Tech giant IBM and shipping giant Maersk have enlisted a robust team for their worldwide trade Blockchain platform.
The conglomerates have announced on Wednesday that they have enlisted 94 firms for the platform since its spinoff from Maersk last January. At the same time, the partners have christened it with a name: TradeLens.
Backed by Maersk, TradeLens has drawn various establishments, from port operators and customs authorities to logistics companies and even rival seafaring carriers, like Pacific International Lines, all of whom have been trialing the platform.
With the completion of the pilot phase, TradeLens is open for participation through an early adopter program. It is slated to be totally commercially available by the end of this year.
In order to promote the message that TradeLens is an open and neutral platform, IBM and Maersk have revised their marketing strategy. It now calls the project a “joint collaboration” rather than a joint venture.
At the time of the launch, Maersk head of global trade digitization Michael White states that they wanted to be clear that they are not offering a so-called Maersk-IBM-only solution.
While stating that Maersk and IBM are the only two shareholders with both investing in the technology and both owning the IP, White underscores it is completely open to ecosystem participants.
Even though the Maersk press statement described it that way, he states that “It was never about a joint venture.”
However, an IBM spokesperson says that under the collaboration model, the initial 49/51 percent ownership split no longer applies. The two companies will enter the market, in response to industry feedback.
The IBM and Maersk will put the access to the TradeLens platform on sale. The IBM representative further states that the selling party will contract with the customer, as well as receive all fees and revenues instead of sharing it with the other partner.
The spokesperson claims that this new model enables them to introduce the solution to the market quicker while becoming more flexible than the original joint venture model.
TradeLens has been created on the IBM Blockchain platform. This platform uses the open source relative of Linux, the Hyperledger Fabric. This paves the way for a potential “interplay” with other IBM and Hyperledger projects.
IBM Blockchain vice president of global trade Todd Scott says:
“We have architected all of these solutions so that it’s very easy for data to be exchanged between the two different blockchains – take TradeLens and IBM Food Trust for example – if clients were to be inclined.”
To further advance this open supply chain ecosystem, TradeLens will be promoting its open APIs for shipping together with work carried out by shipping standards groups like CEFACT and industry groups like OpenShipping.org. Scott also states:
“On top of the bedrock of blockchain technology we are working with standards, and also have 125 or so APIs, and we are going to give all that access to the developer community so they can even create additional technologies of their own on top of it.”
Still, not everyone will view this as an excellent and amiable invitation to the sector.
International Trade and Forfaiting Association chairman Sean Edwards states:
“It’s fine for them [IBM and Maersk] to say ‘we are open for everyone to join,’ but all they are really saying is ‘come and use our system.”
Also serving as head of legal at Sumitomo Mitsui Banking Corporation Europe, Edwards claims that making everybody speak is not a new problem. According to him, the answer has been to try and create ecosystems like Universal Trade Network, except that they have not really launched yet.
Citing other Blockchain-based solutions specifically designed for banks in order to “optimize trade finance,” Edwards claims that the situation may give way for banks and other establishments to be on various other platforms, just as consumers have multiple passwords and systems to use. The Blockchain solutions Edwards is referring to is related but rather different than the supply chain processes that TradeLens is digitizing. He continues by saying:
“Either there are common enough standards that all the different underlying technologies can actually speak to each other, or you have initiatives that are so big everybody uses it.”
He also says:
“I don’t think somebody like Maersk is going to solve that.”
Notably, TradeLens is not the only competitor in this particular race.
Aside from renowned supply chain payments platform TradeShift, banking giant Citigroup is “in stealth” with a joint trade finance and supply chain platform which is expected to leverage on distributed ledger technology (DLT) as well as internet of things (IoT) and artificial intelligence (AI).
Thus, TradeLens is having a hard time establishing being neutral and appeal to the broadest possible market.
Talking to possible data privacy issues for companies that contend with Maersk’s subsidiaries, White adds that the Maersk side of the collaboration team is a unique and independent entity without any involvement with the commercial activities of either Maersk Line, the shipping container business, or Damco, the logistics provider.
White says that on top of these, the platform has its own privacy defenses, adding:
“Sensitive information from other carriers are kept on separate nodes, so Carrier A cannot see Carrier B ‘s information or carrier C’s information.”
Another potential TradeLens Blockchain “interoperability” function will be some of the trade finance Blockchain platforms established on IBM Blockchain and Hyperledger, like we.trade and Batavia.
Although still rather too soon, one can only imagine a comprehensive platform, so that if radio frequency identification (RFID) trackers suggest physical propinquity to something, a payment can be issued or a document signed or the same.
With regards to trade finance, IBM states that banks are included in the 92 TradeLens pilot partners. However, IBM has yet to identify them. On the other hand, an unnamed source from the trade finance sector indicates that HSBC has “met with TradeLens,” agreeing to “reconnect” after the launch.
As the platform takes off, IBM and Maersk believe that a wide variety of opportunity is waiting to happen once trade finance, marine insurers, and other similar ventures are introduced to TradeLens.
In conclusion, White states:
“We have found is there are number of industries and institutions including financial institutions and insurance companies, that are looking to take advantage of this platform.”