A blockchain initiative for seaborne cargo aimed at cutting costs and improving tracking of shipments is getting a boost with the addition of two big container shipping operations.
Germany’s Hapag-Lloyd AG and Japan’s Ocean Network Express said Tuesday they will join the TradeLens platform launched by A.P. Moller-Maersk A/S and International Business Machines Corp. , giving the program five of the world’s six largest carriers controlling about 60% of the oceangoing container cargo capacity.
Switzerland-based Mediterranean Shipping Co. and France’s CMA CGM SA, the world’s second and third biggest box-ship operators behind Maersk, joined the effort in May.
“Now, with five of the world’s six largest carriers committed to the platform, we can accelerate that transformation to provide greater trust, transparency and collaboration across supply chains and help promote global trade,” said Martin Gnass, managing director of information technology at Hapag-Lloyd.
For ocean carriers, blockchain technology allows participants to share information as goods move through maritime-focused supply chains.
The system also promises to reduce the cost of paperwork. Maersk said the maximum cost of the required documentation to process and administer many of the goods shipped each year makes up roughly one-fifth of the physical transportation costs.
Widespread participation across the supply chain is key to making TradeLens work.
Many companies, including transportation operators and freight forwarders that manage the flow of goods, have been reluctant to share detailed information about shipments, which often are handled by multiple cargo companies, for fear that competitors will use the data to lure away customers. The blockchain platform seeks to overcome that concern by allowing only trusted participants who contribute information to a common electronic ledger.
CMA CGM, the world’s fourth-largest container operator after Maersk, MSC and No. 3 Cosco Shipping Holdings Ltd. of China, late last year joined the Global Business Network, a similar blockchain initiative anchored by Cosco and other Asian carriers.
Source: Wall Street Journal