Scoular launches app to take the paper out of the grain shipping industry

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Agriculture is often characterized as a heavily consolidated industry where a few major players dominate nearly every aspect of the supply chain. Every once in a while, however, a few members of the old guard decide to take a page out of the startup playbook.

“Moving grain and commodities is a critical element to what we do,” Bill Hahn, senior vice president of business development at major grain supply chain company Scoular, tells AFN. “The hopper truck industry is very antiquated. It’s an old school process where most of the processes are handled through paper and payment is very slow. As we have moved to being more tech-focused at Scoular, we are looking at the best ways to automate and connect with trucking companies to resolve these issues.”

Operating for over 125 years, Scoular’s core business is in the buying, selling, storing, handling, and processing of grain and other food ingredients. It also operates a global trading arm as well as a specialty crop business sited mainly in North Dakota and Canada. Through each of these pillars, Scoular facilitates and manages transport logistics. Considering that the company did $4.2 billion in sales during 2019 alone, that mounts up to quite a bit of paperwork and processing.

So, Scoular decided to outsource that work by building a new app: Roger. The desktop and mobile app allows truck drivers to scan documents and other information through their cell phones. When they arrive at a weigh station, for example, a quick scan of a cell phone allows the driver to receive the scale ticket digitally in lieu of a piece of paper. The app also allows for quicker payments as opposed to waiting for a check to appear in the recipient’s mailbox. 

Shippers unite!

Scoular decided not to go it alone, however, and brought in five other leaders in the grain shipping industry to co-invest in Roger in a deal that closed in April: The Andersons, Cargill, Consolidated Grain and Barge Co, Koch Fertilizer and The Scoular Company.

This isn’t the first time major commodities houses have banded together in a tech project to create a more efficient industry: ADM, Bunge, Cargill and Dreyfus co-created Covantis to digitize post-trade processes with blockchain, AI and other solutions.

Together, Roger’s co-investors account for over one million loads each year across their individual networks. For now, they are focusing on using Roger in-house but hope to one day open up access to the app to help modernize the grain industry at large. There could also be room to derive further value and insight from the massive amount of data entered into the platform.

“I think we are very cognizant of the fact that we want to keep everyone’s individual data confidential; it’s critically important for this business to be a neutral platform that doesn’t benefit one company over another. We want balance. If there is an opportunity to leverage data, it would be at the consolidated level where there is no visibility into individual data,” Hahn explains. “We haven’t really explored that yet, but we acknowledge that if we are able to build a platform and get the number of loads on it that we think we can, there will be broader applications.”

Developing new technology in-house can be a slow-moving proposition for an entrenched player. To take advantage of some of the existing innovations in the market, Scoular tapped North Dakota-based startup Bushel to develop the app. Bushel is no stranger to tech-driven innovation in agriculture. The startup, which closed a $19.5 million Series B in December 2019, runs a software-as-a-service platform to iron out some of the antiquated kinks in the grain trading industry.

The effort put into developing Roger is counted as an efficiency play, according to Hahn. The old truism that “time is money” is particularly true in the fast-paced commodities world where employees’ time is better spent working on securing new sales and handling customer concerns than in a back-office paper shuffling and processing payments.

You can teach an old corporate new (tech-driven) tricks

Scoular is not alone in seeing the need to embrace innovation, whether through building more robust R&D departments, acquiring startups, or partnering with entrepreneurs. Many old corporations have launched venture capital arms such as Wilbur Ellis’ Cavallo Ventures, which is an active investor in agrifoodtech. In 2018, John Deere announced a new startup collaborator program to identify promising new technologies. And last year, precision agriculture company Raven Industries acquired Smart Ag, a driverless tractor technology, and the majority of autonomous farm equipment manufacturer Dot Technology Corp. 

Earlier this year, major horticulture company Priva debuted the Priva Horticulture Innovation Lab, or Phil for short. Founded in 1959, the Dutch building controls company is one of the biggest and longest-standing players in the horticulture industry. Through its Friends of Phil challenge, the company is looking to identify promising technologies and startups to tackle some of the major challenges facing horticulture like labor shortages and a lack of educational resources.

Cargill is embracing technology on a number of fronts. It recently completed a groundbreaking $12 million intercontinental wheat trade through blockchain. Tapping into Hyperledger Fabric – an open-source blockchain technology – Cargill was able to complete the sale of a consignment of wheat worth $12 million to Singapore’s Agrocorp in a matter of hours, compared to the several weeks normally required for such a process.

The global commodities trading industry is also undergoing a bit of a digital renaissance in a bid to flush out the dated practices of yore. Some of the world’s largest trading houses including the ABCDs — ADM, Bunge, Cargill, and Louis Dreyfus Company — together with China’s COFCO and Switzerland’s Glencore Agriculture founded a new entity called Covantis. The platform is aimed at modernizing the post-trading process. The partners are building a secure digital platform using Blockchain that will minimize traders’ operating risks while increasing market efficiency for the entire commodities trading and shipping industry. Many operators in the space still rely on paper documents, emails, and Excel files.

Last year, a new international non-profit trade association launched to improve the trading process for the commodities industry called the Global Commodity Technology Association. The group is technology agnostic and, like Covantis, hopes to identify potential innovations based on industry-needs.

Read Original Report Here By Ag Funder News

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