Log-Flock: A new Business Platform for E-commerce Logistics Financing

Abstract

The e-commerce retail sales have seen significant growth in the past decade with its proliferation into the consumer markets at unprecedented rates. This has led to the rise of logistics companies (LC) and the advent of Logistics financing as a tool used by them to attain business expansion. The current climate in e-commerce that is characterized by an upswing in sales requires the LCs to equip themselves with sufficient capital to elevate or modernize their operational capabilities. But, these small and medium-sized enterprises tend to overlook their business expansion opportunities due to the unfavorable financing environment created due to their: (i) limited tangible assets (ii) lack of clarity on operating capability and (iii) lack of reliable information-sharing mechanism. To address these problems, this study aims to utilize the digital assets of the LC to aid logistics financing. This study introduces a logistics financing platform (Log-Flock), that leverages the abilities of the Internet of Things (IoT), cyber-physical system (CPS), and blockchain technologies to support the utilization of digital assets of the LC for logistics financing. The IoT and CPS combine to support the generation of the digital assets whereas the core constructs of blockchain technology, such as the tokens and smart contracts, are used to (i) introduce incentivized rewarding mechanisms to motivate the engagement of users and, (ii) to perform the digital asset valuation and risk assessment in logistics financing.