Marvin Erdly, head of TradeLens for IBM Blockchain, told Cointelegraph that as supply chains become digitized, manual paper-based processes, like processing bills of lading, are removed from the equation. “These processes are now embedded in blockchain networks and smart contracts that are trusted by all parties involved,” he said.
Erdly further shared that both CMA CGM and MSC, together with Maersk, will act as platform foundation carriers by running nodes on the TradeLens network. These organizations will validate transactions across the network, ensuring that documents shared between participants are authentic and valid.
The addition of CMA CGM and MSC also brings data from nearly half of the world’s ocean container cargo to the TradeLens network, which has already tracked 30 million container shipments and roughly 13 million published documents since its launch in 2018.
COVID-19 highlights need for blockchain-based supply chains
While it’s notable that CMA CGM and MSC have joined the TradeLens network, this also demonstrates how the coronavirus pandemic has prompted the need for digitized supply chains.
According to Erdly, automating complex business-to-business processes have become more important than ever before due to the pandemic. In order to ensure the future success of the global supply chain, which is a $50 trillion dollar industry, blockchain is slowly but surely becoming a necessary component:
“The initial challenge faced by the TradeLens network was reaching a critical mass. The more entities we have on the network, the more valuable the network becomes. The COVID-19 pandemic has pushed the platform into having a critical mass. Other entities will now want to join, ultimately creating a network effect. This is why CMA CGM and MSC joining is such an important milestone.”
By joining TradeLens, CMA CGM and MSC will be able to digitally share permissioned shipment information between supply chain entities. The platform, which is powered by IBM Blockchain and IBM Cloud, makes it possible for entities to access data, while keeping sensitive information private for organizations. This provides network participants with a comprehensive, transparent view of data as cargo moves around the world.
As Don Tapscott writes is his book, Supply Chain Revolution, this in turn opens up the internet of value, where assets can finally be moved digitally between parties:
“Blockchain can enable the digital handling of trade documents, such as purchase orders and bills of lading. Near real-time sharing and verification of trade documents on the blockchain will also help streamline the process of asset tracking and offer freight forwarders visibility.”
Ultimately, blockchain presents an important business opportunity for companies working with multiple entities, as it brings transparency, trust and collaboration to complex processes that typically rely on paper documents. For example, an important milestone in the process of onboarding CMA CGM and MSC was a 15-customer pilot involving more than 3,000 unique consignments,100,000 events and 6,000 containers. This pilot demonstrated how the TradeLens platform distributes and shares shipment data across various supply chains with speed and accuracy.
Andre Simha, global chief digital and information officer for MSC, noted that TradeLens is an important initiative in the digitalization of global shipping and logistics, mentioning the platform clearly has the potential to help carriers and their customers increase transparency and reduce errors and delays. “This all comes at a crucial time when the industry is re-thinking and improving the resiliency of supply chains,” he said. Simha further noted that by integrating with TradeLens, the company can begin to show their customers and business partners how they can create value using a blockchain platform.
Ironically enough, getting customers to understand the value of a blockchain network should become easier due to the pandemic. Vincent Clerc, CEO of ocean and logistics for A.P. Moller-Maersk said that the TradeLens ecosystem is indeed gaining momentum during a time when customers and supply chain stakeholders are increasingly turning to digital and online solutions. Clerc noted that organizations are beginning to see the value of digital products and platforms for keeping supply chains flowing during lockdowns that have complicated manual and physical interactions between stakeholders in the logistics value chain.
Clerc further noted that since the pandemic began, Maersk has seen a 27% percent increase in mobile business transactions on the Maersk app. “In a world now where resilience is king, TradeLens has an important role to play in terms of providing supply chain resilience and in increasing the customer experience through increased visibility,” he remarked.
Blockchain brings value to supply chains
Overall, it’s become clear that blockchain will continue to play an important role in the digitization of supply chains. This has become even more apparent due to COVID-19.
“This further validates the notion that blockchain is here to stay, as it’s becoming a critical element for businesses that need to transact across multiple entities,” said Erdly. Erdly also pointed out that TradeLens has continued to scale over the years, noting recent additions of new ports and terminals joining the platform. Growth should continue, as a network effect is closer to being achieved now that CMA CGM and MSC are live on the platform.