• Binkabi Commodity Monday #8 | (View online) in your own language

No plain sailing

Commodity Monday, 29 October

TradeLens struggle to sign partners to shipping blockchain

TradeLens, a joint effort between IBM and Maersk was launched in early August 18 with great fanfare (see article in GTR by Sanne Wass). The expectation was high that shipping and ultimately international trade will be fully digitised. At the time the joint venture was reported to have more than 90 participating organisations. This week it was revealed that not all has been plain sailing. 

It’s hard enough to get enterprises that compete with each other to work together as a team, but it’s especially tricky when one of those rivals owns the team. TradeLens has enticed only one other carrier onto the platfrom: Pacific International Lines (PIL), one of the eight shipping lines in Asia and the 17th in the world based on cargo volumes.

Maersk’s two rival shipping carriers, CMA CGM and Hapag-Lloyd, have publicly dismissed the Maerk-IBM blockchain solution as unusable. The problem is that Maersk’s shipping rivals are concerned with intellectual property (IP) issues. TradeLens has tried to address this problem by recasting the arrangement as a “joint collaboration” in a bid to appear more neutral than the originally billed joint venture. But in substance, Maersk and IBM each have full and equal rights to the IP.

“We do need to get the other carriers on the platform. Without that network, we don’t have a product. That is the reality of the situation.” Marvin Erdly, head of TradeLens at IBM Blockchain, told Coindesk.

Four Agricultural Giants Eye Blockchain in Push to Digitize Global Trade


The four giant transnationals, known as the ABCD group for the alphabetic convenience of their initials, ADM, Bunge, Cargill and (Louis) Dreyfus, account for a quarter of global trade in agri food. International trade, as we all know, are notoriously paper-based. The ABCD group have announced that they will come together to digitise trade, using blockchain and AI. It is great news indeed. 

The firms initially plan to focus on automating grain and oilseed post-trade processes, which are currently largely conducted manually and are a high-cost portion of the supply chain.

One of the specific problems the companies are trying to solve is the 275 million emails being sent every year by commodity traders to process just 11,000 shipments of grain transported by sea, according to a Reuters report Friday.

Overall, the four companies aim the new tech push to usher in shorter document-processing times, better supply chain visibility and transparency, and greater overall efficiency.

Swift: there may be better technology out there, but we've got the network


Swift provides a network that enables financial institutions worldwide to send an receive information about financial transactions in a secure way. The SWIFT linked more than 11,000 financial institutions in more than 200 countries. The monopoly player in global trade payments, has admitted that its technology may not be the best available, but claims that it does not matter, since it has the lion’s share of the market.

Swift has been focusing heavily on its global payments innovation (gpi) technology. This technology was dismissed by rival and blockchain-based payments provider Ripple as being a "marginal improvement". 

Delbaere, a senior executive at the organisation claimed that technology is secondary to network and that potential competitors would struggle to compete, due to Swift’s omnipotence in the market.

“If you remember VHS versus Betamax, it was universally accepted that Betamax was the best technology but in the end VHS won. It’s a question of who do you have behind you, what kind of network do you have and who is willing to follow you in your transformation? On that front, there’s no comparison.” 

Wary of crypto, UK government blocks Royal Mint's digital gold


Britain’s Royal Mint has frozen plans to launch a digital gold token after a partnership with U.S. exchange group CME failed and the government vetoed a plan to have the tokens trade on a cryptocurrency exchange.

The 1,100-year old Mint announced its plan to issue tokens worth up to $1 billion on a blockchain-based trading platform run by CME, saying they would give investors an easy way to buy and trade physical gold held in its vaults. Royal Mint Gold was to launch in the autumn of 2017, but CME decided at the last minute to pull out, leaving the Mint without a trading venue, sources said. 

When a blindsided Mint sought to save the project by partnering with a cryptocurrency exchange, Britain’s finance ministry in early 2018 refused to permit it. The demise of the potentially ground-breaking project highlights the wariness of governments to become involved in the largely unregulated world of cryptocurrency exchanges. 

“Sadly, due to market conditions this did not prove possible at this time, but we will revisit this if and when market conditions are right”, the Mint said.