Last year brought about many notable events in logistics tech, but perhaps the biggest watershed moment of the year was the dissolution of TradeLens. The announcement, which came at the end of November, triggered a lot of commentary on whether blockchain is an effective technology and the viability of TradeLens’ strategy. From our perspective, the outcome offers lessons and insights on how visibility ecosystems and digitalization is evolving in global container logistics.
Heading into 2023, it’s worthwhile to take a look at TradeLens, because its achievements can be preserved and applied to more viable applications. Read on for our thoughts on what to take away from the project.
What We Can learn From TradeLens
Let’s rewind to the beginning when TradeLens was rolled out to the world. Remember the flashy marketing campaign including commercials on TV promising IBM would streamline and secure the supply chain? (This was far before most people seeing these ads even paid attention to supply chain issues.) There was a lot of hype around the promise of the blockchain as the savior of transportation and logistics. And a lot of money was invested into the space. As technologists, we were frequently asked, “What is it? Why do I need it?” Unfortunately, the answers were never sufficiently clear to key participants in the industry.
In principle, the TradeLens vision using blockchain has merit: create a secure, immutable ledger to manage supply chain documentation and move toward paperless trade. At Splice, we believe there is a space for blockchain solutions, but the industry is also a long way from really taking advantage of them.
Blockchain is a hammer looking for a nail, and when TradeLens focused on a vast ecosystem of supply chain actors and data, it found perhaps too many things to hit. Here’s what we learned.
Data standards may be the platform's legacy.
Data standards are critical to rolling out supply chain ecosystems designed to connect the many varied data formats, protocols and organizations involved in global logistics. Without them, collaboration at scale, as envisioned with TradeLens, will not be possible.
Building supply chain ecosystems in politically and technologically daunting.
Container logistics processes are fragmented, like the industry itself, and moving data to where its needed requires translation and integration tools to realize the benefits of data sharing.
Better collaboration begins at the process level.
Integration-driven workflow automation is the foundation to realizing the vision of TradeLens and supply chain optimization overall.
A Familiar Problem in Logistics Tech
The required scale and scope of digital infrastructure for TradeLens was daunting, and blockchain does not address a key, dogged problem in logistics: the gap between origination and end state of the data.
When TradeLens came hard out of the gate, some (naïve) industry prognosticators went so far as to predict that it would render third-party software obsolete. TradeLens’ vision as an “open and neutral platform” was hard to achieve given the required data inputs and compliance from varied market participants.
In the shutdown announcement posted in the TradeLens website, Maersk and IBM noted the lack of information sharing “cooperation and support” as a key failing of the project. No doubt there is truth in the statement when organizations view data as currency rather than a lubricant.
Furthermore, the significant role of numerous and often small logistics companies in international cargo transportation also contributed to its demise. In a fragmented industry, small companies have neither the means nor the incentive to support numerous (or redundant) data requirements. The top-down push to require data became a burden rather than a source of potential efficiency, unwinding hopes of compliance.
The dual issues of technological capability and compliance deserve examination. The inability to meet the data requirements were driven in part by the incompatibility of legacy and new systems. New systems thrive on massive amounts of data, which may exist, but it is effectively absent because it is inaccessible. Supply chain digitization has expanded these gaps, rather than bridge them, so while TradeLens pointed to the lack of collaboration in its winding-down press release, data compatibility must have had an impact on TradeLens’ effectiveness.
On the flip side, what TradeLens did right was develop an industry standard for participants to adopt. This was the logical first step to get all the participants talking the same language — and something that is sorely needed in this industry. It happened a generation ago when the transportation EDI standard was adopted, and again it’s desperately needed for our API-centric world. Hopefully the standards established by TradeLens will live on, and other organizations like the Digital Container Shipping Association (DCSA) will continue this valuable work.
Bridging Data Gaps with Splice
Data is being generated in a million forms and flavors across the players in the supply chain. There is no solution that can aggregate all that data and make sense of it; in fact, that is the current challenge of transportation clerks worldwide. Data in the supply chain will only continue to proliferate, so the problem of dealing with this mountain of data is nearing Sisyphean proportions. Without the backing of major industry players like Maersk, the fear is the momentum gained will quickly be lost, and that is where Splice has tremendous potential.
Our platform is uniquely positioned to normalize data from its various sources to make life easier on operations teams. It can help secure documents, enable deep data analyses and prepare predictive models — and ultimately be in a position to construct blockchain-backed systems. Our mission at Splice is to be the bridge to bring data to where it is most actionable.
Although TradeLens was a failed effort, we can learn from it and build on it.
The industry continues to suffer from a lack of standardization. Getting participating companies to commit to a standard was a huge positive step.
Companies in the logistics industry struggle to evolve their systems and cannot readily adapt to new data requirements. Systems like Splice are a fantastic complement to data-centric initiatives.
Blockchain is not a lost cause, but there are many steps required before it can really shine.
Workflow-driven automation, connecting otherwise disconnected systems at a process (vs. ecosystem) level, is pragmatic and scalable in a fragmented technological and business environment.