
// Blockchain
Maersk Blockchain Use Case
// Blockchain
In early August 2018, the IT giant IBM Corp. and global shipping company A.P. Moller-Maersk Group has announced the official launch of the platform for supply tracking and supply chain management called TradeLens (formerly known as Global Trade Digitization, or GTD). This is the first of the projects, the launch of which can dramatically improve the industry and the global economy as a whole.
In the article you will find a detailed description of this case:
After the separation, the transport and logistics department received more than 600 vessels for operation, whose gross tonnage amounted to more than 3,8 million registered tons, more than 15% of the world TEU. Such a volume is equivalent to the supply chain of the whole city: a huge volume of operations, goods and interlacing ties. And current management systems cannot cope with all this logistics:
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based on Hyperledger Fabric (one of the Hyperledger projects developed by the Linux Foundation) that will replace outdated paper and digital processes in the management of shipping and tracking ships, containers and cargo.
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.
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.
The ecosystem is divided into three levels:
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.
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.
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.
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.
Using the TradeLens platform throughout the year showed that:
This is evidenced by the recent decision of CMA-CGM to join TradeLens without disconnecting from GSBN (with this participant, the share of TradeLens is 32.5%). Most likely, CMA-CGM want to check which platform will show itself better, and only after that the company will make the final choice. True, another option is possible: CMA-CGM will use both platforms.
It is too early to judge which platform the market participants will choose and whether it will be necessary to make such a choice. It is quite possible that all profile companies and structures will simultaneously use several blockchain solutions to maximize market coverage, even if some processes are duplicated. If the players make a choice in favor of one platform, then it will become the industry standard. And TradeLens has every chance to win this race.