May 28, 2019 | Written by: Marie Wieck
Most everything that touches our lives took a long trip across the ocean. When you think about the fact that 90% of the goods we use every day—from toothbrushes to furniture—were transported as ocean freight, the scale and importance of the global shipping industry takes on new meaning.
Blockchain is helping to modernize the shipping industry, which for years has dealt with isolated systems that require reams of paperwork to get freight from its point of origin to its final destination. Maersk, a leader in global shipping, found that a simple shipment can go through nearly 30 people and organizations, including more than 200 different interactions and communications.
In an effort to transform this complex and far-reaching industry, several years ago IBM and Maersk embarked on a pilot to digitize global trade and share the resulting information. As a result of those learnings, last August we announced TradeLens, a blockchain-enabled platform that promotes information sharing, collaboration and trust among trading partners. In less than a year, TradeLens entered production and is now operating with more than 100 participants who are tracking and sharing over 500 million shipping events and documents. The platform uses open standards, open governance and open APIs to ensure the entire industry can benefit and drive continued innovation, while at the same time providing much-needed security and data privacy.
TradeLens has now reached a major tipping point: two of the top ocean cargo carriers, CMA CGM and MSC Mediterranean Shipping Company, have joined the platform. By joining forces to rapidly expand the geographic reach and scope of TradeLens, shippers like Procter & Gamble can get a single real-time view of all of its containerized cargo, regardless of whether its cargo is carried on a Maersk, CMA CGM or MSC ship. The 10 ocean carriers now on the network are assured that their data is not visible to their competitors. Privacy is paramount.
New members set the stage for the next wave of TradeLens growth
It’s a real milestone for TradeLens in demonstrating that major carriers are ready and willing to get involved. They realize that digitization of global supply chains is a must and by working together, we can drive that change. The collaboration with CMA CGM and MSC means that the TradeLens community now has the clout to tackle some of the industry’s trickiest challenges. Negotiable e-bills of lading is high on that list.
TradeLens brings together ocean carriers, port and terminal operators, inland transportation providers, customs authorities, cargo owners and freight forwarders. As TradeLens grows, the benefit to all grows through greater visibility, consistent information, better collaboration and shared insights. Industry experts say modernizing the shipping supply chain using this kind of technology has the potential to add billions of dollars of value creation to the global shipping industry through new innovative services, greater efficiencies and lower barriers.
CMA CGM and MSC plan to bring their terminals on board and offer the platform to their customers to further extend its reach. They join other ocean carriers like ZIM and PIL along with 40+ ports and government authorities like U.S. Customs and Border Protection, the Customs Administration of the Netherlands, the Ports of Houston and Rotterdam, as well as inland shippers, freight forwarders and logistics providers.
Open and Secure
Open APIs and standards, including The Linux Foundation‘s open source Hyperledger blockchain technology, are at the core of TradeLens, and a tool kit for developers will make it easy to build and innovate on the open platform. TradeLens is also working with openshipping.org to align its APIs with the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT) standards.
With influential ocean carriers joining, TradeLens is better positioned to get insight into other key requirements for continued innovation and interoperability. For example, TradeLens plans to support the Digital Container Shipping Association (DCSA) efforts on interoperability and standards in container shipping.
This open approach makes it easier for players in the supply chain to publish and subscribe to information that needs to be shared. In just one example, it’s not uncommon for a transport plan to change, with cargo being redirected or delayed. That kind of information can quickly and easily be shared via the TradeLens APIs.
At the same time, TradeLens is designed for security and data privacy, which are essential to the success of a business network that includes not just partners, but competitors. TradeLens uses IBM blockchain technology to give trading partners a shared view of transactions without compromising details, privacy or confidentiality. Consistency checks indicate that documents have been verified and not altered, providing an immutable record of transactions.
How It Works
Access to real-time, trusted supply chain information enables truckers and drayage drivers to plan better, reduces port and terminal congestion, minimizes customs and inspections delays, allows everyone to react to supply chain disruptions as they occur and ultimately streamline shipment deliveries. Shippers, transportation and logistics companies and authorities can quickly access trusted and essential information via the blockchain, reducing the amount of paper documentation and improving costly and time-consuming operations, such as freight audit and invoice handling.
On TradeLens, ocean carriers can operate independent blockchain nodes for data sharing related to their contracted consignments. Access controls let data owners prescriptively determine different levels of permission for data access. Data owners continue to control their data even after it becomes part of the blockchain network.
CMA CGM and MSC will operate their own blockchain nodes, host data and serve as Trust Anchors, or validators, for the network. Both companies will join the TradeLens Advisory Board, which will include other members to help guide future development and advise on standards. The participation of these additional carriers in our open governance is another proof point of our blockchain principles in action.
Equally important, the momentum of TradeLens is the latest proof point of the growing adoption of blockchain, which is increasingly used in banking, food safety, supply chain and other industries where trading systems must be digitized. Blockchain skeptics now have something new to think about in terms of the global reach and scalability of the TradeLens platform, which is tracking more than 10 million events per week and growing fast.
Blockchain is a team sport, and we hope that those who have been watching and waiting will now make a commitment to join us and help transform global shipping.