Russia's Transport Ministry Embraces TradeLens, Will Other Governments Join In?
The blockchain-backed shipping platform developed by IBM and Maersk, TradeLens, is increasingly becoming a household name in the shipping industry. Just recently, another huge project was added to the platform. According to a financial media in Russia, Kommersant, the country's Transport Ministry has announced plans to run trials on TradeLens as a shipping solution.
TradeLens runs on smart contracts. In Russia, utilization of this platform is expected to replace the labor intensive paperwork process by providing a single virtual space that brings together all players in the supply chain. These include transport companies, traders, carriers, government agencies and ports.
Growing Demand The entry of Russia's transport ministry on TradeLens comes barely a month after Spain's Port Authority of the Bay of Algeciras (APBA) entered into an agreement to utilize the blockchain platform. Hosting more than 70 million tonnes of cargo annually, Algeciras is among the busiest ports in the European region. Container throughput in this port stood at 4.3 million containers in 2017 alone. By utilizing the TradeLens platform, the APBA expects to enhance the efficiency and security with which it manages documentation and exchanges information with other players in its supply chain. The Port expects to create value for freight forwarders, logistic operators, shippers, and shipping companies throughout the platform. By the end of last year, over 20 port operators and 100 organizations had signed up on the TradeLens platform. Furthermore, reports showed that this blockchain-backed platform had processed over 20 million containers with the number of registered shipments standing at nearly 230 million.
Increasing Adoption On a similar note, leading ports are streamlining their operations via blockchain. Last year, Netherlands' Rotterdam Port partnered with ABN AMRO Bank and Samsung to run blockchain trials for shipping. In the same year, a subsidiary of ports in Abu Dhabi, called Maqta Gateway LLC, became the first in the country to deploy a blockchain solution.
Even as TradeLens gains traction, some industry players believe that blockchain integration in the shipping space will be gradual.
Feroz Sanaulla, LDJ Capital Managing Director for Venture Capital in MENA, Abu Dhabi, Dubai says, "I think the incentives for shipping lines will be clearer once the terminals demonstrate that leveraging blockchain can automate the document checking process and speed up turnaround time - which is a key driver of shipping line cost - so win-win is possible here in terms of less congestion for the terminal as well.”
Some countries are also approaching the platform with caution. For instance, in Russia, the Federal Security Service recommended a review of devices to boost information security, ensure independence, attract specialists from the country and guarantee the continued involvement of Russian companies.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.