Nobody Wants To Join Maersk And IBM
10 months ago, Maersk in collaboration with IBM launched a blockchain project called TradeLens, a distributed ledger technology (DLT) platform for supply chains. The project has problems with attracting other carriers.
Lately, there have been attempts to implement blockchain technology into global shipping. Port of Rotterdam joined forces with Samsung to test the technology in their deliveries. IBM itself does a lot to use blockchain in its ventures. Earlier this month, the IT mogul announced food traceability platform based on this technology.
Rivals don’t want to cooperate
TradeLens is an open and neutral industry platform based on blockchain’s DLT. According to the website, “The platform promotes a more efficient, predictable, and secure exchange of information in order to foster greater collaboration and trust across the global supply chain.” It seems like a great idea.
So far, the two companies have attracted only one other firm, though. Pacific International Lines (PIL) joined the project. The PIL is the 17th enterprise in the world based on the cargo volumes. However, that’s not enough to succeed. So, why doesn’t anybody else want to join the platform?
The answer is simple: control. Other carriers would take part in the project, but they want to have equal rights. TradeLens brands itself as a “joint collaboration”, but only IMB and Maersk have full and equal rights to the intellectual property (IP). Simply put, other companies don’t want to be just ‘other participants’ and give all control to the shipping giant.
We need to work together
Marvin Erdly, head of TradeLens at IBM blockchain, recognizes that onboarding other large carriers is crucial for TradeLens. According to Erdly:
“I won’t mince words here – we do need to get the other carriers on the platform. Without that network, we don’t have a product. That is the reality of the situation.”
Marvin Erdly acknowledged the concerns of other carriers but didn’t say anything about possible new arrangements.
The chiefs of two large shipping firms have already dismissed the Maersk-IBM blockchain solution. CMA CGM (the third biggest in the world) and Hapag-Lloyd (the fifth largest) call the project as unusable.
IBM and Maersk have signed other parts of the supply chain, including global ports, beneficial cargo owners, logistic companies and customs authorities. Michael J. White, Maersk’s TradeLens leader, said that the project already had attracted over 100 participants. Nevertheless, without other carriers, TradeLens won’t thrive.
Alternative players involved
Accenture Freight & Logistics Services has developed a blockchain pilot in cooperation with APL (American President Lines, 12th largest), a Singapore-based carrier, and Kuehne + Nagel, a freight forwarding giant. The concept for them was to build this project one step after another. Whenever they signed new shipper, they searched for a forwarder, a shipping line and a customs authority. Thanks to that, everyone is involved in the process.
“Right from the beginning, everybody accepts their competitors will be joining and that they would have the same rights. This is how you make an industry platform successful,” said Adriana Diener-Veinott, the global lead for Accenture Freight & Logistics Services.
Today, we do not have enough information to determine which path is better and more efficient. IBM with Maersk are big players and can attract others just because of their market influence. On the other hand, Accenture gives its partners more rights and equal IP. Next few months should give us answers who had a better idea.
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