Episode #12: Blockchain, the ultimate solution to digitizing and improving global shipping with C...

Computers now have primary control of critical vehicle functions.

Welcome to the IBM Keep It Simple Technology Podcast, where each episode we discuss technology, but in a simple way. We keep the explanations simple, but what we spend our time on is emphasizing what this technology means to you and how you can best utilize this technology for you and your business. Your host, as always, Thomas Anglero.

Welcome to the IBM Keep It Simple Technology Podcast. I am Thomas Anglero once again with another great episode with another amazing guest. And this guest is challenging me. I was brought up in New York City, had a lot of Italian friends. She's Italian, so I'm gonna try to really impress her with my Italian dialect. Here we go. Our guest's name is Carlina Marani. Carlina, did I pronounce your name correctly or am I embarrassed?

Yes, no, you did. That's fine. Thank you.

Hi, Carlina. Okay, no more Brooklyn jokes. Thank you for coming on the podcast. And you are an expert in this area of blockchain. And that's what we're going to talk around. We're going to talk about Tradelands specifically and blockchain. Those two words probably mean not much to many people. And what I first like to do, first thing I want you to do, Kalina, is to just in simple terms possible, just tell people what is blockchain, because everybody's heard of blockchain. Some people know that blockchain came from Bitcoin, and then they go, what the hell? What does that mean? Can you just simply tell people what is blockchain and why should they care?

Yes. So if you say Bitcoin, that's not a good idea.

Bitcoin just crashed.

No, no, well, because it's crashed, but also because it's cryptocurrency. So of course it's a form, but it's not what blockchain is. So I could start saying all difficult terms like distributed ledger and things like that. But if You look at blockchain, it is a solution, a technical solution that you use to make sure that the information that is on the blockchain is trusted. So you make sure that if there's information or data or documents on whatever platform you build on blockchain, you are certain that that information that you know where it comes from, that you know who touched it. So there's an audit trail and that you know that you can trust it and that you can, that you can use it without any doubts within your ecosystem or with your business partners. I think that's the easiest way to explain it and to keep away from the hard technology.

Right. And, and to emphasize the beauty of what you said, and you said it very well, is that in comparison to today's systems, there is— that it lacks the transparency that is built into blockchain, correct?

Sorry, can you repeat that question?

Absolutely. It wasn't a question, it was just more of a statement. What I was saying was, to clarify what you were saying, was that your description of blockchain, right, is that it provides transparency.

Yes.

Where existing systems today don't have the transparency of blockchain.

Yes, and more than transparency, the real trust, because transparency is still not going down to where the source was, who the source was, and where it comes from. And that's one of the problems when you say cryptocurrency, because that is, even though they say it's blockchain technology, it's not the use of blockchain where you would have the trust and the transparency that you would have in other blockchains.

And I think that's a really important point. So you made already in the first few minutes, you made a really important point. So because, you know, a lot of us come from the Bitcoin to blockchain migration of mental thought. And it's really important for people to understand that here in 2020, when this podcast is being recorded, that that association was wrong and they should no longer follow that train of thought.

Yes.

And going forward, they should follow the train of thought of how blockchain is actually being utilized in the real world. And that's where we're going to go now, because people understand, okay, they have a high-level understanding about blockchain. Okay, it's an open ledger. I can see who did what, therefore I could trust it. Okay, got that. But now the people are asking, can you please give me an example of how this is used in what business situation? So I think this is the point in which we talk about TradeLens, because that's— well, you tell us what is TradeLens and how is it used? And then we'll talk about examples of how it benefits people listening. So go right ahead, Kalina.

Good. So yeah, TradeLens is one of the examples. I wanted to go with an easier one to start with, but this is good. So TradeLens is a supply chain platform. So if we look at TradeLens, TradeLens was set up by IBM and Maersk together as a start. We are now slowly getting all the big other ocean carriers on board. And the idea is that we can track and make visible all the information around every container that is shipped worldwide. So that is the vision. At the moment, if we look at the ocean carriers we have on board and the information we have, we're looking at 60% visibility, container visibility worldwide. And the vision is to get that close to 100%.

Um, let's, let's just, let's just simplify everything.

Yes, good.

So TradeLens is, is the— well, let's go back one step further, and that is that today's situation, the business model, the business environment we're looking at now is, uh, shipping carriers, right? Shipping containers. Sorry, shipping containers. And you're saying that if I use your inverse, your number, 40% of all shipping containers we don't have enough information to be able to track it? Is that what you're saying?

Yeah, no. So if you look at how a container is shipped, what you normally see is that, say, the container leaves Port of Rotterdam, where I am, and it goes through one of the ports in Norway, where you are, and then it goes from there, it goes to the US. You have so much information around this container. So it starts with all the documents that the owner of the goods that ships the goods needs to give to the port authority or the terminals and customs, for example. And then you get all the information that the carrier has on it and it piles up. So what you see is that if a normal container to ship that from Rotterdam through Norway to the US would cost like $600 to ship, $200 of that are costs concerned with documents, paperwork, shipping information, customs stamps, etc. So the idea of TradeLens is to make sure that we digitalize that and we digitalize it on a trusted platform based on blockchain and that you can track and trace. So that's the visibility part, the container, but that you can also digitally handle all the documents, which would benefit, of course, that the container would not cost $600 but $400. But it would also make people's lives a lot easier because now there are so many people involved that in most of the businesses it touches, the container touches, it still calls other paperwork, sometimes even a fax. So to get that into the 2020 digitalization stage, let's say. So yes, I'm saying from 40% of the containers we do not have that information on TradeLens yet, on 60% we do have the visibility bit, And we are slowly with every port terminal, but also every end customer that joins TradeLens, we're getting more and more information also about the document flow.

Wow. So, so, so again, let's simplify this. So TradeLens is the ability to track things that are being shipped on a container, and it's this digitalization of the paperwork and also the simplification of the tracking. And also the transparency where the thing has been. And I guess also increases accuracy incredibly as well, correct?

Yes, correct. And it increases also— decreases delays. So for example, you can imagine that if you have a container with, let's say, avocados stuck in Dubai in summer, you can throw away the goods after half a day. While if you have a digitalized supply chain, at that point it won't be stock anymore and you can't throw away the goods, but you can sell them. So it, there also the delays gets less and there also you have a big cost saving. Wow.

So I mean, this is, I mean, I don't, I'm gonna try to simplify this again because this is a big deal.

Yes, it is.

Because this changes everything. And I know everybody uses that expression all the time, but what you're talking about is really the simplification of the globe.

Yes.

In terms of how we distribute things, how we ship things. It's removing the complication of things, is actually things making things more efficient. Things are being transported quicker. Yes. Is increasing your revenue because you're not losing goods. The chances of losing goods, goods going rotten, things being lost, all those things being reduced. I mean, this is like fixing the world's global supply chain.

Yes, yes. And that, that is the vision, and we are well, well on our way as being TradeLens. Of course, if you look at the practical side of it, you also need the whole globe to make this happen. So we are moving, and I think if you look at The global vision we have, we are moving rather fast, but we still are depending on so many parties in a huge ecosystem that needs to work all together that it takes time. But I am convinced we will get there sooner than later, let's say.

Now, let's go through a couple of scenarios because I'm putting myself in the shoes of people listening to this.

Good.

Because I'm all excited and there's somebody out there right now. I can read their mind and they're going, this sounds great. And there's some companies out there listening saying that they have goods that they're shipping halfway across the world or whatever. They're shipping it internationally. And they're saying, great, how do I get the goods, let's say, that are being manufactured in Malaysia or China or wherever? Or wherever, or maybe just being manufactured in the US, and I need to ship it a couple of thousand miles away or tens of thousands of kilometers away. How do I make sure, or who do I contact, or how do I get my stuff to be shipped via TradeLens? Because that way I actually can increase my profit margin because going the TradeLens route is the most efficient, most profitable for me. Because I'm sure some people are thinking that. Is it that simple to think that way, or is it not Is it right to think that way?

That depends on what the shipper wants. So yes, it is that simple to think if you would look at a company that has containers with one of the ocean carriers we are already working with and they want pure visibility, then it is that simple. Then they can contact me or anyone else on the TradeLens team and we can, we can see how we can onboard them. And once they're onboarded, and that's, let's say, a couple of weeks for some companies, couple of months for other companies, depending on how much integration is needed. And then they will have visibility on their containers.

Okay, you're talking specifically now about the container companies, correct?

No, I'm talking about if I say shipper. So that's a little confusing if you look at the vocabulary used in the whole maritime logistics. If we, what we call a shipper is the owner of the goods.

Exactly. So the scenario, that would be me, the person who—

That will be you. Yes. So say you work, you ship all your containers, be it through Maersk, be it through Seaboard or any of the other containers that are ocean carriers that are live. On our platform.

Right, Intercontainer Companies, right?

Yes. I would be able to onboard you and then from the moment you're onboarded, so a couple of weeks, let's say, you have visibility through the TradeLens platform of your containers and where they're going. So that would be the easy scenario.

Okay, so I am a sneaker manufacturer.

Yes.

I make hats and I make them somewhere in the world, it doesn't matter because TradeLens is global. And I want to use TradeLens because of all the advantages— transparency, lower costs, ever. Jesus Christ, I don't think there's any disadvantage. No, I'm just going to stop there because I'm in love with this technology. So I would contact you or some— or some— would I contact you or a member, any member of the— is there a TradeLens website? Let's simplify this for people.

It's very simple. It's tradelens.com. Tradelands.com. So that's not hard. No.

So, so anybody out there who has— is manufacturing goods, or not even just manufacturing, anyone shipping goods, is that correct to say that?

Anybody shipping goods, yes. And, and that's mostly the manufacturer because in the NTE senses, so if you make sneakers, you're my shipper, uh, and of course you can give it to a freight forwarder or any other company or trucking company that will move it for you, but in the end, you are the owner of the goods. Okay.

And I apologize for the next question. Now, this is the engineer in me coming out. Is the size— or sorry, the quantity of goods— does that matter? For example, I am a small company, but I have goods being made someplace in the world for me, being shipped to me. Let's say I'm in Germany. Does that matter that I'm only going to make 500 pairs of sneakers? Is that too small? Do I need to fill a whole container, or does that not matter?

No, so, so it, at this point it does matter. So what we look at the moment it becomes an advantage for you or the onboarding costs, let's say we make and the onboarding efforts are doable. We're looking at companies that ship 5,000 containers or more a year. And I mean, if you, if you make sneakers, you do that. If you make 500 pairs, you probably ship them off by plane. So what we see is the most shippers or owner of goods that ship on sea, they do fill a couple of hundred, couple of thousand containers a year. And if you look at the bigger companies, let's say that you ship auto parts, so car parts, you would easily ship somewhere between 100,000 and 400,000 containers a year.

Hmm, hmm, hmm. Got it.

So I have a lot of smaller customers that say, listen, we have, what is it, 10,000 containers, 20,000 containers, and it's very interesting for us to know where the goods are.

And what's that minimum number one more time, please?

5,000.

5,000.

Okay, but if you have 4,800, please give me a call.

I get you a deal, no problem. I give you a call, or again, go to tradelens.com.

Tradelens.com, there you can link the website. But, and of course, on LinkedIn, you can find everybody that's connected to Tradelens.

So exactly. And also, you said Tradelens is young. So when did TradeLens start? Because—

Well, the whole idea of doing a global trade platform started, I think, more than 25 years ago. The European Commission, European Union has been trying to set this up. There's been several attempts to do it. But, and then we get to technology. Until blockchain technology really came into play, the whole trustworthiness and, let's say, audit trail and making sure that the information that was on the audit trail was also true and you could check it, that helped a lot. So until blockchain came into play, there wasn't a technical solution to make this global platform work.

I'm in awe because I feel like I just skipped one of the most important things of emphasizing, and that is you keep on talking about the word trust.

Yes.

And that's probably the biggest thing.

It is.

It's absolutely the biggest thing. So, this is actually the implementation of a digital platform that actually puts trust into my business where I'm just thinking of the expression from the United States, you know, Somebody says, hey, where'd you get that from? And the guy replies, like, the person replies, hey, it fell off a truck.

Yes, we have that same expression.

Yeah, yeah, right. So, so that expression dies with TradeLens because everything's tracked. When I— go ahead, please go ahead.

I'm sorry. At the moment that the end-to-end information of your sneakers, let's say, is on the TradeLens platform, underpinned by blockchain, of course, then yes, that goes away. Because then you track, you can track from the moment your sneakers leave your factory. And even if you want to, you could also track, of course, all the material coming in from your supplier. So it goes both ways. So from the moment it leaves the factory until it gets to, let's say, the store that sells them, You can track the goods and you can be sure that if you have all the suppliers, ocean carriers, and freight forwarders in between, they're using TradeLens, you can track every step of the way.

This is huge. This is huge because, I mean, in society today, you know, trust is paramount because people trust each other less and less because, you know, a lot of people lie, a lot of people base their business on lying. But now when you actually say on your product that this product is 100% sourced from this place, and I can guarantee you that is not done this and this, you actually with TradeLens, you could stand there and actually put down the digital paperwork saying, here is the proof.

Yes.

I mean, that is huge towards business models and new revenue models and establishing your brand or reestablishing your brand, correct?

Yes, correct. It is. It is. And of course, it's not only TradeLens. There's a couple of other solutions. If we look at— we're now talking about sneakers, but if you would look at food, for example, then you would look at Food Trust. So you can also look at, as I said, the part before your sneakers. In this case, the part before, let's say you make strawberry jelly. Where the strawberries come from the farmer, and then you can check what the farmer does with the strawberries, what he used to grow them, if there's no, let's say, products used that are poisonous, etc. And then you can track it until, let's say, he makes jelly of it. And then of course when the jelly is shipped, we can track it on trade lanes again. So it is used. It's And as you said, trust. Until now, there wasn't a way to anchor trust in this whole process. And now with the blockchain technology, there is.

It's bringing honesty back into business.

Yes.

That's what TradeLens is. That's beautiful.

I left you speechless.

Yeah, you know, I have a new favorite technology, you know. So much for artificial intelligence, quantum computing. I'm in love with TradeLens.

Good. And you can combine, of course, everything you just mentioned. You can understand that if you have a supply chain solution as TradeLens, and I just mentioned avocados, you can combine it with the IoT information you have, for example, from your IoT device in your container.. So you can see if it's been fresh, if it's been kept well, if it hasn't been, let's say, exposed to, as I gave an example of Dubai, it hasn't been exposed to 3 days of 30 degrees in Dubai. So you can combine a lot of information or during the supply chain. And of course, afterwards, when you have all the trade lens information, we do build dashboards for clients that say, okay, what can I now do with artificial intelligence with this data I'm getting?

So, so to simplify what Carolina just said, I think it's really important, and I'm going to give a really simple example. We keep with the strawberry. So what you're saying is a person, uh, a farmer, from the moment they pick that strawberry— poop, they pluck that strawberry— from that moment, that one individual strawberry can be tracked with IoT, with all the technologies that we have today, it will be tracked from that moment all the way to the time it reaches your table and you have it in your hand, you're about to put it in your mouth. We can digitally track not just the journey, but also with IoT and temperature sensors and everything, we can track what temperature environment it was all along the journey and that it makes sure that it wasn't ruined because it was too warm or too cold. That is how amazing these technologies are today and is empowered by Tradelands. Am I correct?

Yes. Yes.

Holy cow. Ladies and gentlemen, we know what we need to support in 2020 and 2021. Carlina Marani, do you have any last words now that you got a new big fan in me on your technology for this podcast? Any last things you'd like to tell anybody?

No, well, I think we discussed TradeLens rather well. I think the most important thing is the digitalization part. So if I want to use some last words, I would say please make sure that you look at digitalization in your companies, not only for TradeLens, but also if you look at the situation we're in now, with the schools, etc. I think we, we talk about digitalization a lot, but we really need to take that step. And as you said, that will bring us cost reduction, it will bring us efficiency and trust. It will bring us trust. So my call to action would be please look at digitalization and also implement it.

And to amplify what you just said, which is really important, there's a lot of companies out there who haven't moved to digitalization because they said, "No, our company is based on trust and honesty. We can't move on. We're an old-school type of company." But the whole, you know, the last 25 minutes that we've been talking, you've been talking about TradeLens, how TradeLens brings back trust and honesty back into the business. So companies who haven't digitalized because they've not been afraid, but they're afraid that the trust and honesty may be lost by digitalizing. No, no, it's actually good, right? It's— this is the reinforcement of your traditional corporate values on a global basis. Yes, that's right. Yes, you are amazing.

Thank you.

You, you kept it simple.

I hope I did. I hope I did enough.

And you also made it incredibly interesting. A technology where people hear blockchain, what is that? Now people absolutely get it. And once again, if they want more information on TradeLens, they go to that very difficult website. Say it again.

TradeLens.com. There it is.

Thank you very much, Kelly.

No problem.

Thomas Anglero thanking all you to listening to the Keep It Simple Technology podcast. Please like, subscribe, subscribe. We're on Spotify. We are everywhere. And we will see you all next time. Take care. Bye-bye.