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Global Supply Chain News: Time for the Blockchain Wars in Global Shipping


Amid Some Questions if It is the Right Technology for the Job, Blockchain Service to be Offered by The Ocean Alliance, Competing with Maersk-based TradeLens

Nov. 7, 2018
SCDigest Editorial Staff

After announcing a partnership in early 2018 for bringing Blockchain technology to track ocean shipping activity in August, Maerk Line, the world's largest ocean container shipping line, and IBM launched a joint venture called TradeLens, which would use Blockchain technology to automate and integrate global shipping processes.

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The memorandum of understanding for the new network also includes major marine terminal owners DP World, Hutchison Ports, PSA International, and Shanghai International Port.

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Blockchain is a technology for creating a "distributed ledger" that is encrypted in such a way as to make any tampering nearly impossible. It's being promoted by some as a way to drive data authenticity and accuracy among numerous parties that need to provide or access that data, and to automate many cumbersome manual processing of documents associated with moving ocean cargo.

TradeLens planned "to promote more efficient and secure global trade, bringing together various parties to support information sharing and transparency, and spur industry-wide innovation," the company said in its launch announcement.

Besides Maersk and IBM, a host of other shippers, terminal owners, freight forwarders and customs authorities said that they would be using TradeLens. Now after a few months of operation, TradeLens says it has recorded nearly 200 million transactions related to container shipping, growing by one million per day.

Each individual shipment of a container generates a number of such transactions, which would be multiplied by the thousands of containers that might be carried on a single containership sailing, so those seemingly giant numbers need to be put in context.

While TradeLens says it has attracted about 100 partners onto its platform, it has only managed to get one carrier outside the Maersk Group — Pacific International Lines – to come onboard. That inability to attract any of the major container carriers has cast doubts on the feasibility of TransLens, a point recently acknowledged publicly by IBM, according to the Journal of Commerce.

On top of that now comes a competitive entry in the global logistics Blockchain wars.

The Ocean Alliance, one of three major global container shipping alliances that competes with the Maersk-based 2M alliance, announced last week that it was forming its own Blockchain service.

The new service will be called the Global Shipping Business Network. Its carrier backers include CMA CGM, Cosco Shipping Lines, Evergreen Marine, Orient Overseas Container Line (OOCL), and Yang Ming. Collectively the companies represent about one-third of global container ship capacity and jointly offer service under The Ocean Alliance consortium banner.

The memorandum of understanding for the new network also includes major marine terminal owners DP World, Hutchison Ports, PSA International, and Shanghai International Port, which together account for a similar share of global container throughput.

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While Maersk has IBM as its technology partner in TradeLens, the Global Shipping Business Network will use technology from Hong Kong-based CargoSmart, a transportation management software company funded by OOCl, which in turn was acquired by Chinese state-owned Cosco earlier this year.

CargoSmart will provide software that aims to connect "carriers, terminal operators, customs agencies, shippers, and logistics service providers to enable collaborative innovation and digital transformation in the supply chain."

The CargoSmart application in turn will use Oracle Cloud Blockchain Service, a rival to IBM.

The GSBN's test project will be automating the flow of documents, invoices, and cargo release for the carriage of dangerous goods. The test, scheduled to begin in December, hopes to “digitize and organize documents and automatically connect with relevant parties to streamline the approval process.”

There is also another Blockchain test project going on involving terminal operator APL (a unit of carrier CMA CGM ), brewer AB InBev, consulting firm Accenture, and 3PL Kuehne + Nagel.

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