This week features additional news related to Blockchain technology partnerships in the global ocean container transport segment as carriers, shippers and logistics entities continue to sort out most appropriate approaches to leverage this technology. Make no mistake that the primary goal of these transportation technology pilots are to both determine proof-of-concept and business value of specific technologies, achieve industry scale, and to similarly determine added technology anchored business opportunity that comes with that.
Two major European shipping lines, France based CMA CGM and Swiss based Mediterranean Shipping (MSC) have elected to join the TradeLens blockchain technology pilot efforts being stewarded by A.P. Moeller Maersk and technology platform provider IBM.
These three container carriers control a reported half of all ocean container transport, which represents a significant influence in efforts to make TradeLens a more meaningful technology adoption effort. MSC and Maersk Lines are both part of the 2M global shipping alliance, one of three global shipping alliances, that pool capacity among major global trade routes.
What makes the announcement rather interesting is that back in November of last year, five of the then largest container shipping lines including CMA CGM reportedly joined forces to create new IT and Blockchain technology standards for the industry. That effort was directed as an industry framework to adopt standards that would be openly and freely available to all third parties such as customers, ports and customs authorities. Obviously, common standards and broad industry participation are rather important for wide-scale adoption of any promising technology, including Blockchain.
At that same time, CMA CGM, a member of the rival Ocean Alliance, with shipping lines Cosco Shipping, Evergreen and OOCL had previously signed on to the Global Business Shipping Network, a Blockchain technology pilot formed for similar purposes.
Since its introduction in the summer of 2018, Maersk and IBM have worked with a multitude of potential partners to identify opportunities to provide added efficiencies utilizing smart contracts and distributed ledgers to prevent delays, automate and verify shipment transactions, or address other stakeholder challenges. Feedback from potential interested stakeholders caused a modification of the go-to-market strategy, changing from the original corporate joint-venture to a technology collaboration among Maersk and IBM.
This new development involving CMA CGM has industry watchers of the view that an influential carrier participating in two industry technology efforts could be interpreted as a sign that there still remain concerns for having just a single Blockchain platform. As with any potential promising technology, influential industry players seek potential financial gain or added revenues related to use of the technology. There are further challenges in determining which Blockchain technology approach can scale to support high volumes of transactional activity across distributed ledgers. A further consideration is architectural, namely whether to move forward with centralized or de-centralized Blockchain framework or a private or industry-based technology platform.
Regarding the announcement. The Wall Street Journal reported that global customs authorities remain skeptical of the technology and are seeking evidence that Blockchain can reduce the burden of transactional volumes. At the same time, customs inspectors are likely concerned that the technology does not eliminate their current roles in global trade.
Supply Chain Matters Perspective
No doubt, Maersk and the 2M Alliance represents an influential shipping industry voice. According to reporting by The Wall Street Journal, to secure the support of carrier CMA CGM in TradeLens, Maersk agreed to take a share in Traxens, a technology enabled container tracking business whose investors are CMA CGM as well as MSC.
France based Traxens provides an electronic device which is permanently attached to a container to capture and transmit data on position and condition, a purpose designed mesh radio network to support transmission needs of the unique container environment and TRAXENS-HUB, a Cloud based platform which gathers data from the electronic tracking devices for processing by various global transportation services stakeholders.
We often talk about traditional service companies transforming themselves into technology services companies. Readers should make no mistake that the primary goal of many of these transportation technology pilots is to both determine proof-of-concept and business value of specific technologies, and to similarly determine added technology anchored business opportunity that comes with that.
It’s a high stakes game among influential industry players.
From our lens, the key outcome will be the business and technology model that can accommodate the majority of stakeholder business process and decision-making interests, including shippers, logistics services providers, shipment recipients and the principle carriers as-well.
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