dreamers Limited Series It looks at characters trying to change the way we live.
The past year has provided a number of reminders that the links that create the global economy can be tenuous. In March 2021, high winds from a sandstorm blew a container ship sideways into the Suez Canal, disrupting about 12 percent of global trade for about a week. And last February, trade sanctions due to the war in Ukraine halted many shipments of fresh produce to Russia.
Either way, customers of a Korean startup called Tridge were able to quickly find alternative buyers for their perishable products, sometimes redirecting them when they were already on their way by sea.
Traditionally, the fresh produce business has been conducted in a relatively binary fashion between buyers and sellers. A seller might sell to a variety of buyers, and a buyer could buy from a variety of suppliers, but the global trade in fruits and vegetables wasn’t really interconnected—at least, until Tridge came along.
Hoshik Shin, a former private equity fund manager at the Korea Investment Corporation, Korea’s $200 billion sovereign wealth fund, is building such a network, with nearly 100 countries in attendance so far. His company works directly with farmers and grocers, often buying from one and selling to the other to remove the lack of transparency and trust that permeates the global trade in fresh food.
And when something interrupts that commerce, Tridge can quickly find new buyers in other countries before the product spoils — much like the Internet redirects traffic when a single server in the network goes down.
What is remarkable is that Tridge – the name is a transaction port and bridge – operates with low margins, slight enough not to interfere with the flow of commerce. It can do this because its operations generate a valuable byproduct: data. Tridge records the price, quality, and volume of every item you deal with, sells that data to both sellers and buyers, and reimburses all other costs.
Mr. Shen’s ambition is to compile that data into a huge, moving, real-time picture of the freshest produce on the planet. Anyone can sign up for the Tridge Intelligence platform and watch the world grow, harvest, pack and ship everything from Indonesian mangosteen to American lemons.
Understand the supply chain crisis
This interview has been condensed and edited.
Can you tell us what you’re trying to do with Tridge?
Our vision is to create an integrated supply chain management system for the global food and agriculture industry.
This market has been frustrated by the lack of transparency. There is mistrust between big buyers and big sellers who have been building relationships for decades. When there is a distribution problem, sellers do not get paid in full, and when the market is good, buyers feel they are overpaid.
Tridge plays the role of a highly transparent broker, trusted by both sides.
Why more confident than traditional methods?
Farmers can move to better grading systems and value-added products and increase their income, as happened with beef. Forty years ago, there was no such developed system for classifying beef.
Users can check the market research they need. If there are products they want to get, they can check pricing and availability from all geographies and can easily place an order.
Suppliers can diversify their sales channels and buyers can secure more stable supply chains. They can easily switch from country to country or from one region to another.
Everything from researching to sourcing physical goods can be done in one stop.
Can you give an example?
When the sanctions were imposed on Russia, we had 100 containers of oranges bound for Russia from Egypt. We sent them to other regions, to the United Arab Emirates, the Netherlands, and China. Otherwise, we may not get paid, or the fruit may perish.
We don’t suddenly forward shipments of this size to one country because the sudden supply can affect prices in that region. We divide it in one of our warehouses and then distribute it in several markets.
Building a global network seems to be a huge task.
It wasn’t easy. Building our data platform was the biggest challenge, because we deal with so many different products. It took five years of extensive work to collect and map the data on a global scale.
How the supply chain crisis unfolded
The epidemic caused the problem. The highly complex and interconnected global supply chain is in turmoil. Much of the crisis can be traced back to the Covid-19 outbreak, which has caused an economic slowdown, mass layoffs and a halt in production. This is what happened next:
Food and agriculture are a very conservative industry. It is a business relationship. Who you know in a retail chain is important. Therefore, our lack of historical presence in a somewhat conservative industry has been a challenge, and one that we continue to work on.
To build trust and profile, Tridge applies stricter verification standards than in the industry. We take responsibility for logistics, payments, deliveries and claims, as we act as a market maker for more than 15,000 agricultural products.
And it was not easy to learn the business operations of different countries, legal issues and logistics. It might seem easy now that we’ve figured it all out, but there have been nights where we stayed up late wondering if our shipments would make it to their destination.
How did this start?
I was working in the private equity investment arm of a Korean sovereign wealth fund, running a $2 billion fund dedicated solely to investing in commodities. I was writing checks from $100 million to $200 million for commodity related companies. So, I got acquainted with the commodity space.
Then I built a platform for some sort of expert network of professionals who could help get goods for a finder fee – a company like Nestlé looking for a major ingredient in a particular country, or is there someone I could talk to in France about grapes? We gathered nearly 40,000 people around the world, each representing their own market, and we compensated people for their connections.
Through this process, we extracted a lot of intelligence.
The energy and chemical deals were very large, the repetition was lower, the deals were dominated by a few big players, whose impact was enormous. Therefore, 70 to 80 percent of expert network inquiries came from agriculture and we realized that the market was completely fragmented. Nobody dominates.
With products, there are thousands of products and varieties that have never been standardized. So, initially, we put resources into building the data structure to structure scientific classes, cultivation types, packaging, and gradients. Without such a structure, you cannot aggregate this type of data.
Therefore, we have become a kind of center point of gravity. Once our mass is large enough, we can standardize it.
Can you talk about the role of market intelligence on your platform?
We collect data, data becomes intelligence, intelligence attracts users, many of them turn into premium users, become buyers, our suppliers. They start doing transactions with us, and those transactions create more data and fuel our data intelligence. Therefore, there is a flywheel effect that gets stronger over time.
Our suppliers, when they do business with Tridge, can handle many buyers simultaneously without spreading sellers to many countries. This aggregate demand gives us better bargaining power.
Craig S. Smith is a former reporter for The Times and podcast host.Eye on artificial intelligence“