In a stunning move, the joint Maersk-IBM blockchain technology platform TradeLens, has been adopted by Modern Terminals Ltd., to digitize the shipping workflow and accelerate the shipping process to bring unrealized benefits of speed and throughput to Modern Terminals customers. The competition is concerned as such a move could only strengthen Maersk’s 90% hold on global maritime trade.
Set to deploy by the end of 2018, Modern Terminals is the only Hong Kong organization, to-date, that has signed on to deploy this new technology, to handle its logistics documentation.
“We shouldn’t walk away from our history. We need to go on the offence and being part of a smart city makes sense.” – Peter Levesque, Managing Director for Modern Terminals Ltd.
What is Blockchain?
To solve issues of identity, validation and security of data, the blockchain model at its simplest expression is a sequential distributed database. Where no sole entity possesses “the key”. The key is assembled at the time it is needed, once the parties have been validated. This has proven to be a most secure approach to digital security, rendering phishing useless and preventing hacking by outside parties. It has mostly associated with the emergence of bitcoin and other cryptocurrencies
Within the last year, the adoption of blockchain, once, primarily adopted by the financial industry, has given way to other sectors at an exponential rate where non-financial businesses will make up nearly half of blockchains use by the end of 2018.
“That is the Holy Grail. One place to see the whole supply chain in one spot. For shippers, freight forwarders, imports and terminal operators alike.”
An industry moving into the future.
Shipping’s documentation is still largely paper-based. This in and of itself lends itself easily to inefficiency and fraud. Moving along the supply chain, container ships must present paper documents for verification if cargo and credentials. Immediate verification of the documentation can be problematic for a host of reasons as we all know. Blockchain puts an end to the delays and guessing games by allowing end-to-end verification. This in turn speeds up customs clearance for clients.
“You’re going on faith that what’s on the paper document is what’s in the container.”
TradeLens isn’t the only blockchain solution available for global shipping. Singapore-based Crimson Logic’s, Global eTrade Services (GeTS) provides a blockchain system to integrate documentation and supply lines. PSA International, the operator of the city state’s container port and a 45% shareholder is showing that there are strong alternatives out there.
According to Chong Kok Keong, chief executive of GeTS , “Our partners in China are also working with us to help the supply-chain and logistics players along the Southern Transport Corridor to make cross-border trade easier, more predictable and accessible. We want to be in a position to serve this segment of the trade flow.”
His statements were made In an effort to drive home the efforts of developing trade links among China, Singapore and the Asean (Association of Southeast Asian Nations).
Not everyone is on-board. Maersk’s ownership of TradeLens may exclude some shippers, including their competition.
“Technically, the solution could be a good platform, but it will require a governance that makes it an industry platform and not just a platform for Maersk and IBM.” – Rolf Habben, Chief Executive Officer, Hapag-Lloyd
To quell any unrest within the industry, efforts are currently underway to provide an industry standard for shipping lines. A meeting of executives from Maersk, Ocean Network Express, MSC, CMA-CGM and Hapag-Lloyd took place in November to begin the dialogue on standardization.
Modern Terminals decided to join TradeLens due to the Maersk ‘s massive sprawling network which accounts for more than 19% of global shipping. The blockchain network is on the move, adding 2-members every week. As of this past Fall season, they boast a 105-member strong roster including shipping companies, terminal and port operators and customs departments.
At last estimate, 1-million ship movements are being captured everyday within TradeLens. With nearly 240 million customs releases, invoices and bills of lading at last count Maersk is clearly the market leader and the target for some soon-to-be fierce competition. Anticipation is high in the forthcoming year. We at John C Riccardo, CHB will monitor this story and provide more info in 2019 as it becomes available.
