Managing the logistics of international transport and the various components of its associated supply chain is generally an expensive drain on company budgets and, according to the World Bank, accounts for an astonishing 10% of global GDP.
The costs are high because the transfer of ownership of goods from business to business (B2B) often employs third parties, contractors and sub contractors which adds to the difficulties and risks involved. Communication issues, red tape and varying levels of competence in this chain can result in undelivered, disputed or lost shipments.
Where there are challenges and expenses though, there are also opportunities. Forecasts from independent research firms have suggested that by 2021, this market segment will be worth $15.5 Trillion.
It is also suggested that such a significant amount cannot be left at the mercy of out-dated practices.
Before moving on to the concept of the actual project under review, it maybe worth glancing at a reference graphic from the UN/CEFACT Buy-Ship model to get an overview of the current paper-based steps that need to be harmonised during the various procedures and document exchanges between supply chain participants.
CONCEPT AND WHITE-PAPER
The Open Enterprise Logistics (OEL) Foundation aims to utilise blockchain tech to remove the reliance on a paper trail of transactions and cut out the middle men, bonded couriers, brokers and clearing houses that extract value from the current form of operations.
Standing behind The OEL Foundation is OpenPort, a digital logistics company platform that specialises in domestic distribution in emerging markets.
Located in Hong Kong and founded in 2015, OpenPort will incorporate their existing digital ePOD (electronic proof of delivery) with the blockchain to create an immutable ePOD with an indisputable record of the freight’s history, linked through smart contracts.
The OEL Foundation itself will be a non-profit organization open to enterprises in the supply chain and logistics industry.
The Foundation will provide governance, development, and open source collaboration for the OEL Protocol and is in charge of the forthcoming ICO. OpenPort on the other hand will provide vendor support and assist the Foundation in the areas of development, administration and marketing.
Legally speaking, the only obligation between the two entities is a service agreement where the Foundation takes ownership of the Enterprise Architecture.
This company structure is an attempt to provide a neutral platform for the development of a community-led blockchain protocol aimed at fostering a spirit of collaboration and innovation within the supply chain industry.
A number of companies have already joined this OEL Alliance in order to make blockchain real for their organisations. Alliance members are entitled to access to the platform and resources necessary to make their current supply chain, logistics and transport management technology blockchain-ready.
Governed by a board of directors and an advisory committee, and comprised of nominated representatives of logistics and blockchain companies, the OEL Foundation will determine who will be granted membership of the Foundation.
There are three core documents on the ICO’s website – the white-paper, a 68-page technical paper and a one page quick-reference guide.
The two main publications are text heavy and graphics light but contain sufficient detail for those willing to devote the time in exploring the content. For those who are more time-pressured, the handy one page infographic focusing on the token sale is a useful starting point.
While the whitepaper provides the skeleton roadmap shown further below, the technical paper has a section titled “Architecture Implementation Roadmap.” Here The OEL Foundation outline their intentions for the architecture from initial analysis and design through to the MVP.
From an investors viewpoint, it may have been preferable if some of the meat of this development architecture had been included in the bones of the white-paper roadmap.
The OEL Protocol is a smart contract platform with a notarised Proof of Stake consensus mechanism. This is designed to reward data sharing, maintain low costs and stable transaction speeds, as well as providing data confidentiality. All of which should accumulate to facilitate an open and collaborative governance system.
As mentioned, Alliance members will be able to integrate their own processes into the platform.
The platform will be powered by the OPN token, an ERC20-compliant utility token, which will fuel the smart contract validation, serve as micro-rewards for sharing data to the network and act as a point of access/stake on the network.
The following is a hypothetical example taken from the Foundation’s technical paper and demonstrates the use of processes/process steps, messages and smart contract configuration to support the use case of transport with electronic Proof of Delivery on the blockchain.
The OEL Foundation platform will enable a number of general use cases throughout the transportation process to be implemented including:
- Letter of Credit (LOC) – allowing all parties to have the same validated record of transactions and fulfilment conditions.
- Trusted Supply Chain – shared record of asset information as it moves through the supply chain, recording ownership and where an asset is located in the supply chain.
- Internet/Economy of Things (IoT/EoT) – enabling device coordination and peer-to-peer messaging i.e. temperature monitoring, pallet tracking, returnable packaging, vehicle weights.
- Liquidity – factoring on the blockchain.
- Commercial Paper – connects corporate treasuries with global advisors for investment advice, with subsequent execution through to clearing and settlement.
- Contract Management – a shared repository of legal documents aiding the workflow of document handling via smart contracts. Automatic checking of multiple related documents (such as a master service agreement, service contract, invoice, etc.).
- Equipment Records – a shared ledger of equipment history, detailing usage, maintenance, and warranty work and replacement parts.
- Food Safety Provenance – Secure documentation is added to raw material and consolidated onto packaging with aggregation for shipment giving real-time visibility of the food supply chain to distributors, consumers, retail buyer, auditors, and regulators.
- Fatigue Management – Tracking and Management of driver hours.
The OEL Foundation is led by CEO and founder Max Ward. As well as forming the parent company, OpenPort, Ward has extensive experience in a director capacity at DHL and other global logistic companies around the Asia-Pacific region.
With an MBA from Thunderbird and a background in I.T. he appears well-suited to sit at the helm. Alongside him on the board is CFO Nicolas Husson who has was previously employed by BNP Paribas APAC investment banking division. His role with BNP Paribas involved focusing on cross border merger and acquisition transactions in the Energy and Natural Resources sector in the region.
The CTO is Mark Nelson whose previous roles included technical project manager for the Asian arm of the Prudential Corporation and as a IT integration consultant for both BUPA and Societe Generale Corporate and Investment Banking (SGCIB).
All three have wide digital footprints and extensive connections shown on LinkedIn while other team members – including board member and CEO of BSA Logistics Paul Good – can be found discussing the project on a number of finance and supply chain industry websites.
This core team of the OEL Foundation will be supported by individuals, including computer engineering architects and a blockchain specialist, who have been sub-contracted to work on the project.
There are only two advisors listed against the project – including Amazix CEO Jonas Karlberg which should mean that the project will have relatively little difficulty getting its message to a wider audience.
The stated token price is $0.50 per OPN and a minimum purchase of $250, up to a maximum of $25,000, will be needed to participate in the first public crowdsale scheduled for sometime in Q3 2018.
Prior to the public offering, a private pre-sale will offer an as yet undisclosed discount to people who purchase between $10,000 and $1million worth of tokens.
A total of 32.4 million OPN tokens will be available during these pre and public sales, and soft cap is listed at $4 million against a hard cap of $15 million.
Around 5% of the supply will be allocated to the advisors and partners and these are subject to a 12 month vesting schedule.
Where hard cap is reached, proceeds raised in the sale will be distributed as per the graphic below. It may be worth noting that 30% of the amount will be handed to the parent company, OpenPort, to cover the costs of both the ICO and future programs that support The OEL Foundation.
Alternatively, if only the soft cap is achieved, $2.5 million will go to developing and implementing The OEL Foundation Architecture and the remaining $1.5 million will be shared amongst the other initiatives. These funds will be added to after the second public sale next year.
When the Foundation’s mainnet rolls out in Q2-3 in 2019, it is envisaged that around another 30 million OPN tokens will be made available for purchase at the market rate applicable at that time.
- Contact with OpenPort clients
- Publication of roadmap, architecture, technology paper and whitepaper
- OEL Alliance marketing
- Pre-sale and first public crowdsale
- OEL Protocol Alpha release testchain
- Development of partner engagement
- OEL Protocol Beta release testchain
- Q2: OEL Protocol V1 release mainchain
- Continued roll out of main net and second public crowdsale
- OEL Protocol V2 release mainchain
- OEL Protocol V3 release mainchain
OpenPort’s current market presence and working digital ePOD should serve as a springboard for the project’s expansion into blockchain territory.
The tokenomics appear sound and the roadmap, although brief on details, is logical and, given the opportunity, the projected growth of the project itself appears promising without seeming overly ambitious.
On the other hand, the project has so far only attracted modest attention – in part because it is still in its early stages – but it has yet to cause a stir within the wider ICO landscape. Its Telegram group only numbers just over 1000 members at the time of writing, whilst its Twitter and Facebook following numbers in the hundreds.
The perceived complexity of the project may be acting as a hinderance to engaging with a wider audience, and its governance structure as a ‘Foundation’ likely is not helping in this regard. The proposition may just be beyond the average retail investor, and the project may have to wander further into VC territory to help meet its fund-raising targets.
The model also presupposes a supportive, rather than combative, business environment modelled along the structure of the Enterprise Ethereum Alliance and other similar partnerships that have emerged within the blockchain space.
Making for a good blockchain fit – rather than an opportunistic one as is so often witnessed in the ICO space – and working off of an established business and business model, the hardest nut to crack for this project, it appears, will be pulling off the kind of marketing campaign that will result in wider engagement.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
Disclaimer: Please note that all ICO reviews on ICOExaminer are non-technical assessments, in some instances are sponsored, and are very often sentiment-based and should not - under any circumstances - be construed as professional investment advice.