How TradeLens Delivers Business Value With Blockchain Technology

Full text

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DELIVERING BUSINESS VALUE WITH BLOCKCHAIN
TECHNOLOGY: THE LONG JOURNEY OF TRADELENS
Thomas Jensen; Stefan Henningsson; Jonas Hedman
Department of Digitalization, Copenhagen Business School
Abstract
Blockchain technology continues to attract widespread attention; however, by 2018, very few
enterprise initiatives had moved from proof-of-concept to real-world operating solution, enabling
them to deliver business value. This case study describes the first years of the journey of
TradeLens, a blockchain-enabled platform for tracking and planning shipping containers and related
documentation in the global supply chain. We describe the journey from initial prototypes and
pilots to its live deployment. So far, the majority of the largest container transport carriers have
signed on, representing more than half of the world’s container traffic. While TradeLens still has a
long way to go in terms of scaling, its vision to substantially improve global supply chains has kept
participants engaged and committed to adapting the solution to engage in the growing ecosystem.
Introduction
Blockchain technology continues with proof-of-concept initiatives to attract widespread
attention; however, as of 2018, very few of those initiatives had moved to real-world operating
solution,
1
enabling them to deliver their promised business value. The following describes
TradeLens’ journey from initial prototypes, pilots, live deployment and commercialization
attracting key actors in the containerized shipping ecosystem. Five of the six largest carriers that
transport containers across oceans to keep the global supply chains operational have signed up,
accounting for more than 50% of the global supply chains utilizing containerized shipping.
1
Laity, M. C. (2018). Addressing key challenges to making enterprise blockchain applications a reality. MIS Quarterly
Executive, 17(3), 201–222.
This article is published as:
Jensen, T., Hedman, J., & Henningsson, S. (2019). How TradeLens Delivers Business Value With Blockchain Technology. MIS Quarterly Executive, 18(4), 221-243.

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TradeLens is increasing its coverage by extending services towards the ends of the supply chains,
i.e., by engaging the shippers and authorities. While it still has a long way to go in terms of scaling,
TradeLens’ application has been deployed and is ready to start delivering business value.
TradeLens’ journey started as separate internal innovation initiatives at Maersk
2
and IBM.
3
They
shared the vision to digitalize inter-organizational collaboration by exchange of shipping
information. In 2013, they joined forces to pursue these initiatives together, working to
commercialize one solution enhanced with blockchain technology in order to generate substantial
business value within the shipping industry. Yet, the road to business value has not been without
complications. The path to commercialization has been long and winding, with important lessons to
be learned regarding employing blockchain technology for business value in an inter-organizational
context. TradeLens has gained considerable attention from significant actors in the ecosystem; at
the end of this case study, there are pointers regarding the latest updates.
TradeLens is a broad technological solution, in which blockchain technology plays a key role,
for enabling the trusted exchange of information between the actors that operate the containerized
shipping industry. The solution is designed for the provision of information to authorized actors
only when required throughout the supply chain, enabling participants to stay compliant with
regulatory frameworks, while cutting administrative costs, decreasing lead times, and reducing risk
through improved monitoring possibilities.
2
Maersk was founded in 1904 and is the market leader within containerized shipping, with a market share of
approximately 17.9% and revenue of over $30b (2017).
3
IBM dates back to the 1880s but was consolidated in 1924 as the International Business Machines Corporation. With
revenue of approximately $100b, Big Blue (a common nickname for IBM) has been a market leader in IT for businesses
for many decades.

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Global supply chain utilizing containerized shipping
The core problem that TradeLens – the technology – addresses is the delivery of business value
while overcoming the inefficiencies and security risks in the global supply chains utilizing
containerized shipping. These global supply chains play an important role in economic growth,
social welfare, and human development worldwide. Today, the overall global supply chain manages
approximately 90%
4
of the goods around us, with a value of 17.73 trillion USD in 2017.
5
With the
exception of bulk products and large items, most of these goods are shipped in one of the
approximately 20 million containers transported by 5,152 deep-sea container vessels
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that circulate
around the globe. Besides ships, the global supply chains utilizing containerized shipping involve
multiple actors, including producers, traders, importers, exporters, as well as transportation and
governmental agencies.
As illustrated in Figure 1, a global supply chain utilizing ocean-going vessels links the following
steps: (1) the country of export produces/processes goods, which are at origin packed on pallets and
put into containers; the containers are then transported by freight forwarders on trucks or trains to a
sea port (referred to as the port of origin), where the authorities release them for export prior to
them being loaded by crane onto container vessels by the port terminal operator; (2) the goods are
transported by carrier’s vessels across the sea to the country of import; and (3) prior arrival at the
port of destination, containers are cleared by security; upon arrival they are unloaded from the
container vessel by the port terminal operator, given import clearance by the authorities before they
are loaded onto trucks, trains or barges for transport by freight forwarders to their final destinations.
4
Klose, A. (2016). The container principle: How a box changes the way we think. Cambridge: MIT Press.
5
World Trade Organization. https://www.wto.org/english/res_e/statis_e/wts2018_e/wts2018_e.pdf
6
By 2018, the largest container vessels had a capacity of up to 21,000 twenty-foot equivalent unit containers.
https://www.statista.com/statistics/264024/number-of-merchant-ships-worldwide-by-type/ 20190705

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Figure 1: Global containerized supply chain with key actors and flow of export, shipping and
import.
Challenges confronting today’s global supply chains
Global supply chains suffer from three well-known problems that make them inefficient and
become barriers for trade. First, the administrative costs, incurred largely though documentation,
are estimated to be in the range of 257 billion USD,
7
or roughly 22% of the retail cost of goods.
8
Second, the arrival time of goods is unpredictable. Typically, the actual arrival times of goods are
not known until the moment the goods are actually released (by the authorities, carrier, terminal
operator, freight forwarder, and possibly by banks, and so forth), which, on average, is 3-4 days
after the arrival of the container at the port of destination. Furthermore, an average of three out of
ten container vessels are delayed by more than 1 day compared to their estimated times of arrival (3
weeks earlier), creating a high degree of uncertainty. Third, security concerns have led to
comprehensive monitoring schemes that stall the supply chain flow.
7
United Nations ESCAP, 2014
8
Anderson, J. E., & Van Wincoop, E. (2004). Trade costs. Journal of Economic Literature, 42(3), 691–751.

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Explaining the challenges for today’s global supply chains
The three challenges have been part of the global supply chains for decades; however, there are a
set of factors causing this. As illustrated in Figure 2, these problems are to a large extend caused by
the following four factors:
1. Individual organizations operate their own supply chain systems. The whole supply chain is,
as illustrated in Figure 1, formed by a number of individual organizations, in total e.g. for goods
shipped from Kenya to Europe more than 30 organizations. Parallel to the flow of physical goods,
each organization in the global supply has its own proprietary IT system to track the flow of
documents. While individual organizations have improved their internal systems, the above
problems are associated primarily with lack of the efficient flow of information across supply chain
partners. Traditionally, the information overlay of the supply chain is a parallel flow of paper
documents. These documents verify the responsible parties and that the shipped goods are in
compliance with international and national laws. Digitized information regarding almost every
aspect of the shipment journey does exist, but that information is typically stored in IT systems
locally with each actor. Actors in the supply chain have no incentives or mechanisms for sharing the
digitized information, particularly because much of the information is commercially critical and
sharing it inappropriately could impact market prices or result in illegal activities.
2. Attempts to standardize documents have not succeeded. To further complicate collaboration,
there is no common information infrastructure or generally accepted standard for trade documents.
This situation has led to a lack of integration among actors and disagreements involving the
interpretation of documents related to the goods that travel around the world. Therefore, the current
paper-document-based set-up has high costs, introduces uncertainties in lead times, and creates
severe security risks.

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This problem has been known since the early 2000s. The European Union has tried to address
these issues through several research projects, for instance, through ITAIDE
9
and Casandra.
10
Later
attempts to create a common information infrastructure failed to attract global interest. On an
international level, the International Organization for Standardization (ISO) has developed
document standards for containerized shipping, such as 1988’s ISO 9735, which is now chartered
by the United Nations. Other standards are the X12 Electronic Data Interchange (EDI) and Context
Inspired Component Architecture (CICA) standards from the Accredited Standards Committee X12
(also known as ASC X12), which was chartered by the American National Standards Institute
(ANSI) in 1979. While these standards are readily available for use, only a few actors have adopted
parts of them.
In addition, private actors, mainly the large shipping agencies, have attempted to solve the
integration issue by developing large, centralized information infrastructures and by agreeing upon
standards — however, they have had marginal success. One example is INTTRA,
11
an EDI-based
information exchange platform supporting bookings and shipping instructions for ocean trade.
9
European Union funded research project ITAIDE project http://cordis.europa.eu/project/rcn/79327_en.html finalized
in 2010
10
European Union funded research project, finalized in 2013 http://www.cassandra-project.eu 20161128
11
INTTRA was originally founded in 2001 by the world’s largest carriers to create a standard electronic booking
system for the ocean freight industry. https://www.inttra.com

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Figure 2: Illustration of the cause and effect between the major four factors and the well-known
challenges, which affects the administrative cost of international shipping, whereby they become
barriers for trade.
3. There are a plethora of documents that need to be updated by multiple parties. Shipping
is not only about moving boxes (a nickname for containers) but also about moving nearly 100
documents. The key documents include the bills of lading, packing lists, certificates of origin,
commercial invoices, and export licenses. Individual organizations have already digitalized many of
the documents and use the digitized versions internally to gain operational efficiency, but digitized
data is rarely used in interactions with other organizations. Hence, global supply chains continue to
rely on the extensive use of a plethora of physical documents, e-mails, faxes, and phones calls.
Figure 3 provides an example of a physical document with the required stamps and signatures.
Figure 3: An example of a phytosanitary plant certificate verifying the goods of fresh cut roses
with quantum and quality to be air couriered in parallel with the container’s journey at sea (own
picture).

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4. Many regulations still require paper documents. To complicate things even more, EU e.g.
in Regulation 1960/11, Article 6 (see below text in italics) requires that the original documents, i.e.,
physical paper documents with stamps and signatures (see figure 3 for an example) be presented
within 15 minutes of being requested by the authorities. These documents are sent by air courier in
parallel with the containers travelling by sea. A missing or incorrect paper document can hold back
and delay a container for days or weeks. A practical example from the pilot involving Schneider
Electric concerns the packing list for the electronic components in one shipment (located in
multiple containers), which ran to several hundred printed pages. The stack of printed papers was
sent to the freight forwarder, who digitized them to make their job easier (a copy of the packing list
is attached to other documents, e.g., certificates and declarations). The information contained in
such documents is critical for the individual actors (e.g., for the exporter and importer) in the supply
chain because it includes business information about the goods, perhaps providing a competitive
advantage for an individual actor.
EU Regulation 1960/11, Article 6: Transport documents shall be made out in duplicate and shall
be numbered. One [interpreted as one original paper document – author’s note] copy shall
accompany the goods; the other copy shall be retained by the carrier for two years, reckoned from
the date of carriage, and shall be filed in numerical order. The latter copy shall show the full and
final transport charges, whatever the form in which they may be made, any other charges and any
rebates or other factors affecting the transport rates and conditions. EU Regulation 1960/11,
Article 6, https://eur-lex.europa.eu/eli/reg/1960/11/oj
The problems and that IT solutions could improve the situation significantly are well
recognized, as Steve Felder, Managing Director East Africa, Maersk Line has noted:

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What the industry and the supply chain players could accomplish here is not necessarily re-
engineering the format, the contents or the number of supply chain documents. It’s about
using those documents and sharing them in a cloud-based solution to enable all relevant
stakeholders to access those documents, to use those documents, and thereby alleviate
bottlenecks, improve supply chain efficiency, and ultimately reduce costs and enable trade.
In sum, the overall global supply chain spans across its three key activity communities (export,
shipping, and import) with actors and their actions, forming the physical supply chain infrastructure
used for containers and the flow of related documents forming a knotwork. Figure 4 shows the
knotwork (for five selected documents out of more than hundred) on a shipment of one container
holding fresh cut roses traveling from East Africa to the European Union.

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Figure 4: Today, the information flows become a knotwork for container shipping.
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Starting at
the top left of the figure, the key activity communities are presented, followed by the actors,
illustration of their work/actions, equipment, tools and information systems, and the resulting
knotwork of information flows for five selected documents.
TradeLens aimed to address all these challenges (including the knotwork) by providing an open
and neutral industry platform, where different (and even competing) actors can share shipping
information, including key trade documents. The blockchain technology was added ensure security
and trust among the actors.
TradeLens
TradeLens cannot be characterized as a classic IT development project in the sense of having
stated requirements and a clear end objective. It emerged through a number of initiatives and
iterations involving different organizational set-ups and names. The name TradeLens was not given
until late into its journey. In figure 5, we present on a timeline the key initiatives, events and actors
involved in the development of TradeLens.
12
Jensen, T., & Vatrapu, R. (2015). Ships & roses: A revelatory case study of affordances in international trade. Paper
presented at the 23rd European Conference on Information Systems (ECIS).

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Figure 5: Timeline for the development of TradeLens.
The roots of TradeLens can be traced to Maersk’s aim to reduce costs in the wake of the
financial crisis of 2007–2008. The crisis had lingering effects on the shipping industry because a
general downturn in demand led to overcapacity in the industry, with resulting price wars and weak
profitability. By 2013, the divisions of the Maersk Group dealing with containerized shipping —
Maersk Line (ocean transportation), APM-Terminals and Damco (land transportation) — were still
focusing predominantly on operational efficiency and the handling cost per container. As part of
achieving operational efficiency, Maersk hired Robin Johnson as its new Chief Information Officer
(CIO) with the mandate to reduce the cost of IT. He promised to lower the operational cost of IT by
50% to free up resources for digital innovation:
The challenge for IT organizations is fixed cost — we’ve even invented a language around it
— fixed cost, running cost, keep the lights on spending. These are all codenames for “Leave
me alone, I can’t do anything about it” and that’s one of IT’s big problems.... So, the point

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I’m making to you, what new value can you create? What new programs, initiatives are you
going to run that generate value they can measure on the profit and loss statement?
13
The refocus on innovation would be gradual but, even from the start, easily achievable cost
reductions freed up resources to explore innovation initiatives. In this context, a large EU-funded,
ongoing research project named Cassandra and a new subsequence project called CORE
14
were
established, and Maersk Line’s new CIO decided to engage in the CORE research project as an
industrial partner. Further, he decided to fund an industrial research Ph.D. position at Copenhagen
Business School.
Innovative initiatives a new pathway in shipping
Later in 2013, Maersk Line’s Chief Financial Officer (CFO) Jacob Stausholm and CIO Robin
Johnson outlined possible disruptions by startup innovations for the IT department and asked for
ideas and proactive initiatives. Several ideas emerged from this event. One of them, the primary
focus of this paper, was the Shipping Information Pipeline (SIP) initiative, which eventually led to
the collaboration between Maersk and IBM and later to TradeLens.
Initially, blockchain technology was not within the scope of Maersk’s proposed solution. At this
point in time, blockchain technology was relatively new. Instead, the focus was on understanding
how to improve containerized shipping and to facilitate and enable trade. The latter issue was
addressed by Maersk’s corporate management as part of their sustainability agenda and their
engagement with the World Economic Forum (WEF). In 2013, the Chief Executive Officer (CEO)
13
Cases on IT leadership: CIO challenges for innovation and keeping the lights on. Edited by Niels Bjørn-Andersen.
Published by Samfundslitteratur.
14
Consistently Optimised REsilient, http://www.coreproject.eu

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of Maersk, Nils Smedegaard Andersen, chaired the WEF workgroup that produced a report
15
on
costs and issues concerning enabling trade through reducing barriers for containerized shipping and
possible technical solutions. Part of the foundational material for this report included a study of
fresh avocado shipments from Africa to Europe.
16
In 2014, Maersk engaged in a similar study
involving fresh-cut roses, which resulted in a short film entitled “Paper Trail of a Container.”
17
This
film was shown at several World Trade Organization (WTO) meetings and conferences in 2015.
The start of the Shipping Information Pipeline initiative
During the period 2014–2016, a small innovation team from Maersk Line IT developed a range
of prototypes for information exchange among actors in global supply chains, referred to as the
Shipping Information Pipeline (SIP). SIP was developed to address the lack of infrastructure for
information exchange by providing the connectivity or infrastructure rather than detailing what
information should be shared with whom or when. The access to governmental agencies and private
actors as shippers, freight forwarders and other service providers in the supply chain through the
CORE research project was instrumental during this phase and in future developments. The SIP
prototypes were tested on actual shipments of containers by utilizing a range of social media and
cloud solutions. The aim was to learn about and improve the designed solutions. The functionalities
included making the information concerning container departures from warehouses and completed
packing lists (including links to the sources of the original documents) available for any interested
parties. In spring 2016, the innovation team presented one of the prototypes to the management
group of Maersk Line, including the CEO Søren Skou and the CFO Jacob Stausholm, and later to
15
World Economic Forum report “Enabling Trade - From Value to Actions” 2014
https://www.weforum.org/reports/enabling-trade-valuation-action 20190716
16
Jensen, T., Vatrapu, R., & Bjoern-Andersen, N. (2018). Avocados Crossing Borders: The Problem of Runaway
Objects and the Solution of a Shipping Information Pipeline for Improving International Trade. Information Systems
Journal, 28(2), 408-438.
17
https://www.youtube.com/watch?v=p8yH4e-Aafk&t=107s

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the CEO of Maersk Group, Nils Smedegaard Andersen, and they found the innovations promising
enough to decide to fund the next phase of development. But the CFO demanded to align with
another innovative initiative.
The Paperless Trade Initiative
In parallel to the work on the SIP, IBM approached Maersk via CFO Jacob Stausholm, who was
on IBM’s Customer Board, to jointly evaluate the use of blockchain technology in shipping. The
two companies agreed to bet on blockchain technology and develop a prototype for trade finances
based on it.
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Maersk management also decided to collaborate with IBM’s research division to
come up with a way to utilize blockchain technology for digitizing parts of the trade process. This
initiative became known as the Paperless Trade (PT) initiative. In June 2016, the first mockup based
on blockchain technology and its associated business scenarios was presented to Maersk’s CFO.
The presentation of the mockup did not impress the CFO, and he was not convinced that the
blockchain added any value beyond existing solutions, such as Maersk’s web solution for customer
service. It took the developers a few weeks and a few iterations, which included the additions of one
particularly useful scenario with smart contracts (lines of code that are stored on a blockchain that
automatically execute when predetermined terms and conditions are met) and one scenario
demonstrating possible automation, to convince the CFO of the potential business value of a
blockchain technology-based solution.
Global Trade Digitization, joint innovation initiative
At this stage, the SIP and PT initiatives were combined under the umbrella of Global Trade
Digitization (GDT). The GDT initiative consisted of two sets of prototypes: 1) the Shipping
18
Lal, R. & Johnson, S. (2018) , HBR, 9-518-089.

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Information Pipeline (SIP), designed to capture the key events taking place while shipping a
container; and 2) the Paperless Trade (PT) Blockchain Network, designed to increase trust and
make encrypted digital copies of important documents in global trade available, see Figure 6. More
specifically, the SIP and PT teams started to investigate how the two initiatives could be scaled
together. One of the key decisions in this regard was the selection of which documents to include in
the blockchain solution. In June 2016, Maersk and IBM organized their first joint workshop
together in New York and selected which shipping documents (circled in Figure 6) to include in the
development of the next prototype. The decision criteria applied to more than 100 documents was
that they be required by importing authorities in the original versions, with the stamps and
signatures of the exporting authorities included (see Figure 3 for an example). Their uniqueness and
authenticity were, therefore, a key concern in their digitization. Table 1 shows the five documents
chosen and their descriptions. Maersk also engaged in a hackathon for students at the Blockchain
Summer School
19
, for example, where students investigated in blockchain technology design
principles for smart contracts for documents such as the Bill of Lading.
20
Blockchain technology
seemed, at this point, to be a possible technical solution to the problem of trusted information
exchange.
19
Blockchain Summer School is an initiative of the European Blockchain Center jointly by faculty of Copenhagen
University, IT University of Copenhagen and Copenhagen Business School www.blockchainschool.eu
20
Nærland et al. (2017). Blockchain to rule the waves - Nascent design principles for reducing risk and uncertainty in
decentralized environments. ICIS.

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Figure 6: Global Trade Digitization (GDT) components (TradeLens
Ô
). The top of the figure shows
the key actors in global trade..
Key Documents
Description
Bill of Lading
A legal document between a shipper and a carrier that details the type, quantity as well as
the origin and destination of the goods being carried
Packing list
A list of the goods being shipped in a container
Certificate of origin
A document by the authorities in the country of origin verifying the shipment’s content
Commercial
invoice
Document required by customs to determine the true value of the imported goods for the
assessment of duties and taxes
Export certificate
A government document granting the licensee the right to export a specific quantity of,
e.g., electronic components to a specified country
Table 1: The five documents selected for the blockchain technology-based prototype and pilots
The technical development proved difficult. In addition to exploring a new technology, one of
the difficulties centered on a distributed development structure that involved some 35 developers.
The Maersk team was based in Denmark, the consulting IBM team was based in India and governed
from the UK, the IBM Research team was based on the US east coast with sub-teams in India and
Global Trade Digitization
13
With GTD, the entire supply chain ecosystem shares a single trusted view of
shipping events and documentation filings
Global&Trade&Digitization
Paperle ss&Trade& Blockch ain&N etwork
Export
Inland
Transportation Port / Terminal Authorities
3PL Service
Provider
Packing
List
Export
Declaration
Bill of
Lading
Inspection
Certificate
Commercial
Invoice
Exporter /
Consignor
Import
3PL Service
Providers
Importer /
Consignee
Inland
Transportation
Authorities
Port / Terminal
Shipping&Information&Pipeline
Certificate of
Origin
Dangerous Goods
Declaration
ISF
Not$exhaustive$list$of$Events$ tracked$by$GTD
Note:$representative$only;$not$ all$documents$require$Paperless$ Trade$nor$is$this$an$exhausti ve$set$of$
documents$that$could$be$processed$by$Paperless$Trade
Customs
Declaration
Customs
Clearance
Phytosanitary
Certificate
Empty container
picked up
Start container
tracking
ETA Empty container
at inland location
VGM filled
Full container picked
up from stuffing site
Estimated gate in
gate in full for export
ETD container from
terminal
Full container loaded
Empty container
picked-up
ATA container at
terminal
Container discharge
estimated
Estimated gate out
Gate out full for import
ETA full container at
inland location
ATA full container at
inland location
Sealed removed
Container de-stuffed
Empty container
ready for pick-up
Empty container
arrived at empty
depot
Container tracking
ended
ETA Empty container
at inland location
Container stuffed
Container sealed
ATD container from
terminal
ETA container at
terminal
Temperature read
Export declaration
cleared
Full container
discharged
Import declaration
cleared
Container selected for
inspection
MRN number issued
Container
Arrival
Notice
EUR 1
Available

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the user experience team was based on the US west coast and in Kenya. Consequently, the teams
had different focuses with respect to the various components of the solution.
The piloting
In December 2016, after six months of development, the prototype was presented by the GTD
team to the top management teams of both IBM and Maersk separately. Maersk Chief
Commercialization Officer (CCO) Vincent Clerc came up with a challenge for the development
team: If, before the end of January 2017, the GTD team could demonstrate a blockchain-based
solution with real shipments between Europe and the US including the participation of the
authorities on both sides of the Atlantic, then the CCO would be convinced to the degree that he
would present the initiative at the most important containerized shipping conference at the end of
February.
The challenge was taken up, and the first pilot involved a trade lane
21
for electronic components,
with Schneider Electronics as the shipper (both exporter and importer), Maersk as the carrier,
Damco as the freight forwarder, and the French Customs, Dutch Customs, and U.S. Customs and
Border Protection units as the authorities. The goods were shipped from Europe to the US, with
departure in January 2017 and arrival in February. The pilot was successful; hence, as promised,
Vincent Clerc of Maersk announced on the 27th February that Maersk and IBM had successfully
piloted a blockchain technology-based solution at the Trans-Pacific Maritime (TPM) Conference
22
in Long Beach, CA.
21
A trade lane is a route between an export country and an import country for a category of goods which are governed
by same set of regulations, e.g., flowers or electronics.
22
TPM continues to be the must-attend conference for the trans-Pacific and global container shipping and logistics
community and highlights hot industry topics.

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In spring 2017, Maersk’s newly appointed chairman, Jim Hagemann Snabe, asked for a meeting
to learn about both the research and solution. This meeting resulted in increased support from the
top management at both Maersk and IBM. The ambition was to develop and enhance the solution
during 2017 to the point that a market version would be generally available for other organizations.
Thus, the work continued, as Michael White head of GTD from ultimo 2017 and from August 2018
CEO of TradeLens announced:
The platform is currently being tested by a number of selected partners who all have interest in
developing smarter processes for trade. As we incorporate learnings and continue to expand the
network, a fully open platform whereby all players in the global supply chain can participate and
extract value is expected to become available.
TradeLens: the commercial solution and its architecture
On the 11th of December 2018, the GTD initiative announced that its product would become
commercially available under the brand TradeLens. TradeLens also became the name of the newly
formed company that would own TradeLens. IBM would host, operate and support the platform.
TradeLens claims to be an open, neutral and distributed trade platform for containerized shipping
underpinned by blockchain technology that connects the entire supply chain ecosystem. The
platform offers permissioned document and information sharing via APIs controlled by an access
control structure that ensures secure, encrypted, authenticated and verifiable transactions.
Furthermore, TradeLens supports smart contracts, which is shared and agreed business logic code
governing which transactions may be written to the shared ledger. The procedure, for example,
involves import clearance being pre-programmed into a smart contract distributed to the blockchain
network, which prevents any member from changing the business logic and makes automatic self-

19
execution possible based on events (e.g., certain documents are approved by the appropriate
authorities).
The core components of TradeLens are, as Figure 6 illustrates, the SIP platform, which keeps
track of events and related event information; and the PT Blockchain Network, which serves as the
document repository and the blockchain network, which controls access. Figure 7 illustrates the
architecture of TradeLens. In particular, TradeLens includes platform components, i.e., platform
services and platform APIs; a set of distributed blockchain nodes utilizing the platform components;
a document store component; the Hyperledger Fabric for ledger and smart contracts and the
Hyperledger Fabric Consensus component.
Figure 7: TradeLens architecture (TradeLens
Ô
).
The blockchain component is shown in more detail in Figure 8. The individual node of the
distributed blockchain nodes can be hosted and managed by either TradeLens or a participant (e.g.,

20
ocean carriers or an authority). This approach facilitates separation across participants (e.g.,
competitors). Each node includes the blockchain platform components as well as dedicated
blockchain-managed document storage for that particular node. A channel, i.e., a private
communication between two or more specific members, is established for each node’s hosting
organization. Sensitive information is distributed only to those nodes participating in a channel.
23
In
addition, secure access control permissions guarantee that organizations only access information for
which they are granted access. Documents are stored on a single node only and are accessed at
runtime by other nodes on a channel as permissions allow. Further, TradeLens builds on
blockchain-based standards to ensure interoperability with other blockchain-based platforms on the
network. The ledger is based on Hyperledger Fabric, an open-source blockchain technology that
follows the evolving blockchain-based standards.
23
A Hyperledger Fabric channel is a private “subnet” of communications between two or more specific network
members and used for conducting private and confidential transactions.
https://hyperledger-fabric.readthedocs.io/en/release-1.4/channels.html

21
Figure 8: The blockchain component with distributed blockchain nodes (TradeLens
Ô
).
TradeLens is open to other solutions via open, non-proprietary and publicly available REST
APIs. The APIs are documented via swagger tool.
24
TradeLens promises that the platform also will
provide integration to standard IT systems, such as ERP systems, supply chain systems and
warehouse management systems. TradeLens ensures interoperability by promoting and adopting
industry standards, such as the UN/CEFACT standard, including access control and the data model.
Third parties are encouraged to develop new applications utilizing the APIs. The platform makes
such development possible by providing a single, centralized infrastructure based on industry
standard RESTful APIs
25
that follow a “hub and spoke” model. This approach reduces the need to
maintain complex and vulnerable peer-to-peer integrations. The envisioned future in Figure 9
illustrates the open platform supporting the various actors in the containerized shipping supply
chain.
24
https://platform-sandbox.tradelens.com/documentation/swagger/
25
Representative State Transfer (REST) is a software architectural style used for web services and RESTful APIs
conform to this.

22
Figure 9: The envisioned future with the open platform supporting various actors and their IT
systems in the containerized shipping supply chain. Figure 4 illustrates the current situation.
Organization and governance of TradeLens
The organization and governance structures for TradeLens have gone through several
transformations. It started as separate initiatives sponsored by the CIO and CFO of Maersk Line,
and a range of organizational units within IBM. The GTD (later named TradeLens) started as a
collaboration between members of Maersk’s IT organization, an IBM consulting service arm and
IBM Research, and were co-led by Maersk IT’s Head of New Ventures Morten Holm Christensen,
and IBM’s Vice President, Blockchain Business Development & Ecosystem Brigid McDermott.
Then Maersk appointed Ibrahim Gokcen as its Chief Digital Officer (CDO), and he took over the
GDT project (which was later named TradeLens) in spring 2017. Later, the project team moved to a
newly formed department called “Growth,” which was headed by Sune Stilling, who reported

23
directly to the CEO of Maersk, Søren Skou. The Growth department was set-up in a new location at
Christianshavn in Copenhagen, away from Maersk headquarters near Copenhagen’s harbor.
On January 16, 2018, Maersk and IBM announced their intention to establish a joint venture
with a 51/49 split to provide more efficient and secure methods for conducting global trade using
blockchain technology. Vincent Clerc, Chief Commercial Officer at Maersk was appointed as the
future Chairman of the Board of the new joint venture, and Michael J. White, previously President
of Maersk Line in North America was appointed as CEO of the new company. The joint press
release by Maersk and IBM stated:
This new company (TradeLens) marks a milestone in our strategic efforts to drive the
digitization of global trade…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.
26
In early 2018, the Maersk employees involved in the initiative were moved to a newly
established innovation laboratory building for startups in Copenhagen. In addition, IBM sent their
team members to a new location on the east coast of the US.
On August 9th, 2018, TradeLens, the solution, also became the name of the new company.
Maersk assigned people from the development team to run the business, and IBM assigned
dedicated staff from across its blockchain, cloud, consulting, and sales units. Both organizations
planned to market, sell, and contract the TradeLens solution through their own sales channels.
26
https://www.maersk.com/en/news/2018/06/29/maersk-and-ibm-launch-digital-joint-venture &
https://www.ibm.com/think/fintech/maersk-and-ibm-form-joint-venture-applying-blockchain-to-improve-global-trade-
and-digitize-supply-chains/

24
During the fall of 2018, the plans for a joint venture were shelfed. New companies need
permission from the authorities where they operate, but the approval process was dragging out in
some countries (e.g., China). Therefore, it was decided to change the ownership structure from a
joint venture between IBM and Maersk to a subsidiary of Maersk, since Maersk was already
allowed to operate in most regions of the world. The Maersk part of the team based in Copenhagen
relocated to Maersk headquarters in Copenhagen. As such, by December 11, 2018, TradeLens
announced the commercial availability of their solution.
To ensure that TradeLens became a truly open platform, TradeLens was set-up with an advisory
board made up of leaders from across the industry.
The advisory board will work with TradeLens leadership to address key issues such as the
use of open and fair standards. The board will also provide ongoing feedback to ensure all
members have a voice in and benefit from platform development and growth.
27
Despite TradeLens being commercialized as a subsidiary of Maersk, the ambition is still to
create an open solution based on standards. Past attempts to digitize trade flows have taught Maersk
that as soon as the solution becomes too proprietary, potential adopters will shy away. As the
TradeLens architect Nis Jespersen stated:
It’s exciting to see solution-sharing and the prevailing spirit of collaboration taking hold in
our industry. We’ve become very active in the United Nations Centre for Trade Facilitation
and Electronic Business (UN/CEFACT) in guiding the development of standards for the
industry and world trade. The way I see it, for the first time ever, we have the opportunity to
get shippers, carriers, customs officials and more on the same page—or rather a shared
27
https://www.tradelens.com/about/

25
ledger—using the same terminology, processes and documentation. And even cooler is the
fact that TradeLens is developing hand-in-hand with these standards…Our involvement in
openshipping.org is another way we’re riding the wave of collaboration. Industry players—
in many cases competitors—are coming together to share ideas and brainstorm around
common challenges.
In sum, the organizational set-up of TradeLens has evolved from being owned by each of the
enterprises (Maersk and IBM) to an innovative startup outside of these enterprises, then to a joint
venture and, finally, a subsidiary of Maersk formed from people from both enterprises and new
hires. The shifts in the organizational set-up appear to reflect the sponsoring manager. Initially, the
CIO of Maersk wanted to keep the solution inside the enterprise but offer it to collaborators. Next
the Head of Growth at Maersk took over the project to grow their business. When the CDO took
over the solution, he planned to spin off a startup. For more than a year, Maersk and IBM top
management teams (and lawyers on both sides) negotiated a joint venture organizational set-up
which was finally agreed upon and announced. However, when approvals prolonged, Maersk
became the owner, and IBM became the technology supplier.
Potential Business Value
The World Economic Forum estimates significant value growth opportunities if increased trade
utilizing sea-carried containers is enabled and non-tariff trade barriers are reduced by modern IT.
IT, such as TradeLens, could reduce international trade costs by 5–20%, increase worldwide trade
volume by 10–15% and impact global GDPs by 3–5% specifically for individual developing
countries GDP by up to 15%
28
.
28
http://www3.weforum.org/docs/WEF_SCT_EnablingTrade_Report_2013.pdf

26
To reduce the non-tariff barriers to trade while making regulatory compliance as efficient as
possible has long been the ambition driving initiatives by shippers and their service partners,
including Maersk and IBM. Introducing blockchain technology can become a game changer to
reach those.
The value offered by TradeLens is “to bring global supply chains into a more connected and
digitized state — for everyone,” and TradeLens has the following goals: “to reduce the cost of
global shipping, improve visibility across supply chains, and eliminate inefficiencies stemming
from paper-based processes.”
29
The value that TradeLens can potentially tap into is administrative
costs, which make up 22% of retail cost prices, reducing waiting times, increasing on-time
deliveries and reducing the cost of risk mitigation.
TradeLens’ current revenue model is a mix of free-of-charge offerings and subscriptions (plus
transaction fees). Some partners (e.g., authorities and container terminals) can participate free of
charge, whereas shippers have to pay. The initial fee used for the business case calculations within
Maersk and IBM was $25 per container per journey, which is equivalent to 1% of the average sea
transport cost for one container between two continents. Hence, the potential revenue of TradeLens
can be calculated by multiplying the fee by millions of container journeys. However, within the
shipping industry, charges and fees are always negotiable. Further, business models benefits
significantly when scaling.
Scaling TradeLens: The interdependent network effects challenge
TradeLens works and provides value to the stakeholders, but adoption has been sluggish. This
issue is seemingly not due to a lack of value potential, considering that it is a fully implemented
29
https://blog.tradelens.com/blog/ga

27
solution. Interest in the concept has been significant, the problem is recognized, and the solution
praised by industry actors.
Studying the TradeLens initiative, we found two interrelated explanations for the slow adoption.
The first explanation is that in this context, the blockchain is merely a component technology.
Digitalization provides value within organizations but, without an enabling technical platform for
document sharing, it has limited value compared to its full potential. What makes this a difficult
knot to untangle is that this kind of technical platform is built and grows like an information
infrastructure: with different actors adding a piece to what already exists. This set-up resembles
how the Internet has evolved, i.e., in a piece-by-piece manner each time a new component is
connected to what already exists. In fact, the platform component of TradeLens is also referred to as
‘the Internet of shipping.’
The dilemma in the commercialization of TradeLens is that no one wants to put down the first
mile of SIP - the infrastructure that enables the blockchain solution - before there is a functional
infrastructure to connect it to, see figure 6. Further, there is a lack of standards for trade data, and
commercial off-the- shelf systems do not provide ready-made interfaces to export or import data to
the SIP. Therefore, connecting to the SIP requires a customized modification to existing IT systems,
i.e., implementing the platform’s REST APIs as defined24 and described above to make the
connection with the limited existing base of the components.
Standards for how the events on the ledger should exchange information with the SIP (and other
trade information platforms) would reduce actors’ efforts in connecting. The majority of the events
and documents handled by TradeLens are not covered by the existing standards; accordingly, new
or modified standards are needed. TradeLens states: “Standards discussions are actively underway
with openshipping.org and work to align the TradeLens APIs with UN/CEFACT standards is in

28
progress.”
30
Still, in the wait for an universal standard, the technical set-up cost is substantial
enough for actors to hesitate. This issue has resulted in a catch- 22 situation, where no one wants to
take the risk of investing in a technical infrastructure that may not take off. Once a critical mass has
connected, network effects can be expected to kick in and fuel commercialization but until then,
growth remains sluggish.
This is the classical issue in which the first user of a new communication technology has no use
of the technology until others adopt it. The other part of the explanation is related to actors’
acceptance of the blockchain-based solutions to digitize sensitive trade documents. In our studies of
TradeLens, we have seen several different reasons why actors are hesitant to accept the blockchain-
based solution to digitization, including:
• Several of the stakeholders in the global supply chain are reluctant to share information e.g.
if they are competitors, an issue which makes them inherently skeptical of sharing
information of any kind, particularly not through a technology suggested by a rival.
• Some users (e.g., the authorities) are reluctant to change, in part because they fear that their
jobs might be at stake.
• Regulation is blocking the use of digitized documents for some purposes. For instance, EU
Regulation 1960/11, Article 6 requires physical documents. Accordingly, the paper
documents are sent by courier and can get lost on someone’s desk in one of the offices.
Importantly, it is up to the national governments as to whether they should accept the TradeLens
solution. As of early 2019, only the authorities in Saudi Arabia, Canada and Russia have publicly
announced trying the solution. However, authorities from other countries e.g. from EU and US have
been engaged in pilots. In some countries, this is a political rather than administrative decision. The
30
https://blog.tradelens.com/blog/open_standards

29
acceptance of the blockchain-based digitization in TradeLens may therefore not be up to authorities
alone to decide.
The acceptance of the blockchain-based digitization format is therefore also subject to a catch-22
situation. A large base of accepting industry leading actors would place pressure on national
authorities to follow. However, industry actors are waiting for the authorities to move before they
start to invest. Once again, adoption can be expected to be sluggish until network effects kick in.
As noted previously, the two explanations for the sluggish adoption of TradeLens are
interrelated. Figure 10 shows the relationship between the blockchain component and the enabling
technical infrastructure, i.e., SIP, and user adoption. The blockchain-based component has no value
without the enabling technical infrastructure; therefore, there is no value in a potential user
considering digitized trade documents. Furthermore, without a network of actors to accept the
digitized trade documents, there is no value in investing in an enabling technological platform for
the exchange of these documents, i.e., the blockchain component (Figure 10). Consequently,
TradeLens is the victim of what can be referred to as a “double-network effect situation.”
Figure 10. The double-network effect on TradeLens’ commercialization.
To reduce the dependencies between these two acceptance processes, it is possible to separate
the SIP from the PT digitized document component architecturally. This separation is already

30
happening to some extent because the SIP has already expanded to allow for other uses and other
complement services beyond what is offered through PT (see Figure 11). In theory, PT should also
be able to work on any other data-sharing platform, just as a Facebook app works on both iPhones
and Android phones. This approach would decouple the fate of the SIP and PT and remove the
double-network effects. However, because this is a pioneering effort, alternative and widely
accepted data-sharing platforms or valuable complementary services do not yet exist.
31
Therefore,
for the time being, the fates of the two components remain intertwined.
Figure 11. Decoupling of the SIP and PT components of TradeLens allowing other uses, other
platforms and other complementary services which reduce the dependencies..
Lessons learned
TradeLens provides a unique perspective on how firms explore what blockchains can be used for
and what type of business value they can create. The expectations of Maersk and IBM are that
31
A range of alternatives were initially prototyped, but none were found to be usable in the tested trade lanes described
above.

31
blockchain technology will revolutionize shipping — just as the advent of the standard shipping
container did.
However, all great solutions solve a challenging problem. In this case, the challenge is trust in
sharing information, initially in just the form of five critical paper documents, across the globe. In
addition to solving industry problems through TradeLens, they aim to disrupt the industry,
something that requires striking a delicate balance between delivering something that is good for
the industry with reinforcing Maersk’s competitive position. One possible way to achieve this
balance is to establish TradeLens as a neutral solution, while simultaneously as a first mover being
industrious in developing value-added services enabled by the TradeLens platform. For instance,
Maersk could use TradeLens to disrupt specialized companies (such as customs brokers or freight
forwarders that manage shipping from door to door), and enter into new segments of the market.
With interest in exploring the business value of blockchain technology remaining high across
industries, the journey taken by Maersk and IBM is a source of guidance and inspiration. We have
identified seven high-level lessons to be learned from the experience of developing and
commercializing TradeLens. These lessons will help other companies (private, not for profit or
public) to gain business value from blockchain technology.
We next discuss the seven lessons based on our research of TradeLens. We begin with two
lessons concerning strategy, followed by three lessons about the application and ecosystem
development, and finally two lessons focusing on application growth and scalability.
1. Blockchains are ecosystem solutions that require organizations to think
differently about strategy

32
Traditionally, companies in the shipping industry have looked for productivity gains and
efficiency improvements, asking how the activities used to accomplish their specific tasks in the
interwoven global transportation network supporting global trade can be improved. What happens
by others before or after in the global supply chain has typically not been of strategic consideration.
The focus on the individual organization and its (competitive) advantages rather than ecosystem
advantages have been evident in previous attempts to digitize the information flows in the global
supply chains for trade since both newcomers and incumbents have developed proprietary solutions
to secure the whole pie for themselves.
Managers of enterprises need to understand that primarily business value from blockchain
technology based solutions is through addressing inter-organizational challenges in the ecosystem;
accordingly, organizations need to rethink and go beyond the enterprise’ strategy.
The lesson learned about blockchain technology solutions from a strategic viewpoint is the
fundamental importance of refocusing corporate strategy from organizational performance and its
(competitive) advantages within the ecosystem to uplifting the entire ecosystem of actors e.g.,
customers, partners, authorities and even competitors. If a single actor, in this case Maersk, is
considered a direct competitor to the other potential adaptors and retains full control of the
platform and the blockchain solution built on top of it, the technology will be rejected immediately
by most other players in the industry and therefore never create any value for anyone. Accepting
this fact meant that Maersk and IBM needed to approach especially the commercialization of the
solution as an ecosystem strategy. Part of this strategy was to give up enough control of TradeLens
to be able to forge a critical partnership and manage the inherit tensions of collaborating with
suppliers, customers, authorities and competitors for a common good. Essentially, the strategic
mindset had to be shifted from a view of innovation as a single company developing and

33
commercializing a new product while fighting off rivals in the marketspace to an ecosystem in
which the actors had to balance the tensions of competing and collaborating at the same time
successfully.
2. Focus on the vision, not the return on investment (ROI)
When engaging with or exploring new technologies, such as the blockchain, traditional
investment models should not be used. The main reasons for this advice are that technology
exploration involves high risk and a high degree of uncertainty, but also potentially extremely high
rewards. One potential benefit is to prevent being disrupted. But how can such a thing be measured?
Instead seeing the blockchain as a normal investment proposal, it is critical to anchor the initiative
directly with senior top management. At this stage, blockchain may have a meaning in a greater
strategic context rather than as a provider of short-term economic benefits.
The initiatives and the vision behind TradeLens were well-established with senior management
from the very beginning. The initial champion was the new CIO of Maersk, who saw the project as
a method for creating new ways to collaborate — an approach which may be significantly more
innovative. Later, other senior management both within Maersk and IBM became sponsors and
champions of the initiative, including the CFO, CDO , and CCO of Maersk. The TradeLens
investment model has not been based on a return on investment (ROI) analysis. Rather, it has been
established with the view of senior management being that this innovative initiative supports the
vision of the Maersk (and IBM) and addresses some essential problems. As mentioned, the teams
were challenged prior to each funding of next round of innovation and development.
Lesson is to start with a vision, which can be shared and agreed with other potential members in
the ecosystem e.g. competitors and authorities, and remember that trust precedes adaption of

34
blockchain solution. A normal business value case with return on investment (ROI) is not
applicable; blockchain technology aim is disruptive and business value comes by disruption (and
scaling).
3. Blockchains are decentralized technical solutions to inter-organizational
problems
In the past, several attempts have been made to digitize the information flows in international
trade. TradeLens has a number of qualities that set it apart from previous solutions. The most
important one is the possibility of securing trust and avoiding political discussions of control.
A centralized solution based on high-level encryption and digital signatures could possibly
deliver acceptable security. Such a solution would, however, always bring the question of who
should be in control of the central database where the data resides. Would another carrier who is a
competitor allow Maersk to be in control? Could a specialist or commercial operator be handed
these rights? Would seemingly neutral bodies like the World Trade Organization possess the
technical capacities to develop, run and maintain such a system? For a centralized solution to be an
alternative, the answer to such questions has to a clear ‘yes’ while looking 20-30 years ahead.
The lessoned learned is that blockchain technology offers a solution to the trust problem in an
inter-organizational context by moving part of the complexity of the problem from the
organizational to the technical level. What the blockchain brings to the table is that actors have to
have confidence in the technical solution to contain the data distributed – not a specific company or
organization. A shipping company joining the solution should not ask whether they will give up
control to Maersk or IBM but whether the technical solution will be sufficient to ensure distributed
control.

35
4. Partnership trust precedes - and follows - blockchain trust
Much has been said about blockchain as an enabler of trust, and this idea seems to be correct in
the context of shipping as well. It is also important to acknowledge is that partnership trust is an
enabler of inter-organizational blockchains, not because anyone will consider the blockchain in this
specific context to be corrupted, but because of its role as a commercial solution. We see that
governance models change over time and so do some of the technical features of the blockchain.
These are elements that could be used to game the implementation in favor of one actor.
To attract adopters, Maersk and IBM need to build the trust with the community in two ways.
First, trust must be established that the solution will remain sufficiently open to enable unbiased
competition among the adopters. Second, trust must be established that the founders will be able to
navigate the ecosystem tensions and forge the necessary partnerships to make this innovation a
success. Without this trust, the blockchain will not gain adopters; hence, partnership trust precedes
adoption.
Interestingly, the blockchain is also used to fuel further trust in the initiative. Using the
blockchain indicates that Maersk and IBM are serious about giving up some control in order to
encourage broader adoption. And, as discussed above, the strength of the blockchain in enabling
commercial success provides confidence that the initiative will be successful. Therefore, trust in the
partnership follows the use of the blockchain. The trust and shared vision are fundamental prior any
business value can emerge.
5. Let legitimacy and political feasibility guide the starting point
In a complex domain such shipping, there are plenty of potential applications for the blockchain..
Initially, Maersk focused its work on a shipper using a trade lane between Africa and Europe since

36
it looked like it was possible for the solution to be accepted, including by customs authorities who
were positively prepositioned for the solution. From a technical perspective this decision made
sense as well, i.e., start with a reasonably accessible challenge and then tackle the more complex
challenges later on.
However, when the project went into piloting and later commercialization, the priorities shifted
towards the more challenging Europe-US trade lane, shippers with large volume and to the five
most important (for the authorities) trade documents. The solution had to be proven and accepted
with both the EU and the US authorities and most important documents involved; otherwise, there
would always be doubt that it could work. Furthermore, without the US on board, not enough of the
global container traffic would have been covered for the TradeLens to really take off.
6. Governance models need to evolve as adoption expands
To scale the usage of the solution is key in generation of sufficient business value. Attracting and
expanding with more members demands the governance models to be reconsidered. The
opportunities depend on actual situation of the potential members and to a large extend also politics.
However, some members’ business depends on the asymmetry in access to information and they
dislike the visibility enabled for all members. The interoperability of the architecture of the solution
is crucial for the flexibility and expansion with additional components and services fostering further
growth.
While a blockchain is distributed by design, there is still a need for a governance structure to
make decisions about how the blockchain should operate in terms of, in particular, rights and
liabilities. Initially, in the prototype stage, Maersk and IBM together made these decisions based on
their respective knowledge of shipping and technical possibilities. Doing so, for example, led to the

37
choice of an encrypted permission based blockchain rather than a fully transparent blockchain. In
this governance model, decision-making was uncomplicated and rapid.
To ensure dissemination of the technology, IBM and Maersk chose a version of a democratic
governance model for TradeLens: they have kept the governance within the TradeLens
organization, while leaving in place the option to consult an advisory board. With the expansion of
TradeLens, the role of the TradeLens Advisory Board has both been reinforced and refined. What
the advisory board offers primarily to its members is transparency in choices made, not real
decision power. It now includes actors, such as Maersk’s biggest competitors the Mediterranean
Shipping Company (MSC) and CMA CGM, and more are expected to be invited. In particular,
earning seats on the board and being given up control were key in getting the competing shipping
lines to join the collaboration.
The lessons learned about the governance of a blockchain is that as adoption expands, the
governance model needs to be revisited. New types of actors will be requiring the advisory board to
reflect their interests, both in composition and mandate. Perhaps at some stage the advisory function
will evolve into a steering function, with decision power. Exactly how the governance model of
TradeLens will evolve remains to be seen, but it is clear that it will need continuous adaptations to
reflect the requirements of its expanding user base.
7. Blockchain interoperability is a strategic growth consideration
Within the shipping industry, numerous parties push for different digital platforms and the use of
the blockchain for different purposes. As this digital landscape matures, TradeLens will have to
return to the strategic mindset of ecologies full of tensions between parties that are cooperating to
form their technological interoperability strategy. There are at least three interoperability interfaces

38
to be considered: (a) between TradeLens’ blockchain solution and other solutions for digitizing
global supply chains (including other blockchains), (b) between the SIP, the platform, and other
external digital document formats and (c) between the TradeLens’ blockchain and other digital
platforms.
More than anything, this is a strategic consideration of value creation and appropriation for
TradeLens. Concretely, the Israel-based liner company Zim Integrated Shipping Services (ZIM) is
one of the early adopters of the TradeLens solution. ZIM offers a commercial service involving
blockchain-based Bills of Lading for some trade routes where customs agreements are in place.
Should TradeLens allow this service to be interchangeable with the SIP?
Similarly, some of the Maersk’s largest rivals have signed a memory of understanding to form a
consortium to develop a similar blockchain solution the Global Shipping Business Network
(GSBN), an open digital platform based on distributed ledger technology. Should TradeLens seek
interoperability between the two or provision its blockchain solution for both solutions?
There is no immediate answer to these questions. The lessoned learned about interoperability is
that it is both a technical as well as strategic consideration. As such, the answers to the questions
depend on the possibility for value creation and appropriation. If more value will result and you
will be part of capturing that value, then interoperability is the way to go. If not, you and your
existing partners should consider how to respond to a new technology e.g., forming a competing
partner network for growth.

39
The future of TradeLens
Is the future of containerized shipping in the hands of TradeLens? As of July 2019, TradeLens
reports
32
it is processing over 10 million events every week, but the number of shipped containers
handled by TradeLens was not revealed. However, the growing ecosystem is comprised of more
than 100 organizations and will potentially cover more than half of the world’s containerized trade.
The most important ecosystem participants are the top carriers, including Maersk, MSC, CMA
CGM, Hapag-Lloyd and ONE – Ocean Network Express, and the top ports/terminal operators,
including PSA International, Hutchison Port Holdings, APM Terminals (owned by Maersk), DP
World and China Merchant Holdings International.
One could state that TradeLens is the future of container shipping since it is close to reaching
critical mass when it comes to actors. However, few customs authorities accept the TradeLens
solution for trade reporting. In addition, TradeLens has not reached a critical mass when it comes to
container shipments. Therefore, we expect that the next step for TradeLens is to increase the
number of containers and shipments it processes. Doing so will require that an increasing number of
participants join the ecosystem. In particular, authorities around the world are crucial. Notably, the
Canada Border and Services Agency
33
, Saudi Customs
34
and the Russian Authorites have
announced their intentions to pilot the solution.
In the end, we can expect a small number of competing solutions to emerge for controlling
different geographical spaces and different verticals related to shipping. For instance, Cosco, one of
Maersk’s largest shipping competitors, has announced the development of a similar system. Other
players, such as Amazon and Alibaba, may be contemplating their own solutions. What the future
32
www.TradeLens.com
33
https://www.port-montreal.com/en/tradelens-en.html
34
https://www.customs.gov.sa/en/node/1022

40
holds remains to be seen, but, at this stage, TradeLens with blockchain technology seems to be
perfectly positioned to become a relevant key player in the future of delivering value from
digitalization of the containerized global supply chains.

41
Appendix: Case Study Methodology
We conducted a longitudinal case study of the emergence of TradeLens from 2013 until today.
One of the authors, Thomas Jensen, was employed by Maersk from 2013 to 2017 while enrolled in
the PhD program at Copenhagen Business School to work specifically on the innovation leading to
TradeLens. This set-up gave him unique access to TradeLens.
We collected data from a wide arrange of sources, including Thomas Jensen’s participation in
the development and pilots of prototypes; 32 formal interviews with key informants; four
practitioner conferences covering fruit import, customs, and port authorities;, two focus groups
discussing shipping terminal management and fruit logistics; two months of observation over a
period of two years of rose and avocado trade lanes (shipments from Kenya to the Netherland); 17
SIP and PT project meetings with different stakeholders e.g. from Maersk, IBM and the local
authorities; 13 field visits to ports, importers, exporters, customs agencies, shipping terminals and
freight forwarders; publicly available documents as well as corporate documents. The process
started in 2013 and ended in 2019.