Fintech company TruckCoinSwap (TCS) announced its transportation digital asset program has launched on CrossTower Exchange, a global crypto and non-fungible token marketplace. This is the first step for TCS Token as it looks to compete with factoring companies and banks.
“The cost of milk and eggs aren’t just going up due to inflation. Banks and factoring companies are making it more expensive for trucks to operate,” said TCS Chief Technology Officer Jake Centner. “The very best use case for blockchain technology and digital assets is to disintermediate these types of financial problems in industry.
“Using the TruckCoinSwap mobile and web apps — and TCS Token — transportation companies can now receive free invoice settlement and get paid sooner. TCS is helping to write a new chapter in blockchain and Web3.”
In an interview with FreightWaves, TCS Chief Executive Officer Todd Ziegler explained the momentum behind providing a digital asset for the trucking industry, describing the factoring and banking systems that provide cash flow solutions for both trucking and third-party logistics companies.
“We started doing the math and while 3% of every receivable doesn’t sound that bad, annualized over terms, it is essentially a 20% to 25% interest rate on an advance of cash,” said Ziegler.
Ziegler went on to write a white paper on the subject and quickly caught the attention of the University of Wyoming’s Advanced Blockchain Lab. TCS announced its partnership with CrossTower Exchange this past weekend during the university’s Blockchain Stampede conference.
Working with the university and the lab’s current director Steve Lupien, who now advises TCS on its digital asset exchange, the company is now preparing a beta test with about 10 drivers over the next five weeks as it prepares to run its first live TCS transaction during FreightWaves’ Future of Freight Festival Nov. 1-3.
Will drivers adopt it?
While Ziegler acknowledged there could be some apprehension among drivers to trust a blockchain and token system for payment, adviser Lupien described how using drivers paperwork, or in this case, their digital assets, is not the same as trading cryptocurrency.
“The beauty of what TCS is doing is using digital assets as a vehicle for solving the payment problem. For the user of the product, it doesn’t matter what the back end is. Essentially a driver is going to take a picture of their manifest using their phone and then using a debit card, get nearly instant access to their liquidity at much lower costs. It’s not like they are trading in bitcoin or doing cryptocurrency in that regard. Blockchain is simply the back-end vehicle that allows TCS to provide that liquidity at a lower cost,” said Lupien.
Users could also be concerned about volatility of these digital assets and cryptocurrencies in general, although Philip Schlump, TCS’ chief customer officer and lead developer, explained the security of the model.
“Carriers and 3PLs need to get to liquidity, so they need to sell TCS. Drivers need to fill up their rigs and get to their next load. They’re not investing in crypto, so we’ve built the tokenomics model around that need,” said Schlump. “If TCS needs to buy the token on the other side of an exchange transaction, it will. In fact, TCS will become the single largest buyer.”
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David
Not one crypto or token specific for trucking has ever worked. none. many have tried. not even bitcoin or ether works in trucking. nobody in trucking want crypto pmts. drivers don’t understand it. drivers want hard cash. and the reason factors charge 3% is because they take all the risk when debtors don’t pay them. so, charging less is stupid unless you want to go bankrupt.
Marc
Factoring using blockchain is missing some key questions and answers. First is the adoption by both counter parties to utilize the technology (without both, its useless) and second is the idea of adding a “credit” component. Blockchain as originally envisioned was credit-less and settlements (both parties agreeing on completion/fulfillment) would be backed by a cash payment. If its an instant settlement, your presuming the payer would have the liquidity. Not many businesses are paying COD. Also, does this company plan to offer this service for free?