Date: Tuesday, February 28, 2023
Source: Sourcing Journal
Nearly three months after Maersk and IBM agreed to shut down their jointly operated blockchain-based global trade digitization and data sharing platform TradeLens, two firms are partnering to fill the void left in its wake.
Electronic trade document platform provider CargoX and CEBS Worldwide, a global integrator of business solutions and a former TradeLens integrator, have teamed up to help former TradeLens users transition to an alternative platform for creating, transferring and processing electronic bills of lading (e/BL) and trade documents.
“The digitalization of trade documentation is in full swing worldwide, and companies need all the support and advice they can get to implement the optimum solutions into their everyday workflows,” said Stefan Kukman, CEO of CargoX in a statement.
CEBS will start migrating current TradeLens customers to its own supply chain finance platform and the CargoX Blockchain Document Transfer (BDT) Platform for electronic trade document exchange.
The companies say that CEBS’s middleware cloud and on-premise platform helps organizations leverage different public blockchains in their enterprise applications, which the partners allege can help save time and money. Companies can keep their everyday workflows and introduce CargoX’s integrated blockchain document transfer features into their existing processes.
“As CEBS was already working with ports and customs authorities using TradeLens, they shared information on the capabilities and benefits of CargoX and about using their framework,” said Satish Swaroop, CEO of CEBS Worldwide. “Customers reviewed both the platform and services offered together, and it made sense to replace it for long-term benefit. As a combination of a reliable platform and framework it made sense to team up to become a one-stop for ports, customs authorities, etc.”
The partners want to help corporations continue the digitization of their bills of lading and trade document workflows.
CargoX’s BDT helps governmental entities and economic operators exchange electronic trade documents instantly and cost efficiently in the supply chain, finance, manufacturing, trading, energy and services industries. More than 104,000 companies have uploaded trade documents to the CargoX Platform, the company says.
Swaroop told Sourcing Journal that CEBS expects more than 50 percent of customers to be migrated by the end of the second quarter. He sees a “huge pipeline” with new ports and customs authorities taking interest in the joint venture.
The race to replace TradeLens marks another chapter in the freight industry’s attempts to eliminate some of the outdated, paper-based bill of lading processes.
A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried, but an electronic transfer increases the speed and efficiency by which this data is delivered. All parties have access to a transparent transaction history, with record-keeping that is designed to be immutable.
“A paper bill of lading travels for several days, sometimes weeks, costs several tens, sometimes even a hundred dollars, and it can still be lost, misplaced or tampered with,” said Kukman. “An electronic B/L, on the other hand, travels around the world in seconds, and if it is transmitted via the blockchain, it cannot be hacked, tampered with or stolen. The transmission path of the electronic B/L—or any other trade document—can be checked at any time, and it is evident when a particular company sent it.”
Additional information such as container tracking or temperature information can be attached to the document.
McKinsey & Co. analysis indicates that adopting an electronic bill of lading could save $6.5 billion in direct costs and enable between $30 billion and $40 billion in new global trade volume.
TradeLens was founded in 2018 to facilitate global supply chain digitization as an open and neutral industry platform. But in November 2022, Maersk and IBM agreed to shut down the platform.
“This vision centered on the ability to enable true information sharing and collaboration across a highly fragmented industry globally,” the TradeLens website currently says. “Unfortunately, such a level of cooperation and support has not been possible to achieve at this point in time.”
In a statement announcing TradeLens’ discontinuation, Rotem Hershko, Maersk’s head of business platforms, had good things to say about the platform itself but hinted that the technology wasn’t making any money.
“TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business,” said Hershko.
The platform was able to onboard multiple major global ocean carriers, including CMA CGM, Mediterranean Shipping Co. (MSC), Hapag-Lloyd, Ocean Network Express (ONE) and Zim Integrated Shipping Services.
Kukman told Sourcing Journal that TradeLens could have done “almost anything for almost anyone in global shipping.”
“We believe that the timeline for the adoption by a big enough crowd was simply too far in the future and consequently their business model was not competitive enough,” Kukman said. “At the same time, more agile and leaner competitors also started to enter the market—including CargoX with our solution focused on electronic trade documents, but also others with their other functionalities for specific target groups.”
CargoX is working with global industry bodies and organizations to advance a modern set of standards and legislation adoption that could minimize friction in global trade. It has established relationships with the International Chamber of Commerce (ICC), Digital Container Shipping Association (DCSA), the World Customs Organization and others.
According to Kukman, these standards facilitate the use and integration of different technological solutions by providing a common set of rules and protocols for interaction between them. This way, the solutions can all use the same rules and connect much faster, simplifying the process for end users.
“There is a clear analogy here with email providers—you can send a message through Gmail and someone will read it in Outlook or another service,” said Kukman. “If the standards did not provide a basis for interoperability, everyone would have to use all email services at the same time. Or, in the case of shippers: everyone would have to use all the electronic bill of lading platforms at the same time to successfully execute their daily tasks.”