Two of the world’s largest shipping companies have joined TradeLens, a blockchain-based platform for global trade developed by Maersk and IBM. It marks a significant step forward for the project, which has previously been criticised by rivals for being too dominated by Maersk.
MSC and CMA CGM, the world’s second and fourth-largest container shipping companies, have become members of TradeLens, a project aimed to improve efficiency in an industry still largely dominated by manual, time-consuming and paper-based processes.
Built on blockchain technology, the TradeLens platform connects all parties in the trade ecosystem, enabling them to interact and collaborate digitally, as well as share and view real-time shipping data. The attributes of blockchain are ideally suited to large networks of disparate partners: it establishes a shared, immutable record of all transactions and allows permissioned parties to access data in real time.
The platform also enables participants to digitalise and exchange trade documentation – anything from packing lists and shipping instructions to bills of lading and certificates of origin – all backed by a secure, immutable audit trail. Its trade document module, called ClearWay, automates various businesses processes, such as import and export clearance, with smart contracts ensuring that all required approvals are in place.
TradeLens is a result of a collaboration between Maersk and IBM, which has been underway for more than two years. Last year, the two companies finally announced they were live with an early adopter programme, which at the time involved 92 participating organisations from across the globe.
Today, TradeLens has more than 100 participants, which include port and terminal operators, ocean shipping lines, customs authorities, freight forwarders and logistics companies, and the platform processes over 10 million discrete shipping events and thousands of documents each week.
The addition of MSC and CMA CGM means data for nearly half of the world’s ocean container cargo will now be available on TradeLens.
“CMA CGM and MSC will operate a blockchain node, participate in consensus to validate transactions, host data and assume the critical role of acting as ‘trust anchors’, or validators, for the network,” TradeLens says in a statement, adding that the two firms will be on the TradeLens advisory board to advise on standards for neutrality and openness.
The backing from MSC and CMA CGM is crucial in TradeLens’ journey towards becoming an industry-wide platform. It follows criticism by industry players over “too much Maersk control” of the platform and questions around the fact that the project had (until now) only managed to attract one carrier outside the Maersk Group, namely Pacific International Lines (PIL).
The news of the new members also comes on the back of the launch of a rival consortium late last year, called the Global Shipping Business Network (GSBN), which also includes CMA CGM, as well as ocean carriers Cosco, Evergreen Marine, OOCL and Yang Ming, and terminal operators DP World, Hutchison Ports, PSA International and Shanghai International Port.
CMA CGM has not commented on whether it will continue its membership of GSBN after joining TradeLens.
Talking about the company’s decision to join TradeLens, Rajesh Krishnamurthy, executive vice-president of IT and transformations at CMA CGM Group says: “Digitisation is a cornerstone of the CMA CGM Group’s strategy to provide an end-to-end offer tailored to our customers’ needs. We believe that TradeLens, with its commitment to open standards and open governance, is a key platform to help usher in this digital transformation.”
“The TradeLens platform has enormous potential to spur the industry to digitise the supply chain and build collaboration around common standards,” adds André Simha, chief digital and information officer and MSC. “We think that the TradeLens advisory board, as well as standards bodies such as the Digital Container Shipping Association, will help accelerate that effort.”
According to TradeLens, the joining companies will promote the solution and create complementary services on top of the platform for their customers and partners.
No banks are officially part of TradeLens at this stage, but they are “on our roadmap”, Marvin Erdly, global trade digitisation leader at IBM Blockchain, told GTR last year.
“We are currently having discussions and workshops with a lot of financial institutions, both for trade finance and trade insurance, and we will continue to do that and uncover what those capability requirements are and likely have something out in 2019,” he said at the time. “It’s not something we are going to be doing by the general availability release, but it’s absolutely a critical part of our plans.”
The idea is that banks providing trade finance products will be afforded increased visibility of key events affecting their financing, as well as the digital documentation supporting the transactions. It is hoped that this will enable them to free up more capital to lend.