A1 on logistics innovation series
At A1 Worldwide logistics we are always intrigued by new and innovative technology. That’s why we were interested when two titans of industry announced that they would be Joining forces to upend the logistics industry. Tasked with bringing the innovation of blockchain to the logistics management, TradeLens was created jointly by IBM & Maersk. These two ‘Old guard’ companies have been working on an innovative interlocking system of blockchain backed ports to reduce the number of intermediaries required in logistics management, and therefore, the related overhead. The beginning phases of TradeLens have shown to have a positive effect and have thus far resulted in over 156 million shipping events globally. Currently, the number of events is on track to grow by over a million a day.
As of 2018, shipping companies account for over 20% of the globes supply chain. Logistics management is a rapidly expanding global business, and the blockchain technology hopes to create a frictionless system for shipping and logistics. TradeLens has the advantage of being the first mover in the logistics space and, therefore, IBM and Maersk stand to reap the rewards if TradeLens proves its utility and long-term viability to the industry.
TradeLens is currently in beta form, and its creators are still on the search for early-adopter companies and users. Another benefit to TradeLense is that it is bringing smart contracts to clients who currently rely on legacy shipping systems. Smart contracts significantly reduce the need for traditional shipping orders facilitated through intermediaries.
A1 believes that introducing blockchain technology to the global logistics management industry is the obvious step to making believers out of nonbelievers. While most companies don’t know how blockchain can affect their companies bottom line, this is an important and much-needed step forward for the logistics management industry.
With over 152 million shipping events captured by TradeLens to date, investors have already begun to see the utility and benefits of blockchain for themselves.
TradeLens and by extension blockchain works by giving individuals a blockchain node which allows them to send funds without a traditional bank. The blockchain is a potential boon for the shipping and logistics industries given how costly it has become to send and receive money through international banks which often take an outsized percentage of the funds being transferred electronically from shipper to receiver.
The main difference between TradeLens and similar blockchains like Ethereum and Bitcoin is in how TradeLens monetizes itself by charging users and companies to enter the blockchain. Cryptocurrency, in general, is “permissionless” meaning that anyone can access and use them. However, for a shipping or logistics company to obtain the full efficiency of TradeLens, they will eventually have to pay IBM or Maersk to reap the total rewards of the platform.
A1 Worldwide logistics is continually looking toward the future of logistics management. With blockchain and related innovations becoming integrated deeply into the industry over the last ten years, it is one of the most effective ways to keep information and money secure. As A1 Worldwide logistics is well versed in the inner workings of the blockchain, and we are confident that it will increase the productivity of supply chain logistics in the near and far future.
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