping the shipping and logistics industries. And XLOG, the homegrown digital technology developed by Shiptek Solutions Inc, finalizes details to tokenize the trade assets on the blockchain platform.
Eric John Vitug, sales and marketing head at Shiptek, said tokenizing the logistics and shipping industries would allow companies to organize their supply chain to become tamper-proof, transparent, prevent losses, improve risk management and cut costs from manipulation and system error.
“We plan to use this method to accelerate platform usage by influencing the behavior of XLOG customers,” Vitug said.
The tokens could be used to leverage payments and settlements among parties, stated Shiptek Chief Operating Officer Jose Emmanuel “Joey” Ynion. He adds the tokens would open new opportunities to optimize business processes involving multiple partners and develop new business models.
“The ability to use tokens across industries and networks, as well as interoperability of networks, will introduce avenues for new business models and fresh ways to improve business process,” Ynion said.
In addition to enabling the transfer of ownership and value, another significant advantage offered by the XLOG token is it allows intangible illiquid assets to be available for increased shareholding and trading in the marketplace.
“This gives liquidity and value realization for partial owners,” Ynion explained.
Co-owning through blockchain The XLOG token will open doors for small investors to buy into the business of ship finance. This area has previously been accessible only to well-financed companies and large organizations. Shipowners are also expected to benefit from liquidity, lower costs, better price transparency, and more secure transactions.
In mid-2021, XLOG partnered with Union Bank of the Philippines to launch an “anchor financing” powered by blockchain that offers a seamless trading solution in the logistics space while eliminating the risk of bogus transactions.
“It’s like a community-based financing with the freight forwarders acting as the “anchor,” Ynion said then. “As the anchor to the financing facility, these freight forwarders will undergo a credit assessment from UBP. Once they are onboard the credit line, the forwarders can onboard all the trucking companies they work with, and in turn, the bank will automatically onboard the trucking companies in the system.” The trucking firms will not be required for any credit assessment.
Blockchain technology will ensure the fast onboarding of all the service providers enrolled in the XLOG logistics platform.
But the most significant benefit of blockchain-based shipping and logistics platform is it allows users to transact business without intermediaries, thus reducing cost, Ynion added.
“It can bring down the cost in various ways,” Ynion said of XLOG’s blockchain platform. If you look at it from the totality, you can save between 20 percent and 30 percent. Digitizing the operations will already result in a significant cost-saving,” Ynion said.
Cost efficiency in digitizing“What we are doing is to reduce the number of middlemen in the process of logistics. That means a reduction of expenses in going from one place to another to complete a transaction,” he noted.
“One place to pay, one place to process your document, store documentation. All these involve a lot of operational costs,” he explained.
He added with the pandemic that most enterprises have shifted to survival mode by practicing cost efficiency on operations and digitizing processes.
“Everybody is trying to survive now, and Digital transformation is needed, and the priority is still to survive or save. That is where XLOG’s blockchain comes in,” Ynion went on to say.
The still-to-be-named crypto coin will be valued based on the hard currency in the interim, Vitug added. It is scheduled for launch in the first quarter of this year.
The token will be developed in partnership with Union Bank to take advantage of the existing ecosystems of both companies. The token will be available to all XLOG customers, Vitug said.