Not too long ago the craze for Blockchain was driven by three main drivers, namely, cryptocurrencies, ICO - token offerings and technology-driven Proof-of-concepts (PoC). The period from early 2017 to late 2019 saw the crypto markets with over 2400 cryptocurrencies and token offerings, go through up and down cycles that made even the ardent HODLers think twice. The ICO market, marred with pump-and-dump schemes, with at times little more than whitepapers, fell short on promises of future development and investors lost money in droves. And most PoCs conducted by businesses ended with good lessons in Blockchain technology capability, but little to no follow through on in-production projects.
However, as the industry matures, we see some exceptions emerging. Contrary to some speculations, cryptocurrencies have not all been wiped into oblivion, in fact, the market seems to be showing signs of returning interest in some cryptocurrencies and tokens. Several good ICO/STOs have proceeded with product development. And some Blockchain initiatives have gone from PoCs to pilots and then into production.
One of the most impressive large-scale Blockchain projects that started with a technology trial and then took shape as an initiative that spans the globe is the joint-venture between Maersk and IBM called TradeLens. Built on the Hyperledger Fabric Blockchain, the solution brings together over one-hundred entities from port authorities, terminal operators, logistics providers to customers to provide permissioned access to a shared source of digitized records, thereby significantly reducing paperwork and administrative overhead of all of the back and forth processing that takes place between the various ecosystem participants.
To put this into perspective, global trade of $16 Trillion happens annually, with 80% of the transportation via shipping. 15% of this is spent on administration of documents permits, etc. The TradeLens Blockchain solution is used to provide participants real-time, trusted access to data, supporting over 500 million events per year and 20,000 docs per day! Custom authorities are also getting involved early on as part of the solution and this helps them make better risk assessments.
However, a challenge TradeLens has had is that the venture is 50:50% owned by IBM and Maersk. Well, you can imagine how the competitors felt about joining this initiative. Hapag-Lloyd's CEO Rolf Habben Jansen has been quoted as saying “Technically the solution (by Maersk and IBM) could be a good platform, but it will require a governance that makes it an industry platform and not just a platform for Maersk and IBM. And this is the weakness we’re currently seeing in many of these initiatives, as each individual project claims to offer an industry platform that they themselves control. This is self-contradictory. "
Despite, early woes, TradeLens has started to gain momentum, attracting 15 global shippers including ZIM, KMTC, Safmarine, Sealand, Seaboard Marine, Namsung, Boluda and APL.
However, in order to do this, TradeLens had to make major changes in its governance model. According to Todd Scott, vice president of supply chain solution sales at IBM Blockchain, a lot of work had gone into getting the governance right, ensuring data privacy, publishing APIs, and aligning with common standards, known to the shipping and supply chain industry.
Organizations pursuing similar ecosystem-wide initiatives through consortium blockchain must pay attention to governance model, roles and responsibilities of each participant and define the business models and IP rights ownership carefully. This is critical to the success of consortium blockchain initiatives where co-opetition is needed amoung competitors as well as other value chain participants.
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