Modern Terminals Limited (MTL), the second largest container terminal operator in Hong Kong is looking to use blockchain technology to help modernize and restructure processes in its supply chain. To achieve its goals, MTL has joined the TradeLens project; a distributed ledger solution platform developed by IBM and Maersk. The platform has begun to see increased level of adoption as over 20 global port operators, and terminals have joined the TradeLens initiative; this includes over 230 docks located on five continents like PortBase, Port of Bilbao, PortConnect, Port of Halifax, Port of Philadelphia, PSA Singapore, Patrick Terminals, and the Port of Valencia.
The official press release issued by Modern Terminals Limited stated that the TradeLens ecosystem seeks to “digitize and streamline processes in the global supply chain to deliver higher efficiency and lower cost.”
TradeLens Supply Chain Solution
Many companies are unaware that they incur various hidden costs due to the use of outdated, flawed, and manual operational processes. A common example of these inefficiencies is the use of paper-based processes which can lead to information manipulation, data error or loss. Over time the accumulation of these hidden costs have a detrimental effect on the competitiveness of these companies.
With the availability of TradeLens, ports and terminal companies are now able to transform their operations from conventional paper-based systems to a more efficient digital system rooted in blockchain technology. This move would be quite significant considering that supply chain inefficiencies cost industries around the world billions of dollars every year.
Back in January, Vincent Clerc, Maersk’s Chief Commercial Officer expressed his confidence in blockchain development for supply chain management. According to him:
“The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit.”
Improving Trust in The Supply Chain
TradeLens will permit the digitization of trade data, which will increase transaction speed and supply chain efficiency. TradeLens claims that they were able to reduce shipment time by 40% during their trial run; this improved speed could allow supply chain participants to cut down costs, leading to considerable savings across the board.
With this distributed ledger technology (DLT) system, participants are now able to broadcast the status of a container in real time as it moves through the supply chain, this data is updated to the blockchain creating an immutable record which will improve trusts amongst the participants. Like in many industries, doing business without trust among partners is a real challenge but blockchain could be very useful in this regard. Peter Levesque, Group Managing Director of Modern Terminals, told SCMP that:
“It does not seem like much, but it is. Without blockchain, you’re going on faith that what’s on the document is what’s in the container.”
TradeLens Expected Growth
As a network member of the blockchain supply chain platform, Modern Terminals Limited participation will allow the company to evaluate the performance, usability, and functionalities of TradeLens. The company will also function in an advisory capacity by offering suggestions on how and where the blockchain supply chain platform can be improved. This blockchain initiative reinforces the company’s efforts to provide its customers with state of the art port services as it has been investing in IT enhancements and port infrastructural improvements over the years.
Aside from TradeLens, IBM has been committed to the development of several other blockchain initiatives for a wide range of applications. So far, the TradeLens logistics platform has been able to successfully track thousands of shipping containers while completing millions of transactions. As TradeLens and other blockchain based supply chain platforms mature, more companies will be willing to retire their archaic supply chain management solutions and be more inclined to partner with blockchain solution providers that offer innovative ways to modernize the supply chain while boosting overall productivity.
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