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More shipping companies join IBM-Maersk blockchain consortium

TradeLens, the blockchain-based shipping platform launched last August by Danish shipping conglomerate Maersk and IBM, announced that two new members have been recruited.

The initiative has been joined by Mediterranean Shipping Company (MSC), the industry’s second largest after Maersk; and CMA-CGM, the fourth largest in terms of cargo carrying capacity.

IBM said that MSC and CMA-CGM join other carriers Asia’s Pacific International Lines (PIL), Zim Integrated Shipping Services, and Maersk subsidiary Hamburg Süd, which, when combined, account for nearly half of the world’s ocean container cargo data.

TradeLens also hosts over 100 supply chain operators from the shipping and freight forwarding world including port authorities and cargo owners.

The initiative’s early difficulties in attracting Maersk’s major rivals on to the IBM platform appear to have been overcome, an impressive achievement in an industry with narrow margins for IT revamps and an inherent distrust among competitors. Rival carriers were also concerned that Maersk and IBM owned the intellectual property in a joint venture.

A paper-reliant industry

Shipping has traditionally been a paper-intensive industry characterised by largely manual process. It’s still challenging to track the current precise location of a container, or which government agency might be holding it up. The auditing process can take weeks of intensive effort to gather the paperwork generated throughout the journey to market.

Although it has been evident for years that shipping could benefit from digitisation, previous initiatives such as Electronic Data Interchange (EDI) have met with only limited success. The hope is that blockchain will enable all participants to easily follow the flow of shipments along the chain and they can trust an immutable record that has not been altered at any point.

IBM said that the group and Maersk continue to be sole owners of the TradeLens platform, but added: “The nature of an effective blockchain is to create an environment where multiple parties, often competitors, want to co-exist. Both CMA CGM and MSC are participating on the advisory board as part of the shared commitment to open governance.”

According to Marie Wieck general manager for IBM Blockchain “They [CMA CGM and MSC] took a good hard look at this and saw the clear benefits of joining. This is real momentum that you are seeing in the market play out here. Now with CMA and MSC it really has reached a tipping point in terms of market maturity.”

The two new members will operate a blockchain node on the Hyperledger Fabric-based distributed ledger and participate in consensus to validate transactions. In addition to sitting on the advisory board, both carriers will assume the critical role of acting as trust anchors, or validators, for the network.

Rajesh Krishnamurthy, executive vice president for IT and transformations at CMA CGM Group, commented: “We believe that TradeLens, with its commitment to open standards and open governance, is a key platform to help usher in this digital transformation.

“TradeLens’ network is already showing that participants from across the supply chain ecosystem can derive significant value.”

André Simha, chief digital and information officer, MSC, added: “The TradeLens platform has enormous potential to spur the industry to digitize the supply chain and build collaboration around common standards. We think that the TradeLens advisory board, as well as standards bodies such as the Digital Container Shipping Association (DCSA), will help accelerate that effort.”


This item appears in the following sections:
Dealing & Trading
Dealing & Trading Platforms
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Financial Risk Management
Trade & FSC Management
Financial Supply Chain Platforms
Trade & Counterparty Risk Mitigation
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