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Everyone believes in blockchain – but no one trusts each other

Even though nine out of ten executives in the transport and logistics sector project that blockchain will transform the shipping sector, only a very small part of the sector is really betting on the technology, concludes Boston Consulting Group, BCG.

The firm has interviewed more than 100 executives from shipping and freight forwarding companies about their relationship to and ambitions with blockchain technology in a report, available here.

The technology’s potential is hard to miss in a shipping sector in which there are billions of dollars to be saved by, for instance, automating data connections between shipping companies, ports and customs authorities.

And the industry’s top executives are aware of this, as illustrated by two projects such as Maersk’s Tradelens platform and the Global Shipping Business Network, GSBN.

But according to Boston Consulting Group’s global head of transport and logistics, Senior Partner and Managing Director, Denmark, Ulrik Sanders, the competing blockchain platforms also illustrate a paradox in the sector.

“On the one hand, Tradelens and GSBN show that everyone sees the benefits in and the need for a blockchain platform. But blockchain is only brilliant as an industry solution, and the smart aspects disappear if there aren’t enough players on board,” Sanders tells ShippingWatch.

A paradox

More than half of the senior executives in the report project that blockchain will, already a few years from now, disrupt the transport and logistics sector, but close to 75 percent have not yet even considered the technology or have only dealt with it superficially.

Furthermore, only 16 percent of the executives included in the survey say they feel they have a clear understanding of what blockchain is. Only one in five companies have blockchain on their list of top ten focus areas.

This leaves the following result: The implementation of blockchain has fundamentally been slower than anticipated.

And according to BCG, this is paradoxically due to the very lack of coordination and mutual trust that the blockchain technology is designed to resolve. As the consulting group says, this represents “the industry’s paradox.”

“It has proven difficult for Maersk to go out, as the biggest player in a competitive market, together with IBM and make the other players trust that Tradelens is entirely neutral – even though this fear is unfounded”


Ulrik Sanders, senior partner and managing director for BCG in Denmark

Tradelens is fully aware of this paradox, as it has so far not been possible to get other competitors to join the platform.

“Without the network we don’t have a product,” as Tradelens’ IBM chief, Marvin Erdly, told Coindesk in October.

But the objective to bring competitors on board has been difficult for Tradelens, and according to BCG’s Sanders, this illustrates the lack of trust in relation to blockchain’s entry into shipping:

“It has proven difficult for Maersk to go out, as the biggest player in a competitive market, together with IBM and make the other players trust that Tradelens is entirely neutral – even though this fear is unfounded. The fear of making one player the owner of such valuable information is, for good reasons, too big,” says the BCG chief.

Neutrality is key

This lack of coordination and an eco-system which everyone trusts is seen by 60 percent of the respondents in the BCG study as a major barrier preventing the technology from being successful.

Hapag-Lloyd and CMA CGM declined to join Tradelens already early in the process, as they, despite the promises of transparency, allegedly feared that it would give the Tradelens-owners a competitive edge.

But what is the path forward, when the shipping industry believes in blockchain, but the players do not trust each other?

“The potential and the technology is there, so it’s a matter of establishing the right consortium. I think that, for this area specifically, they should try to eliminate competition and stand shoulder to shoulder, as was the case with Inttra,” says Sanders.

The trading platform Inttra was launched at the beginning of this millennium, before being sold late last year to US-based IT and logistics firm E2open.

Maersk, CMA CGM, MSC, Hapag-Lloyd and Japan’s ONE announced their own joint association shortly after that, which will work to create standards across the sector.

Here, spokesperson and chief information officer at MSC, André Simha, pointed to neutrality as the key word. This was one of the reasons the liner company declined to join Inttra, which was at the time partly owned by an equity fund.

The decisive thing is to ensure the neutrality while also having sufficient capital to complete it, and this could be done either through an independent third party or an association consisting of many different stakeholders, as in this case”


Ulrik Sanders, senior partner and managing director for BCG in Denmark

Today the actual process of creating standards in the industry are at a standstill due to the US shutdown, but according to Sanders, the ownership structure shows how parties can work together on joint solutions that benefit all stakeholders.

“The decisive thing is to ensure the neutrality while also having sufficient capital to complete it, and this could be done either through an independent third party or an association consisting of many different stakeholders, as in this case,” he says:

“Right now they’re trying to find the right setup for blockchain, and I think they’ll be able to do so successfully. But I won’t venture a guess at when it happens, and how long the discussions will last.”

English Edit: Daniel Logan Berg-Munch

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