Blockchain for integrated ecosystems

Varun Dinodiya
January 13, 2022

International commodity trading involves complex supply chains with multiple inefficiencies reflecting archaic processes, low trust, poor financial and market infrastructure and a lack of coordination and cooperation among supply chain actors.

Digital Commodity Exchange (DCX) was founded with a vision to digitize the global agricultural commodities trading industry by creating a secure and trusted ecosystem, powered by blockchain. The intention is to offer to the traditional industry a means to trade digitally by simplifying existing workflows, providing an interface with a broad ecosystem of industry participants along the value chain and digitally replicating the physical world as best as possible.

Any party involved in the process of physical commodity trading stands to benefit from processes which are quicker, more accurate and safer. This is a substantial challenge as every trade involves different counterparties, as well as logistics providers. However, the rise of new technologies like blockchain, artificial intelligence (AI) and predictive analytics allows many hurdles to be overcome.

In addition to providing a secure environment for buyers and sellers to connect and agree trades, DCX marketplaces offer users a range of services from providers that can interact over the platform. For example a booking platform can connect with an insurance provider, a finance platform, an inspection agency or a freight platform and share common, validated data.

Freight and ancillary shipping costs form a significant component of the total cost of the commodity in a typical physical CFR trade. Complicated, multi-modal supply chains move goods from the producer to consumer via rail, sea and truck and often need to seek out several counterparties to check on availability, size, price, standard of service and other related services. That is the only way to get the “best deal” at present.

DCX is looking at various integrated freight/shipping models to offer its users that would offer ease of chartering vessels, market level pricing, convenience, market freight trends, visualization of existing vessels floating with agriculture commodities globally, heat map of demand and supply, historical analytics. Potential solutions include: (a) integration with incumbent market leading physical freight brokers (b) emerging online global freight booking platforms (c) partnerships with leading shipowners and shipping lines to enable direct vessel bookings on the platform. Fertilizer Exchange and Rice Exchange already allow for direct booking of both vessels and containers.

The advent of disruptive technologies, innovations in the world of commodities trading and the breakdown in supply chains resulting from COVID-19, has resulted in a plethora of value-added solutions and offerings in the shipping space. DCX is looking to capture maximum efficiency gains for the benefit of the trade fraternity. With a forward-looking mindset and customer-oriented approach, DCX is open to exploring partnerships that will benefit its users and the agriculture commodities trade world at large.