Maersk and IBM announced the partnership in March 2017. Shipping and IT giants created a company to commercialize a solution based on Hyperledger Fabric (one of the Hyperledger projects developed by the Linux Foundation) that will replace outdated paper and digital processes in the management of shipping and tracking ships, containers and cargo.
What is TradeLens
TradeLens is positioned as an open and neutral platform for managing sea freight and supply chains, created on the basis of the blockchain. It enables open and largely automated exchange of information and other values between all participants in the supply chain at a fundamentally new level: interaction between participants occurs faster, generates fewer errors, does not require verification by a third party, and costs less.
Key Project Goals
Creating a single ecosystem. The platform brings together all parties involved in the supply chain: cargo owners, freight forwarders, domestic transport providers (including rail and road), sea carriers, ports and terminals, customs and other government agencies. The parties connect and interact within a common neutral network, where processes are standardized and largely automated.
The introduction of the exchange of veridical cue. Real-time TradeLens provides convenient, safe and fast exchange of useful information between all network participants: involved transport, location and cargo details, sales documents, sensor readings and much more. Interested parties can track the status of the cargo and its accompanying documentation as part of their roles: the sender, carrier, customs, consignee and final consumer.
Strengthening cooperation and trust. The project allows to digitize and automate a significant part of the end-to-end business processes that are an integral part of world trade, including import and export processing. Blockchain allows you to ensure the transparency, security, efficiency and high speed of these processes.
Stimulation of innovation. The TradeLens platform lays the foundation for improvement through an open API environment, standardization and promotion of interaction, as well as launching a sandbox and marketplace that allow third parties to create and launch applications on the TradeLens platform.
Principles of TradeLens
TradeLens is based on a fairly simple concept:
- We attach sensors to the cargo, transport and port equipment that track the location and, if necessary, some other indicators: temperature, humidity, shaking, etc. Information from sensors in real time is recorded on the blockchain and becomes available to all interested parties. This allows you to track the cargo and its condition.
- In the cases prescribed in advance, individual sensors can communicate with each other through smart contracts. For example, if a container's sensor gets onto a cargo ship, then it sends information about itself and that inside it to the cargo ship's sensor. Thus, the cargo ship always knows what it is carrying. When this cargo ship arrives at the port, its sensor sends the port information about the vessel and that it is transporting (containers and their cargo).
- These data are used to automatically fill out documents and other interactions: financial calculations, payment of customs duties, audits, and the like. It is thanks to these automatic interactions that the system greatly accelerates and simplifies the workflow, makes financial calculations more reliable and secure.
The blockchain in this scheme plays the role of a database
that is responsible for storing, transmitting and protecting information, and also serves as a “source of truth”. Where by “source of truth” is meant the assurance that the information entered into the system is genuine and does not contain errors and / or inaccuracies. That is, the TradeLens system is itself a validator of data.
Three components of the system
. The TradeLens project is based on its business network:
shippers and consignees, freight forwarders, shipping carriers, ports and terminals, customs brokers, government agencies and other participants in sales chains. Each organization enters information into the ecosystem that can be stored, processed and tracked on the platform throughout the journey.
The ecosystem is divided into three levels:
- Advisory Board. A management authority that develops an ecosystem development strategy and selects validators. Council members can become large companies, representatives of government agencies and international organizations involved in cargo transportation.
- Validators. Network members (servers, nodes) that verify the authenticity of transactions and create new blocks of the blockchain. Usually, the status of validators receive large players. For example, in May 2019, the Mediterranean Shipping Company (MSC), the second largest after Maersk, and the carrier CMA-CGM, the fourth in terms of carrying capacity, joined TradeLens. These are very important companies, so they were accepted into the council and given the status of validators.
- Participants. Companies, government agencies, ports, customs, non-profit and other organizations that connect to the network. Structure involved in freight and sales chains can become a member of the network TradeLens.
. A software
product based on Hyperledger Fabric and IBM Cloud blockchain technologies
. Allows you to record, store and share information and values. The exchange takes place directly or through smart contracts.
Marketplace. An environment that allows TradeLens and third parties to develop, test and deploy applications and smart contracts. Testing takes place in the “sandbox” - a virtual environment TradeLens with the same properties and data set as a regular network, but operating with false money and does not affect the real world.
Advantages of TradeLens
Cargo Owners / Shippers. Reduced costs, increased predictability, reduced inventory, increased consumer confidence and the ability to track partner actions. In addition, the reduction in delivery times gives the opportunity to enter new markets.
Ports / terminal operators. Makes all processes more efficient, reducing vessel and equipment downtime to a minimum. Gives more data about each vessel, container and cargo, which helps to reduce the number of errors and cases of fraud.
Sea carriers. Reduces port downtime, which today is the norm due to paperwork and complex customs processes. Increases the efficiency of supply chains and increases the transparency of cargo transportation - the captain always knows that he is lucky, in what condition the cargo is and who owns it (important for combating smuggling, corruption, terrorism and money laundering).
Government agencies. Automation of processes reduces costs and increases the speed of information processing - less manual work. Standardization helps to improve the quality of information, transparency - more effective audit of goods, shippers, vehicles, ports, etc.
Land carriers. Transparency and automation improve the quality of planning and the efficiency of transport processes: fewer queues, quick execution and filling of documents, automatic financial calculations, etc.
Forwarders / 3PLs. Connecting to the system gives access to tools for more efficient and faster customs clearance, tracking of goods and their condition in real time and tracing.
Financial Service Providers (banks, investment funds, trading floors, insurers, etc.). When connected to the system, they get access to reliable and up-to-date information sources.
Testing of TradeLens
Until August 2018, the TradeLens project was in beta testing, which lasted more than a year. IBM and Maersk tested the concept as such, and then the cost-effectiveness of the platform. The chain of flower delivery from Africa to Europe was chosen as a pilot project.
The supply chain of flowers in the pilot project TradeLens
First, Maersk analyzed one batch of flowers sent from Mombasa to Europe in 2014. It turned out that this single delivery generated more than 200 transit traffics between 30 different organizations, including manufacturer, logistics companies, banks and government agencies. These 200 messages created a stack of documents about 25 centimeters high.
Then, Maersk and IBM connected all the participants of this delivery to the TradeLens blockchain (at that time Global Trade Digitization, or GTD) and sent a new batch of flowers. As soon as the manufacturer sent a packing list via PC or mobile device, this action was recorded on the blockchain and, in parallel with this, a smart contract was initiated. The smart contract accompanied the cargo throughout the supply chain, automatically filling out documents, stamping and making financial calculations. All these actions were also recorded on the blockchain.
On the left - the traditional interaction model, on the right - the blockchain model
The pilot project confirmed the concept, but revealed a number of problems: the lack of uniform standards and proper communication
between the parties, as well as the need to train staff of companies and government agencies involved in the process. When most of these problems were resolved, testing continued. But now other supply chains have been connected to the system, the number of which has gradually increased.