The TradeLens platform will employ smart contract services for complex shipping solutions to further streamline the global supply chain.
Tech giant IBM and Denmark based logistics giant Maersk announced the launch of a blockchain-powered TradeLens platform that aims to overhaul and revamp the global supply chain. The two companies had already announced about working on this blockchain solution to streamline global shipping and logistics.
Today, TradeLens has more than 94 companies from the logistics space already registered with the platform to use its blockchain solutions and streamline their shipping operations. Some of the key clients of ICM and Maersk, for its TradeLens platform, include customs authorities from Saudi Arabia, Australia, Singapore and Peru. The Customs Administration of Netherlands has also signed up for the TradeLens service and expects to handle around 15 million shipping containers which amount to nearly one-third of the trade of entire Europe, says Frank Heijmann, the agency’s head of trade relations.
The official press release notes that both the companies – IBM and Maersk have decided to modify its market model and instead of previously being regarded as a joint venture, this project will not proceed as a joint collaboration between the two companies. Mike White, TradeLens leader for Maersk, said:
“Our joint collaboration model allows us to better address key feedback from ecosystem participants while ensuring TradeLens interoperability and data protection among Maersk, IBM and all ecosystem participants. We strongly believe this will maximize industry adoption.”
The TradeLens platform aims to cut the involvement of the middlemen as much as possible while reducing costs. The platform is also expected to bring in a smart contract service that can handle complex trade. IBM general manager and head of the blockchain, Marie Wieck said:
“We have seen a lot of skeptics talk about the validity of blockchain solutions. And, I think with over 90 organizations and over 150 million events captured on the system we really are seeing proof in the pudding in terms of where people are spending their time to get benefits from blockchain.”
Wieck also noted that the blockchain-powered platform cuts the time period between each intermediary steps of the supply chain to almost zero. This can help companies save as much as 40% of their shipping costs which can amount to thousands of dollars. Moreover, the blockchain platform will give its users a real-time view into all of their shipments as well as the availability status of the nearest port locations. Wieck said:
“TradeLens is leveraging the benefits of blockchain as a technology for distributed information sharing. Whatever might be needed by customs and regulators to ensure efficient and safe trade, all of that information is available in real time to the participants.”
However, using the TradeLens platform will cost its customers a certain amount of fees. The fee structure has yet not been finalized but it is mostly expected to be on per container basis. Customers who want to use the smart contract solutions for complex shipping activities will have to pay extra. Of course, the benefits and saving made by the companies using TradeLens shall far outweigh the fees paid.
While commenting on the development of the TradeLens platform, Bridget van Kralingen, senior vice president, IBM Global Industries, Solutions and Blockchain, said:
“We believe blockchain can play an important role in digitizing global shipping, an area of the global economy that moves four trillion dollars of goods every year. However, success with the technology rests on a single factor –bringing the entire ecosystem together around a common approach that benefits all participants equally. Our work with Maersk and other enterprises in the shipping ecosystem has shown that blockchain can be used to form a strong, connected network in which all members gain by sharing important data and that together we can transform a vital part of how global trade is conducted.”
Note that the TradeLens platform is rolled-out on a pilot basis and available to its participants through an early adopter platform. A fully commercial launch is expected by the end of this year. A few months back in May, AP Møller-Maersk unveiled the world’s first decentralized platform for marine insurance called Insurwave.