Global trade is the beating heart of the global economy. It metaphorically (and sometimes literally) pumps life-giving blood around the world delivering nutrients the growing economic “body” needs to survive.
Remarkably little progress has been made in adopting blockchain technology into the global logistic industry; albeit not for want of trying. IBM and Maersk announced their partnership back in 2017 which was both preceded and swiftly followed by any number of blockchain startups attempting to carve off their own parts of the supply chain from which to make a business.
If history is any example it may take yet another 5–10 years just for a business network to agree on some basic data standards. When the container was first used commercially by Malcolm McClain in 1956 it took another 20 years for the globe to agree to a set of standard dimensions. Until standards were set, investment in infrastructure like cranes and port enhancements was incredibly risky. What if your crane didn’t fit the updated standard container dimensions?
When Fr8 Network threw our hat in the ring of solving the data sharing issues of logistics, we knew it wasn’t going to be easy. Maersk (the #1 container shipper by volume) and IBM’s deep pockets backing TradeLens had us concerned we may be too late.
However, the path to data standards in logistics is long and rocky and the TradeLens truck popped a tire along the way, which Fr8 Network is poised to steer clear.
There is amazing technology and scale to the TradeLens platform. In contrast, the adoption and use of Blockchain in the stack is rudimentary. Fr8 Network has taken this as a consequence of the fragmented nature of the businesses which encompass the logistics ecosystem, and noted that designs of any similar solutions need not burden themselves with expensive and bleeding edge foundational components but instead focus on solving the challenges the ecosystem faces cheaply and efficiently.
With that in mind we have set our sights on an often overlooked part of the logistics industry — global mobility. Global mobility, aka the relocation industry, is a subset of international logistics that specializes in moving people and their belongings from one country to another. The biggest single client of this industry is the US Military which provides for 14% of the 2018 shipments. Annually the US Relocation sector accounts for $13Bn in revenue.
It is the intention of Fr8 Network to sponsor, educate, design and help build the foundational solutions for our applications to succeed. Fr8 Network is moving as quickly as possible but as mentioned earlier, progress of this scale is measured. And for good reason; you wouldn’t want the heart of the global economy to break down. To begin, we must persistently educate and research.
Why would a 6-truck business making $1m/year handling moves care about an obscure database technology like blockchain? The answer is they really don’t care about a fancy database, but about what blockchain does to help their business. Collectively there are hundreds of thousands of these companies in operation; in the US alone they represent 90% of the trucking sector.
Unfortunately the transition between “why should I care in theory” to “here are facts and figures about why you should care” when discussing blockchain technology has not been fully realized. Back to TradeLens and its progress, we yet to seen a proper case study showing off the cost/benefit analysis of joining the ecosystem.
The closest comparison by scale is “Single Window” systems. These connect the various governmental bodies that regulate trade into and out of a nation. With a Single Window system, the relevant data about an import or export is sent simultaneously to customs, tax, port, security, and other agencies need to give a thumbs up and collectively clear the good for the next stage.
Single Window acts as a hub of data from which a group of trade participants can communicate about what needs to get done and how issues get handled. And where adopted, Single Window has proven immensely valuable. In Korea, their Uni-Pass saves private companies $2.4Bn a year in logistics costs, and taxpayers no longer have to pay the salaries of 130 customs employees. Traders with the Philippines have certainly noticed the reduction in customs custody time to a mere 4–6 hours, versus the 6–8 days previously.
Almost universally the adoption of a Single Window system has improved the economies of the instigators. Data shows that the more cumbersome the customs clearance process, the worse off that nation’s people become.
The above points and more have been provided to the relocation industry through two webinars. CEO Sloane Brakeville gave these presentations on behalf of the largest standards setting body in Global Mobility — FIDI. They are online and free to view by visiting FIDI’s youtube channel, here is part 1 and here is part 2.
Fr8 Network is working hard to strengthen the heart of our global economy. Change of this magnitude will not happen overnight and a lot of groundwork must be lain for change to be adopted. Starting with data standards, Fr8 Network leadership is participating in the IAM summit in Chicago which takes place this week. Results of this summit will be summarized in a blog post next week.