This Week in Logistics News (August 13-17, 2018)

By Adrian Gonzalez

I’m back from vacation.

Well, back physically. Getting back mentally has been a very slow process.

My family and I spent more than a week in Costa Rica, where everyone greets you with “Pura Vida,” which means “Pure Life” in Spanish. I took the saying seriously, leaving my laptop at home and completely unplugging from email and work. I did get a chance to visit several Costa Rican “offices” while I was there, like this one in Manuel Antonio:

It’s always nice to get back home, however, and after sleeping in I went to my backyard and tried to plant a money tree. But after toiling in the heat and dirt for two hours, the tree failed to take root and died immediately.

So, here I am, back at work, still going through the 6,437 emails I received while I was away.

Back at work, getting caught up on all of the supply chain and logistics news from the past two weeks. Here are the ones that caught my attention:

Blockchain in Global Trade: Maersk, IBM, and CBP

Blockchain might not be able to solve, cure, or save everything as the hype suggests, but there are certainly applications where the business case makes more sense, such as global trade because of the many different parties, documents, regulations, and financial transactions involved.

Back in January, IBM and Maersk announced plans to form a joint venture focused on “applying blockchain to improve global trade and digitize supply chains.” In an announcement this week, the two companies said that “based on feedback from various members of the global supply chain ecosystem who would like to adopt the technology, [we] have modified the go to market model and will now deliver [our] solution through an extension of [our] pre-existing collaboration agreement instead of a joint venture.”

This change in go-to-market approach could be a way to gain the support of other industry players, including Hapag-Lloyd and CMA CGM, who haven’t jumped on the Maersk-IBM bandwagon yet. As reported by ShippingWatch back in May:

According to [Hapag-Lloyd CEO Rolf Habben Jansen] and Peter Wolf, general manager of CMA CGM in Germany, the basis prerequisite for a joint digital platform platform in the sector, one which the biggest liner companies will be part of, is to ensure a common standard. “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,” said Jansen at the [Global Liner Shipping Conference].

Speaking of standards, this week’s announcement also states that “standards discussions are actively underway with openshipping.org and work to align the TradeLens APIs with UN/CEFACT standards is in progress. The TradeLens APIs are open and available for developer access and feedback from participants in the platform.”

Nonetheless, IBM and Maersk have made significant progress since January. Here are some excerpts from the press release:

94 organizations are actively involved or have agreed to participate on the TradeLens platform, including more than 20 port and terminal operators across the globe; customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru; and freight forwarders, transportation and logistics companies including Agility, CEVA Logistics, and DAMCO.

During the 12-month trial, Maersk and IBM worked with dozens of ecosystem partners to identify opportunities to prevent delays caused by documentation errors, information delays, and other impediments. One example demonstrated how TradeLens can reduce the transit time of a shipment of packaging materials to a production line in the United States by 40 percent, avoiding thousands of dollars in cost. Through better visibility and more efficient means of communicating, some supply chain participants estimate they could reduce the steps taken to answer basic operational questions such as “where is my container” from 10 steps and five people to, with TradeLens, one step and one person.

More than 154 million shipping events have been captured on the platform, including data such as arrival times of vessels and container “gate-in”, and documents such as customs releases, commercial invoices and bills of lading. This data is growing at a rate of close to one million events per day.

I’m curious how the 40 percent reduction in transit time was actually achieved since blockchain doesn’t make cargo ships move through water any faster. This example implies that shipments for this company were held at ports or customs for a week or more due to paperwork or faulty data issues. Providing more details about the 40 percent reduction would help the education (and buy-in) process significantly.

In related news, American Shipper reports that “U.S. Customs and Border Protection will start ‘live fire testing’ blockchain functionality to verify NAFTA and CAFTA certificates of origin in September.” According to the article:

CBP hopes that using blockchain for the NAFTA and CAFTA certificates of origin will allow the agency to apply the technology toward getting more accurate information about the subject goods from the country of export and toward verifying that suppliers in other countries are compliant along with their U.S. importers, [CBP Business Transformation and Innovation Division Director Vincent Annunziato] said.

But as the U.S. government presses forward with exploring potential blockchain uses, it remains to be seen whether the technology will gain traction in terms of trade compliance with CBP’s 47 partner government agencies “that aren’t just going to give up their sovereignty or their laws and their rules,” Annunziato said.

Ultimately, just like other network-based solutions, there will be multiple global trade platforms built on blockchain, and the next challenge after developing industry standards will be to enable integration and interoperability between those platforms. The fun never ends.

BluJay Acquires Grosvenor Systems

Speaking of global trade, BluJay Solutions (a Talking Logistics sponsor) acquired Grosvenor International Systems, “a leading provider of customs and compliance solutions to the UK and European markets.” Here are some excerpts from the press release:

“In the UK, 80 percent of import customs declarations are ‘self-filed’ away from the border by importers or customs brokers, allowing for speedy movement of goods through the port/airport,” said Lorenzo Rossetti, Grosvenor’s Customs Development Director. “We generate approximately 35 percent of those self-filed declarations in the UK, so you know our system and processes are rock-solid.”

“The pace of change in global trade is incredible. Brexit is a serious concern for our Global Trade Network community,” added Doug Surrett, BluJay’s Chief Product Strategist. “And adding Grosvenor’s solutions to our portfolio will help ensure compliance and productivity regardless of Brexit’s final outcome.”

Between BluJay Solutions, Descartes Systems Group, and Amber Road (also Talking Logistics sponsors), many of the standalone, best-of-breed customs and trade compliance solution providers have been acquired in recent years. Going back to the discussion above about blockchain and global trade, BluJay, Descartes, and Amber Road are existing, network-based platforms playing an important role in global trade processes. Will their networks become blockchain-based too? How will they integrate and interoperate with other emerging platforms, like the IBM-Maersk TradeLens solution? Questions for another day.

New Transportation Solutions from project44 and Kuebix

On the day I took off on vacation, project44 (a Talking Logistics sponsor) announced “a new international and domestic Parcel tracking and address validation solution.” According to the press release:

This new offering provides API-based integrations into top domestic and international parcel capacity providers — over 115 major market and regional carriers across the globe, including FedEx, UPS, USPS, DHL, Royal Mail, Hermes, Deutsche Post, and more. Any Parcel capacity providers not already on the network can be integrated in just two short weeks, free of charge.

With parcel becoming a growing part of virtually every company’s transportation operations, gaining more real-time visibility to delivery status and other metrics is critically important.

Meanwhile, Kuebix (also a Talking Logistics sponsor) announced Community Load Match this week that provides shippers with “a single source to access a huge network of trucks that can provide attractive rates and a new, valuable source for truckload capacity.” As described in the press release:

Shippers simply enter the specifics of their truckload shipment in Kuebix and post it to Community Load Match. Within minutes, they will begin receiving truckload rates and then can book and manage their shipments directly within Kuebix. With Kuebix, shippers retain control by choosing the best provider for every truckload shipment. Once a service provider is selected, shipments can be tendered and tracked within Kuebix, making the process of truckload shipment management highly efficient.

In today’s challenging transportation environment, the more avenues shippers have to find and secure capacity from trusted and quality carriers, the better.

And with that, have a happy weekend!

Song of the Week: “Living in a Box” by Living in a Box