TRADELENS OVERVIEW 20-SEP-18. Lars Mikkelgaard-Jensen.

Transcription

1 TRADELENS OVERVIEW 20-SEP-18 Lars Mikkelgaard-Jensen.

2 20-Sep-18 2

3 Introduction 20-Sep-18 3 GLOBAL TRADE IS HIGHLY INEFFICIENT AND BURDENED BY PAPER-BASED PROCESSES Inland Transportation Data trapped in organizational silos Shippers / Beneficial Cargo Owners Disparate perspectives on transaction state Ocean Carriers Custom Systems Supply Chain Visibility Systems Manual and time-consuming processes Ports and Terminals Supply Chain / Transportation Management Systems Clearance processes subject to fraud Port Community Systems; Terminal Operating Systems Freight Forwarders Authorities Trade Associations Custom Brokers

4 Introduction 20-Sep-18 4 A FEW EXAMPLES FROM OUR PILOT ILLUSTRATE THESE INEFFICIENCIES A single shipment of avocados from Mombasa to Rotterdam involves 30 actors, 100+ people, and 200 information exchanges Pilot shipments from Central Europe to the U.S. resulted in containers being delayed for 4 weeks due to lack of transparency and delayed information exchange A customer support agent for a freight forwarder may have to make up to five calls to different parties to answer a simple location question KEY TAKEAWAYS Data are siloed Inconsistent information across organizational boundaries and blind spots throughout the supply chain hinder the efficient flow of goods Complex, cumbersome, and costly peer-to-peer messaging Manual, time-consuming, paper-based processes Risk assessments often lack sufficient information; clearance processes subject to fraud Missing customs documents prevented gate-in at time of arrival Pre-announcement to Terminal was not updated in time. Containers arrived on different mode, causing complications for receipt Late filing due to miscommunication between exporter and Customs over documentary requirements. Containers missed the vessel due to late gate-in, visibility issues and communications delays; as a result the containers were rolled To track a ship or container for the BCO, the Customer Support Agent from the Freight Forwarder may have to call the: Port Carrier Trucking operator Rail operator This scenario occurs throughout the supply chain Business processes are manual and intensive Supply chain partners spend too much time chasing information Limited visibility over transport plan issues meant inland providers were unable to carry cargo on the expected date

5 Introduction 20-Sep-18 5 IBM AND MAERSK HAVE LAUNCHED TRADELENS An open and neutral supply chain platform poised to transform the industry TradeLens is built for the industry and offers benefits to trade participants from across the supply chain ecosystem Responding to industry feedback, IBM and Maersk have revised the approach and are proceeding under a collaboration model, which offers greater flexibility and responsiveness to industry feedback An Industry Advisory Board will be formed to help shape the platform and drive standards Maersk Line and Hamburg-Sud are participants under the same terms as other network members Core platform components are available today under an Early Adopter program; full release remains on target for Q4 2018

6 Introduction 20-Sep-18 6 THE TRADELENS PLATFORM Digitizing the global supply chain Inland Transportation Connects the ecosystem Brings together all parties in the supply chain - including traders, freight forwarders, inland transportation, ports and terminals, ocean carriers, customs and other government authorities, and others - onto a Blockchainbased platform with a secure permission and identity framework Customs Systems Customs Brokers Shippers / Beneficial Cargo Owner Supply Chain Visibility Systems Drives true information sharing Provides for the seamless, secure sharing of real-time, actionable supply chain information across all parties to a trade - encompassing shipping milestones, cargo details, trade documents, the structured data embedded in trade documents, customs filings, sensor readings, and more Fosters collaboration and trust Enables the digitization and automation of the cross-organization business processes integral to global trade, including import and export clearance, with Blockchain ensuring secure, auditable, and non-repudiable transactions Ports and Terminals Ocean Carriers THE PLATFORM IS BUILT ON AN OPEN TECHNOLOGY STACK AND IS UNDERPINNED BY BLOCKCHAIN TECHNOLOGY Trade Associations Supply Chain / Transportation Management Systems Spurs innovation Lays the foundation for ongoing improvement and innovation through an open, non-proprietary API, the use of standards and promotion of interoperability, and the launch of an Applications Marketplace that parties can use to build and deploy TradeLens-powered applications for themselves, their partners, and their customers Freight Forwarders / 3PLs Port Community Systems; Terminal Operating Systems Financial / Insurance Services Authorities

7 Introduction 20-Sep-18 7 BCO / NVO FFW / CHB / 3PL Inland Transportation Customs / Government Authorities Ports / Terminals Ocean Carriers Ports / Terminals Customs / Government Authorities FFW / CHB / 3PL Inland Transportation BCO / NVO SHIPPING MILESTONES AND SHIPMENT DATA Start container tracking Empty container picked up from depot ETA empty container at stuffing site ATA Empty container at stuffing site Container stuffing completed at inland location Not exhaustive list of milestones managed by platform VGM submitted Container sealed ATD Packed container from stuffing site Estimated gate in for packed container at terminal export Gate in full at terminal export ETD packed container from export terminal Packed container loaded Export documentation cleared Container ready to load ATD packed container from export terminal ETA packed container at import terminal Temperature update Estimated discharge time for packed container at import terminal Import documentation cleared Container selected for inspection ATA packed container at import terminal Packed container discharged at import terminal Estimated gate out of packed container from terminal import Gate out packed container from terminal import ETA packed container at stripping location ATA packed container at stripping location Seal removed Packed container stripped at inland location Empty container ready for pick-up Empty container picked up from stripping location ATA empty container at depot Container tracking ended STRUCTURED AND UNSTRUCTURED DOCUMENTS Packing List Bill of Lading Export Documentation Advance Declaration Pre-Paid Invoice Certificate of Origin Shipping Instructions ISF Geography Specific Certificate Dangerous Goods Declaration Cargo Specific Certificate Customs Clearance Commercial Invoice Import Documentation Not exhaustive list of documents managed by platform TRADELENS BLOCKCHAIN BUSINESS NETWORK TRADELENS PLATFORM

8 Introduction 20-Sep-18 8 TRADELENS SOLUTIONS LANDSCAPE APPLICATIONS AND SERVICES NETWORK Comprised of the TradeLens network members, such as carriers, ports, and customs authorities, that connect to and provide data to the platform PLATFORM Accessible via an open API, the TradeLens Platform brings together the supply chain ecosystem and enables the industry to share information and collaborate; Blockchain and cloud technologies power the platform An open marketplace that allows both TradeLens and third-parties to publish fit-for-purpose services atop the TradeLens platform TRADELENS

9 Introduction 20-Sep-18 9 TRADELENS AND BLOCKCHAIN Blockchain addresses the underlying challenges inherent in collaborating across a distributed, fragmented supply chain ecosystem SHARED LEDGER SMART CONTRACT PRIVACY TRUST Append-only distributed system of record shared across business network A network of industry participants maintains a distributed, permissioned ledger with copies of document filings, relevant supply chain events, authority approval status, and full audit history; every change results in a new, immutable block Shared business logic governing what transactions may be written to the ledger Cross-organizational business processes, such as import and export clearance, are preprogrammed and built into Blockchain and distributed to and executed on the network, preventing any member from changing the business logic Ensuring appropriate visibility; transactions are secure, authenticated and verifiable Cryptography enables permissioned access so only the parties participating in a specific shipment can submit, edit or approve related data Transactions are endorsed by relevant participants Information such as documentation filings and authority approvals can only be changed if endorsed by the parties taking part in the shipment; full audit history maintained on the Blockchain

10 Introduction 20-Sep THE TRADELENS ECOSYSTEM Provide and gain access to end-toend supply chain information Ocean carriers Primary consumers and beneficiaries of the platform Ports and terminals Shippers (BCOs, retailers, manufacturers, etc.) Government authorities Inland transportation Network Members Clients Freight forwarders, customs brokers, 3PLs Financial institutions 3rd party data providers TRADELENS PLATFORM Offer value added services to the ecosystem through a platform marketplace TradeLens offerings Applications Marketplace Offerings from Network Members and Clients Offerings from third parties

11 Introduction 20-Sep A global network of interconnected shipping corridors will link ports and terminals, authorities, ocean carriers, inland transportation, 3PLs, shippers, and other actors

12 Introduction 20-Sep PORTS / TERMINAL OPERATORS Provide information about the disposition of shipments within the boundaries of the port / terminal Benefit from pre-built connections to shipping lines and other actors, end-to-end visibility across shipping corridors, and real-time access to more information to enrich port collaboration and improve terminal planning OCEAN CARRIERS Provide information about the disposition of shipments across the ocean leg Benefit from reduced customer service and network integration cost, less revenue leakage, and less mis-declared cargo due to a digital audit trail of end-to-end shipment events and source documents GOVERNMENT AUTHORITIES Provide information about the export and import clearance status for shipments into and out of the country Benefit from more informed risk assessments, better information sharing, less manual paperwork, and easier connections to national single window platforms INLAND TRANSPORTATION Provide information on the disposition of shipments carried on trucks, rail, barges, etc. Benefit from improved planning and utilization of assets (e.g., less queuing) given real-time access to end-to-end supply chain events for shipments SHIPPERS / BENEFICIAL CARGO OWNER Engage with the platform as a consumer of shipping information and means to streamline clearance Benefit from a streamlined and improved supply chain allowing for greater predictability, early notification of issues, full transparency to validate fees and surcharges, and less safety stock inventory FREIGHT FORWARDERS / 3PL Provide the transportation plan, inland transportation events, information on intermodal handoffs, and document filings Benefit from pre-built connections to the ecosystem, improved tools for customs clearance brokerage function, and real-time access to the end to-end supply chain data to improve effectiveness of track-and-trace tools FINANCIAL SERVICES Engage with the platform as a consumer of supply chain information Benefit from access to a definitive, real-time, and immutable source of information for trade finance and trade insurance

13 Introduction 20-Sep CURRENT NETWORK PARTICIPANTS* Ports and Terminals PSA Singapore Patrick Terminals ICTSI Holt Logistics Modern Terminals Houston, Texas Rotterdam, NL Mobile, Alabama Lazaro, Mexico Buenos Aires, Argentina Itajai, Brazil Callao, Peru Gothenburg, Sweden Izmir, Turkey Onne, Nigeria Cotonou, Benin Felixstowe, Great Britain Newcastle upon Tyne, Great Britain Avonmouth, Great Britain Liverpool, Great Britain Teesport, Great Britain Sydney, Australia Melbourne, Australia Brisbane, Australia Freemantle, Australia Singapore, Singapore Hong Kong, SAR China Halifax, Canada Philadelphia, Pennsylvania Apapa, Nigeria Algeciras, Spain Aqaba, Jordan Cartagena, Spain Los Angeles, California Miami, Florida Tangier, Morocco Port Said, Egypt Pecem, Brazil Ocean Carriers Maersk Line Hamburg Süd Pacific International Lines Boluda Lines Government Authorities Australia Home Affairs Dutch Customs Sunat, Peru Customs Saudi Customs Singapore Customs * Selected participants - not all shown; participation in the Early Adopter program varies

14 Introduction 20-Sep THE COLLABORATION MODEL IBM and Maersk have jointly developed the TradeLens platform and will continue to invest in it A collaboration team has been established to lead the initiative and drive industry adoption Maersk has established an operational subsidiary to manage staff assigned to the collaboration; this subsidiary also ensures TradeLens independence from other Maersk business units IBM has assigned dedicated staff from across its Blockchain, Cloud, consulting, and sales units IBM and Maersk jointly own the IP created from the collaboration IBM hosts, operates and supports the platform An Industry Advisory Board will be formed by ecosystem participants to help shape the platform and establish open standards Network Members, including ocean carriers, ports, inland transportation, and country authorities, are invited to participate on terms that give them access to the core platform, in exchange for the data they originate; they may enter into participation agreements with either IBM or Maersk IBM and Maersk independently market, sell and contract TradeLens through their own sales channels Third parties build and deploy applications on and sell services through the TradeLens Application Marketplace Maersk business units including Maersk Line, Hamburg-Sud, APMT, and Damco participate on the same terms as other participants with no special treatment or access to competitor data

15 Platform Details 20-Sep THE BLOCKCHAIN NETWORK TOPOLOGY WILL ENSURE SEGREGATION ACROSS OCEAN CARRIERS Dots designate node participation in a channel TRADELENS TradeLens Node Ocean Carrier 1 Node OCEAN CARRIERS Ocean Carrier 2 Node Ocean Carrier 3 Node Node Other Participant Node OTHER PARTICIPANTS Other Participant Node Other Participant Node TradeLens and participating ocean carriers will each host and manage a Blockchain node; other participants may as well Each node includes the Blockchain platform components as well as dedicated Blockchainmanaged document storage for that node OCEAN CARRIER 1 CHANNEL A channel will be established for each participating ocean carrier OCEAN CARRIER 2 CHANNEL OCEAN CARRIER 3 CHANNEL Sensitive information including documents are distributed only to those nodes participating in a channel; this means that none of a carrier s customer information will be distributed to other carriers CHANNEL Documents are stored on a single node only, and are accessed at runtime by other nodes on a channel as permissions allow Note: platform support for other participants (besides ocean carriers) hosting nodes will be available in 2019

16 Platform Details 20-Sep STANDARDS AND INTEROPERABILITY TradeLens is committed to the promotion and adoption of industry standards and interoperability of platforms Information standardization The shipping industry so far has been lagging in adopting standards for basic concepts like time, place, and identity. We will work closely with our Industry Advisory Board, TradeLens participants, and standards bodies to help the industry coalesce around the use of widely adopted codes and data models. The TradeLens data model and access control scheme will align with the UN/CEFACT model. Interface standards Industry standards around the exchange of information have also been lacking. TradeLens is committed to openness, with all functionality surfaced via non-proprietary, publicly available APIs that are designed specifically for consumability and ease of integration. TradeLens will also increasingly offer standard integrations with ERP, TOS, TMS, and WMS packages. Blockchain interoperability While Blockchain information exchange between ledgers today is generally achieved by integrations using middleware, that will change in the coming years. For example, Hyperledger Quilt, an implementation of the Interledger Protocol allowing for a cross-ledger namespace and transfers of information between ledgers, will be a standard TradeLens will follow. IBM will ensure that the TradeLens platform also follows Blockchain-based standards evolving in the industry.

17 The Way Forward 20-Sep TIMELINE Timeline and capabilities subject to change PRODUCT General Availability release of the TradeLens Platform Improved document sharing and workflow capabilities General Availability release of ClearWay Customizable Alerts + Notifications Dispute Resolution Cognitive Trade Route Analysis AI + Advanced Analytics NETWORK Onboard ports / terminals, ocean carriers and customs authorities participating in the Early Adopter program Expand network of shipping corridors, ocean carriers, and authorities Promote and support placement of additional network member apps built upon the TradeLens platform Reach sufficient scale for full and rapid rollout to Clients CLIENTS Onboard Early Adopter clients and conduct Early Adopter program; provide feedback Continue to go to market and onboard new Clients Continue to go to market and onboard new Clients Begin to transition Clients to GA release

18 Introduction 20-Sep TOGETHER WE CAN MOVE THE INDUSTRY FORWARD Blockchain changes the game Never before could disparate entities securely and confidently process paperwork filings digitally Designed from the ground up as an industry platform shaped by the ecosystem The platform is designed to be open to all industry players; an Industry Advisory Board will be formed to ensure we continuously improve based on ongoing, regular input and feedback We are moving fast We know that speed and scale are critical and building the network is the key to success Strong support from IBM, Maersk, and participants IBM and Maersk, together with the TradeLens participants, have the global reach, executive support, and ability to execute in markets around the world WHY IBM AND MAERSK ARE INVESTING IN THIS PLATFORM Lead rather than react The digital transformation of global shipping, like other industries before it, is going to happen one way or another, and both companies want to lead the way rather than react to that change Grow the pie For Maersk, a more efficient trading ecosystem will drive economic growth, resulting in increased demand for shipping services Accelerate Blockchain adoption IBM believes in and is investing in Blockchain and sees the global supply chain as a significant opportunity to drive more widespread adoption Improve performance As a large network member, Maersk expects to realize significant cost savings and improved customer service by connecting to the platform

19 Platform Details 20-Sep TRADELENS TODAY The TradeLens Platform is available to Early Adopter clients for production usage today. Key features in the Early Adopter version include: REST APIs and User Interfaces for consuming and publishing near realtime, high-fidelity shipping milestones, including over 100 different event types on all steps of the trade life cycle describing both plan and actual events for truck, rail, barge, and ocean carrier moves (data availability subject to network member participation) Document lifecycle seamlessly integrated with cargo movements: document events (subject to network member participation) describing key documentation and compliance milestones (e.g., VGM Submitted, Customs Release) Secure, Blockchain-based data storage with separate channels for major ocean carriers Support for multiple reference number types, including the carrier booking number, shipper's reference number, and more Unified permission model based on international standards; ability to grant other organizations visibility at the shipment level An integration framework for mapping EDI messages to the TradeLens API A beta version of the TradeLens ClearWay product is available for early adopters to test Blockchain-based trade document workflow management in controlled settings Unstructured data (images/scans) support for any document; structured data support (data fields) for Commercial Invoices with additional trade document support in the future 19

20 Platform Details 20-Sep TRADELENS TOMORROW Vision for the Future The TradeLens platform will continue to expand and improve over time. The platform is developed using an Agile methodology, and our roadmaps are subject to change based on market feedback and validated learning without notice TradeLens ClearWay will introduce the ability to build up filings and compliance communications from key source documents, with a Blockchain-based audit trail. This will reduce errors caused by redundant data entry, reducing the cost of compliance and improving the accuracy of cross-organizational communications. AIbased optical character recognition will facilitate this process even when working with less-digital trading partners TradeLens Insights will combine the power of AI, IoT, and Big Data with the richness of the TradeLens platform, facilitating management-by-exception, prediction of disruptions, and mitigation scenario analysis. Allowing enhanced collaboration between ecosystems participants, empowering pre-facto actions that can lead to less delays and unexpected fees 20

21 The Way Forward 20-Sep MORE INFORMATION Maersk and IBM collaboration press release TradeLens Web Site Cross-Border Supply Chain on Blockchain Demo Blockchain application in supply chain news articles Click here (link to Deal Book) Click here (link to Financial Times)

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23 Benefits 20-Sep BENEFITS

24 Benefits 20-Sep BENEFITS TO SHIPPERS / BENEFICIAL CARGO OWNERS PAIN POINTS BENEFITS 1. High administrative costs and process latency in obtaining shipment visibility 1. Eliminates manual processes (checking multiple Track and Trace dashboards, calling/ ing service providers) and delays related to ecosystem data processing 2. Lack of trust regarding the fees on freight invoices, especially surcharges, requires costly, time-consuming and error-prone validation steps 3. Inefficient lane routing leading to delays, increased costs and difficulties in inventory forecasting and planning 4. Reactive/delayed event management after shipment has been missed, causing delays and additional detention and demmurage charges 5. Inefficient trade document exchange between trading partners leading to errors, delays and higher compliance costs 6. Delayed Customs clearance due to security/forgery concerns and validating accuracy of transactions by the regulatory authorities 7. High costs charged by customs brokers and freight forwarders for clearance services 2. Full, trusted visibility on the end-to-end journey of a shipment will enable shippers to efficiently validate fees and surcharges 3. Improved analysis on shipping times / delays on specific lanes leading to changes in routing and/or better root cause identification to address service issues and improve inventory management 4. Identify shipments that are on the verge of rolling (missing Vessel departure). Leading indicators can help Logistics group proactively adjust and/or alert Customer Service 5. Improved efficiency and timeliness in the creation and distribution of documents that routinely get generated and exchanged between trading partners 6. Expedite the customs clearance process by providing document and transactions authenticity and security via digital workflow 7. Simplified process and workflow-driven compliance policies enables shippers to perform the function themselves, potentially at a fraction of the cost 8. High IT costs for integrating with service providers / logistics partners 8. Single, standards-based publish/subscribe interface for obtaining visibility data, eliminates costly maintenance of costly, error-prone point-to-point interfaces with supply chain; reduces service provider switching costs

25 Benefits 20-Sep BENEFITS TO AUTHORITIES PAIN POINTS BENEFITS 1. Unnecessary interventions, or false positives, due to late and missing information 1. More complete information, available earlier and with better provenance, allows for better targeting and more effective decisions about which containers to inspect. BCOs willing to share their data will face less delays due to inspections (i.e. AEOs) 2. Costly, paper-intensive work 2. Reduces manual paperwork and enables greater automation allowing authorities to focus on more critical activities such as targeted risk assessments 3. Lack of visibility into inland transportation hampers critical activities, such as risk assessments 3. Provides greater visibility and transparency into the entire container shipment lifecycle providing authorities with richer information to support and plan for assessment activities 4. Fraud and forgery are major issues 4. Reduces fraud by replacing inspections and preferential duties paper documents with more secure Blockchain-based documents Disincentivizes temptation to mis-declare goods as original shipping documentation is readily available Increases probability of catching bad actors due to a more robust audit trail for documents and event data 5. High effort to integrate ecosystem into multiple platforms 5. Supplements or enables a National Single Window, leveraging an industry standard platform, and decreases the need for connections to multiple platforms 6. Export and import processes can be cumbersome for traders, reducing the appeal of the country as a market for business. 6. Improves trade facilitation as customs authorities can access additional documents when required for control, without adding workload to traders. ClearWay can streamline import and export processes.

26 Benefits 20-Sep BENEFITS TO PORTS AND TERMINAL OPERATORS PAIN POINTS BENEFITS 1. Costly development and support of point-to-point EDI integrations with shipping lines and the port community 1. Simplifies and reduces the cost of connecting to shipping lines and the broader port community by leveraging an industry standard platform participants are already connected to 2. Inaccurate ETA & ETDs of vessels and intermodals leads to poor planning and use of port and terminal assets 3. Fluctuating equipment flows make it difficult for yard density management, leading to operation difficulties including suboptimal stack placement 2. Quick, easy, conversational electronic communications of ETAs for all port community participants improves utilization of port assets 3. Advance communication on aggregated booking volumes and next mode of transport provides better data for stack placement decisions, leading to better truck and vessel service times 4. Lengthy truck and vessel queues and suboptimal asset utilization adversely impact port and terminal operations 4. Accurate and frequently-updated ETAs, improved stack placement, faster service times, and optimization and predictive capabilities lead to shorter queues at the port, reduced environmental impact, and better asset planning and utilization (barges, cranes, etc.). 5. Slow message receival from authorities causes delays and poor planning 5. SIP event data around authority activities will be received more quickly allowing for better yard planning. This is especially the case for ports and terminals not connected directly to the authorities today 6. Highly competitive environment given the rise of global port capacity and increased clout of a more consolidated shipping line industry 6. Drive competitive advantage with cheaper, easier sharing of port data; extend visibility of information across end-to-end shipping corridors; opportunity to more fully exploit investment in port community systems

27 Benefits 20-Sep BENEFITS TO FREIGHT FORWARDERS / 3PL PAIN POINTS BENEFITS 1. Costly manual data collection from different sources and in different formats for population of Track and Trace dashboard 2. Costly development and support of point-to-point integrations with a large network of service providers and logistics partners 3. Too dependent on inland transportation providers for the data to provide visibility to customers 4. Limited insight on the performance and availability of inland transportation providers hampers effective transportation planning 1. Common, end-to-end platform provides a single, standard source for supply chain visibility event data enabling faster and improved customer service 2. Reduces costs through the availability of a centralized information backbone 3. Multiple mechanisms for obtaining inland transport data (API integrations, mobile app, IOT devices) allows for a more value-focused sourcing strategy and provides customers with almost immediate event information in a single platform 4. Historical and current data from all supply chain network members enables transportation planners to more complete information, allowing them to effectively plan logistics leading to improved customer satisfaction 5. High costs and sometimes poor service in providing customs brokerage services 5. Improves competitiveness by reducing the costs of information collection and increasing focus on higher-value services such as compliance 6. Long turnaround times on customs process exceptions 6. Significantly reduces time to correct paperwork errors by connecting source documents with customs filings via secure audit trail 7. Difficulties identifying root causes of shipment exceptions lead to finger pointing 7. Clear audit trail, data provenance and quicker information availability make it easier to avoid problems, but also aids in diagnosing and correcting them when they occur

28 Benefits 20-Sep BENEFITS TO INTERMODAL - TRUCKING PAIN POINTS BENEFITS 1. Long and unpredictable waiting time to pick up or drop off cargo (e.g. long queueing at marine terminal gate for a drayage firm due to gate flow imbalance) 2. Extra dry runs, empty equipment moves, or deadhead miles due to changing conditions or inaccurate info from other ecosystem members such as BCO s, ocean carriers, or terminals, e.g. Marine terminals and carriers direct the return of empty equipment (containers and chassis) to different locations often via an EOD communication, causing delays and inefficiencies 1. Increase asset turn time and revenue by reducing waiting time via a better yard/terminal capacity planning driven by the real-time event sharing (e.g. confirmation of vessel actual time of arrivals) 2. Reduces non-revenue trips by getting up-to-date and consistent data from BCOs, ocean carriers, freight forwarders, and terminals 3. High customer service costs and administration efforts due to manual and complex tracking and reporting activities 3. Common, end-to-end platform provides a single, standard source for supply chain visibility event data 4. Disputes of detention and demurrage and error-prone validation steps 4. Full, trusted visibility on the end-to-end journey of a shipment will decrease inland transportation provider s efforts to validate fees and surcharges and gain shippers trust 5. Difficulties identifying root causes of shipment exceptions lead to finger pointing 5. Clear audit trail and data provenance makes it easier to avoid problems, but also aids in diagnosing and correcting them when they occur

29 Benefits 20-Sep BENEFITS TO INTERMODAL - RAIL PAIN POINTS BENEFITS 1. Documentation and information volume is not only vast but it is shared in a number of different mediums (EDI transactions, s, spreadsheets, physical paper) making it extremely time consuming 1. Easily digestible event information collected from a number of different systems in a variety of different formats 2. Key documents and events are often only made available once the container arrives, increasing delays if there is conflicting or erroneous information within documents 2. Immediately available documentation and event information can raise red flags instantaneously when erroneous information has been shared, decreasing processing time 3. Increased uncertainty among each step of the supply chain makes it difficult to provide adequate visibility and traceability to network members 3. A single platform with complete information shared across the entire network provides visibility to the end-to-end supply chain 4. Border cross-over and customs approval process is often manual and extremely time consuming 4. Digital documentation and approval process reduces the complexity of the process, eliminates easily misplaced physical documents, increases security and reduces time required 5. There is not a single source of the truth, creating disputes among network members 5. Immutable, auditable and immediately available documentation in a single platform increases trust and ease of doing business 6. Customer lacks true end-to-end visibility of the container and information communication is manual and complex 6. A common, end-to-end platform provides a single, standard source for supply chain visibility event data

30 Benefits 20-Sep BENEFITS TO OCEAN CARRIERS PAIN POINTS BENEFITS 1. Time-consuming and expensive integrations limit the connection with supply chain actors e.g. terminals, depots, inland carriers, feeder/barge operators and 3PLs 1. Messages to terminals communicated on a network basis, reducing the cost of integrating and supporting individual terminals, depots and inland carriers, increasing flexibility when it comes to choosing / connecting new providers 2. Carriers do not have full visibility and real time access to end-to-end shipment events 2. Connecting to TradeLens platform, carriers will be able to exchange more complete and granular events real time for the shipments including events directly from shipper, intermodal, customs and 3PLs 3. Carrier deliver different kind of events (equipment, vessel, administrative) to their customers today via different interfaces and channels, handle high volume of customer service calls today for basic inquiries 4. Revenue leakage due to lack of clarity regarding responsibility for Demurrage and Detention or late document/information submission leading to unnecessary waivers or reductions 3. Streamline the delivery of events by using one standardized interface to the platform. No additional integrations with carrier s customers internal systems are necessary. Supporting Carriers e-solution platform allows customers to self-serve for track & trace or subscribing events into in-house system. This will reduce track & track phone calls and burden on customer service agents by 20% or more and focus resource on highervalue services instead 4. Digital audit trail and full visibility of shipment events makes documenting charges easier, simplifies compliance with regulatory audits, and reduces staff time managing disputes which are reduced or eliminated 5. Mis-declared cargo, especially the Dangerous Cargoes 5. Audit trail and immutable records of source documents (packing list, commercial invoice) deter mis-declaration of goods, increasing safety and improving revenue accuracy 6. Hard to predict the bookings no-show, impact carrier vessel utilization and unit cost 6. With shippers and forwarders connecting and sending events to TradeLens, carriers will be able to see activities happening before the empty container pickup and have better estimation on the show-up ratio therefore adjust booking acceptance policy accordingly

31 Benefits 20-Sep BENEFITS TO FINANCIAL INSTITUTIONS PAIN POINTS BENEFITS 1. Information received manually from clients and in non-standardized formats 1. Substantially reduce clerical activity by eliminating re-keying of data by multiple parties and automating data exchanges 2. Delays in validating financing conditions due to data discrepancies in the information received from different stakeholders 2. All parties share the same version of all required information ensuring data consistency. This enables streamlining of business processes. 3. Critical information is sometimes lost and it is difficult to keep a good track record of historical information 3. Information captured on the TradeLens blockchain is immutable and permanently available allowing for better risk analytics and business intelligence 4. Shallow pool of supply chain data limits risk assessment capabilities 4. Access to event data allows for trend analysis across the network enabling the risk assessment process. 5. Paper-based Bills of Lading are costly and inefficient to manage, and vulnerable to bad actors 5. TradeLens is taking advice from the industry on a Blockchain-enabled ebill of Lading solution, reducing the risk of fraud and increasing speed and flexibility for cargo owners

32 The Way Forward 20-Sep THE EARLY ADOPTER PROGRAM

33 The Way Forward 20-Sep A SUCCESSFUL INITIAL BETA PROGRAM HAS PROVIDED KEY FINDINGS AS WE ITERATE THE PLATFORM We have completing an initial Beta program which included multiple ecosystem participants Underpinned the WP23 of the European Commission CORE initiative Some key participants included Dow Chemical, TetraPak, P&G, Damco, Ports of Rotterdam and Houston, Dutch Customs, and U.S. CBP The outcome has directly impacted the product Event Ledger 2.0, with a more generic and comprehensive set of events More robust permissions / authorizations Flexible construction of the transport plan Usability improvements Various improvements in product backlog We are now planning for an Early Adopters program which will address key Beta findings and include more automated corridors Key Findings Initial hypothesis confirmed around inefficiencies are driven by ineffective data sharing marine terminals and customs clearance in particular Solution provides significant value when things do not go according to plan allowing logistics managers to understand and react to disruptions early Strong interest in an immutable, shared audit trail of key shipment events and documents, for use in root cause analyses, e.g., demurrage and detention fees Existing visibility platforms have significant latency and recycle second hand information after-the-fact The network is the product: ports, customs, shipping lines, and inland transportation are key Key pain point relates to documents that currently are not digital inspection certificates, FTA COOs, etc. Flexibility in the transport plan is a must; real-time changes frequent EDI is the root of many problems in the industry; API-based communication is a novel concept to many companies but nonetheless critical Strong interest shown by parties not directly involved in the physical transportation of goods, particularly financial institutions

34 The Way Forward 20-Sep PARTICIPATION IN THE EARLY ADOPTER PROGRAM SHIPPERS / BCO PROGRAM EXPERIENCE Track goods shipped in near real-time for selected corridors end-to-end Electronic sharing of key documents including commercial invoice and packing list via secure Blockchain-based system in selected shipments Provide feedback on effectiveness, improvements, and value KEY REQUIREMENTS Identify major shipping corridors for testing Secure participation of logistics partners, if applicable Integrate internal systems with the platform; provide transport plans PORTS / TERMINAL OPERATORS OCEAN CARRIERS GOVERNMENT AUTHORITIES FREIGHT FORWARDERS INLAND TRANSPORTATION CUSTOMS BROKERS Consume key shipment events provided by other participants to improve planning, forecasting and business development Evaluate the use of the platform as the mechanism for broadcasting port-related shipping milestones, versus point to point integrations Assess viability of connecting to customers/partners via platform Automate the electronic sharing of key documents including the Bill of Lading and Dangerous Goods declaration, for selected shipments Gain experience in and assess impact of running a Blockchain node Utilize shipment events to support better targeting, risk assessments and identification of AEOs for faster clearance Securely manage trade document workflows electronically for selected shipments (in shadow mode) Participate in the management of the Blockchain network Access detailed shipment events to enhance track-and-trace tools Assess viability of connecting to customers/partners via platform Provide feedback on effectiveness, improvements to customer service metrics, and value of faster access to more data Assess viability of connecting to customers/partners via platform, versus point to point integrations Track shipment events and evaluate the impact of early information flow on planning, operations and customer service Utilize ClearWay to facilitate document sharing in support of customs filings for selected shipments (in shadow mode) Provide feedback on effectiveness, improvements, and value Integrate TOS/PCS with solution so that terminal milestones are automatically exchanged, for all shipments into and out of in-scope terminals carried on participating shipping lines Integrate IT systems to the platform so carrier milestones and related trade documents are automatically accessible to respective clients for all shipments operated by the carrier If appropriate, integrate document management systems to the platform Operate a Blockchain node Integrate IT systems to the platform so authority milestones and related trade documents are digitally exchanged Train selected users to utilize Clearway Integrate IT systems to the platform so logistics milestones and related trade documents are automatically exchanged, for all participating shipments; provide transport plans Integrate IT systems to the platform so inland transport milestones are automatically exchanged Train selected users to utilize ClearWay If appropriate, integrate document management systems to the platform

35 The Way Forward 20-Sep EARLY ADOPTER PROGRAM SUMMARY AGREE TO PARTICIPATE AND ESTABLISH THE SCOPE DEVELOP AN ONBOARDING ROADMAP INTEGRATE TO AND ONBOARD ONTO THE PLATFORM GO-LIVE TRADELENS TEAM Introduce TradeLens Review shipping corridors, ocean carriers, commodities, and business processes where TradeLens will be most impactful Facilitate Onboarding workshops on business process, technology integration options, data mapping and document workflows Provide technical and end user documentation Provision access to the platform Support customer s integration project Assist in validating connections to and publishing / subscribing to platform data Configure Clearway workflows Host progress calls Enable the Customer in production Conduct data quality / integrity validation Transition Customer to the service and support team Monitor platform KPIs and value drivers Train the trainer(s) CUSTOMER Identify in-scope commodities, trade documents, and shipping corridors Secure participation of logistics partners, as appropriate Secure Business and IT commitment Map Customer shipping milestones to TradeLens events Develop integration specifications Define trade document workflows and participants Assess impact to business Define user and security requirements Perform integration: connect internal IT system(s) to TradeLens to publish and / or receive information Conduct integration testing Set up users Test Clearway workflows Institute business process / org changes and training as necessary Authorize Customer systems to start sending and receiving information in production Start utilizing the platform Offer feedback on enhancements Monitor platform KPIs and value drivers OUTPUT Scope definition Stakeholders identified and committed Participant agreement signed Onboarding roadmap Integration approach Business impact Successfully completed integration testing Production environment ready for go-live TradeLens platform adoption TIME One two weeks One two weeks Two Four + weeks, depending on integration One two weeks Note: this onboarding process applies to Clients; the onboarding process for Network Members will vary