TRADELENS OVERVIEW 2-OCT-18 2 TradeLens Overview Introduction - - PowerPoint PPT Presentation

TRADELENS OVERVIEW

2-OCT-18

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⦿ 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

IBM AND MAERSK HAVE LAUNCHED TRADELENS

An open and neutral supply chain platform poised to transform the industry

TradeLens Overview Introduction

GLOBAL TRADE IS HIGHLY INEFFICIENT AND BURDENED BY PAPER-BASED PROCESSES

TradeLens Overview Introduction

⦿Data trapped in organizational silos ⦿Disparate perspectives on transaction state ⦿Manual and time-consuming processes

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⦿Clearance processes subject to fraud

Inland Transportation Shippers / Beneficial Cargo Owners Trade Associations Custom Brokers Freight Forwarders Port Community Systems; Terminal Operating Systems Ocean Carriers Custom Systems Supply Chain Visibility Systems Ports and Terminals Supply Chain / Transportation Management Systems Authorities

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A FEW EXAMPLES FROM OUR PILOT ILLUSTRATE THESE INEFFICIENCIES

TradeLens Overview Introduction

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

⦿ Missing customs documents prevented gate-in at time of arrival ⦿ Pre-announcement to Terminal was not updated in time. Containers arrived

• n 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 ⦿ Limited visibility over transport plan issues meant inland providers were unable to carry cargo on the expected date

A single shipment of avocados from Mombasa to Rotterdam involves 30 actors, 100+ people, and 200 information exchanges

⦿ Inconsistent information across

• rganizational 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 ⦿ 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

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 Data are siloed Business processes are manual and intensive Supply chain partners spend too much time chasing information

KEY TAKEAWAYS

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TradeLens Overview Introduction

BCO / NVO FFW / CHB / 3PL Inland Transportation Customs / Government Authorities Ports / Terminals Ocean Carriers FFW / CHB / 3PL Inland Transportation BCO / NVO Ports / Terminals Customs / Government Authorities

SHIPPING MILESTONES AND SHIPMENT DATA STRUCTURED AND UNSTRUCTURED DOCUMENTS TRADELENS BLOCKCHAIN BUSINESS NETWORK TRADELENS PLATFORM

Start container tracking Container tracking ended Empty container picked up from depot ETA empty container at stuffing site ATA Empty container at stuffing site Container stuffing completed at inland location VGM submitted Packed container loaded 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 ATA empty container at depot 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 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 Commercial Invoice Customs Clearance Import Documentation

THE PLATFORM IS AN OPEN AND NEUTRAL INDUSTRI SOLUTION - UNDERPINNED BY BLOCKCHAIN TECHNOLOGY

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TRADELENS INFORMATION FLOW

TradeLens Overview Platform Details

ORIGIN INTERMODAL EXPORT COMPLIANCE ORIGIN PORT OCEAN TRANSPORT DESTINATION PORT DESTINATION INTERMODAL SHIPMENT PLANNING IMPORT COMPLIANCE

Event Source Start Shipment Tracking Shipper, 3PL Add Shipment Reference Shipper, 3PL Start Container Transport tracking Carrier Add Container Tracking Reference Carrier Add Container to Shipment Carrier Update Physical Container ID Carrier Booking Request Submitted Shipper, 3PL Booking Request Confirmed Carrier Shipper Updated Shipper, 3PL Consignee Updated Shipper, 3PL Cargo Type Updated Shipper, 3PL Shipping Instructions Submitted Shipper, 3PL Packed Container Interchanged Carrier, 3PL End Container Tracking Carrier Event Source Packed container sealed Shipper Packing list available Shipper, 3PL Estimated Loading

• n Truck

Carrier, Shipper, 3PL Loaded on Truck Carrier, Trucker, 3PL Estimated Gate In 3PL, Trucker, Terminal Gate In 3PL, Trucker, Terminal Estimated Discharge from Truck 3PL, Trucker, Terminal Discharge from Truck 3PL, Trucker, Terminal Estimated Stuffing Start 3PL, Shipper Stuffing Started 3PL, Shipper Estimated Stuffing Completed 3PL, Shipper Container Stuffed 3PL, Shipper Estimated Loading

• n Rail / Barge

3PL, Rail Loaded on Rail / Barge Rail, Barge Rail / Barge ETD 3PL, Rail, Barge Rail / Barge ATD Rail, Barge Estimated Discharge from Rail / Barge Rail, Barge Actual Discharge from Rail / Barge Rail, Barge Event Source Export documentation submitted Customs broker Export documentation approved Customs Customs release Customs Dangerous Goods declaration submitted Shipper Dangerous Goods request approved Carrier VGM submitted Shipper, 3PL Geography specific certificate submitted 3PL Geography specific certificate approved Customs Event Source Estimated Discharge from Vessel Terminal Discharged from Vessel Terminal Packed container not selected for inspection Customs Packed container passed inspection Customs Packed container selected for scan Customs Estimated Loading

• n Truck

Terminal Loaded on Truck Terminal, Trucker, 3PL Estimated Gate Out Terminal, Trucker, 3PL Gate Out Terminal, Trucker, 3PL Estimated Loading

• n Rail / Barge

Terminal, Rail, Barge, 3PL Loaded on Rail / Barge Terminal, Rail, Barge Rail / Barge ETD Terminal, Rail, Barge, 3PL Rail / Barge ATD Terminal, Rail, Barge Terminal release Terminal Carrier release Carrier Event Source Estimated Loading on Truck Terminal, 3PL, Trucker Loaded on Truck Terminal, 3PL, Trucker Estimated Gate Out Terminal, Trucker, 3PL Gate Out Terminal, Trucker, 3PL Estimated Gate In Terminal, 3PL, Trucker Gate In Terminal, 3PL, Trucker Estimated Discharge from Truck 3PL, Trucker, Terminal Discharge from Truck 3PL, Trucker, Terminal Loaded on Rail / Barge Rail, Barge Rail / Barge ETD 3PL, Rail, Barge Rail / Barge ATD Rail, Barge Rail / Barge ETA 3PL, Rail, Barge Rail / Barge ATA 3PL, Rail, Barge Estimated Discharge from Rail / Barge Rail, Barge Actual Discharge from Rail / Barge Rail, Barge End Shipment Tracking Shipper, 3PL Seal(s) removed Shipper, 3PL Container stripped Shipper, 3PL Event Source Estimated Gate In Terminal, 3PL, Trucker Gate In 3PL, Trucker, Terminal Estimated Discharge from Truck 3PL, Trucker, Terminal Discharge from Truck 3PL, Trucker, Terminal Rail / Barge ETA 3PL, Rail, Barge Rail / Barge ATA Rail, Barge, Terminal Estimated Discharge from Rail / Barge Rail, Barge, Terminal Actual Discharge from Rail / Barge Rail, Barge, Terminal Estimated Loading on Vessel Terminal Do not load Carrier Loaded on Vessel Terminal Event Source Advance declaration submitted Carrier Advance declaration approved Customs Import documentation submitted 3PL Import documentation approved Customs Customs release Customs Certificate of origin available 3PL Cargo specific certificate submitted 3PL Cargo specific certificate approved Customs Event Source Vessel ETD Terminal, Carrier Vessel ATD Terminal, Carrier Vessel ETA Terminal, Carrier Vessel ATA Terminal, Carrier Estimated Loading on Vessel Terminal, Carrier Loaded on Vessel Terminal, Carrier Bill of Lading availableCarrier Estimated Discharge from Vessel Terminal, Carrier Discharged from Vessel Terminal, Carrier Shift-cell Terminal Shift-pier Terminal

THE TRADELENS ECOSYSTEM

TradeLens Overview Introduction

Primary consumers and beneficiaries of the platform ⦿Shippers (BCOs, retailers, manufacturers, etc.) ⦿Freight forwarders, customs brokers, 3PLs ⦿Financial institutions

TRADELENS PLATFORM

Clients Applications Marketplace Network Members Provide and gain access to end-to- end supply chain information ⦿Ocean carriers ⦿Ports and terminals ⦿Government authorities ⦿Inland transportation ⦿3rd party data providers Offer value added services to the ecosystem through a platform marketplace ⦿TradeLens offerings ⦿Offerings from Network Members and Clients ⦿Offerings from third parties

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CURRENT NETWORK PARTICIPANTS*

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TradeLens Overview Introduction

• 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

Ports and Terminals

Australia Home Affairs

Dutch Customs

Sunat, Peru Customs

Saudi Customs

Singapore Customs Government Authorities * Selected participants - not all shown; participation in the Early Adopter program varies

Maersk Line

Hamburg Süd

Pacific International Lines

Boluda Lines Ocean Carriers

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TradeLens Overview Introduction

PORTS / TERMINAL OPERATORS OCEAN CARRIERS GOVERNMENT AUTHORITIES INLAND TRANSPORTATION FREIGHT FORWARDERS / 3PL SHIPPERS / BENEFICIAL CARGO OWNER FINANCIAL SERVICES 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 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 Benefit from more informed risk assessments, better information sharing, less manual paperwork, and easier connections to national single window platforms 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 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 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 Benefit from access to a definitive, real-time, and immutable source of information for trade finance and trade insurance

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BENEFITS TO SHIPPERS / BENEFICIAL CARGO OWNERS

TradeLens Overview Benefits

PAIN POINTS

1. High administrative costs and process latency in obtaining shipment visibility 1. Eliminates manual processes (checking multiple Track and Trace dashboards, calling/emailing 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 2. Full, trusted visibility on the end-to-end journey of a shipment will enable shippers to efficiently validate fees and surcharges 3. Inefficient lane routing leading to delays, increased costs and difficulties in inventory forecasting and planning 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. Reactive/delayed event management after shipment has been missed, causing delays and additional detention and demmurage charges 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. Inefficient trade document exchange between trading partners leading to errors, delays and higher compliance costs 5. Improved efficiency and timeliness in the creation and distribution of documents that routinely get generated and exchanged between trading partners 6. Delayed Customs clearance due to security/forgery concerns and validating accuracy

• f transactions by the regulatory authorities

6. Expedite the customs clearance process by providing document and transactions authenticity and security via digital workflow 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

BENEFITS

7. High costs charged by customs brokers and freight forwarders for clearance services 7. Simplified process and workflow-driven compliance policies enables shippers to perform the function themselves, potentially at a fraction of the cost

TIMELINE

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2018 2019 2020

TradeLens Overview The Way Forward

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,

• cean 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 ⦿ Begin to transition Clients to GA release ⦿ Continue to go to market and onboard new Clients ⦿ Continue to go to market and onboard new Clients

PLATFORM DETAILS

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TradeLens Overview Platform Details

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 pre- programmed 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

• nly 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

• nly be changed if

endorsed by the parties taking part in the shipment; full audit history maintained on the Blockchain

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TRADELENS AND BLOCKCHAIN

Blockchain addresses the underlying challenges inherent in collaborating across a distributed, fragmented supply chain ecosystem

TradeLens Overview Introduction

SHARED LEDGER SMART CONTRACT PRIVACY TRUST

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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.

STANDARDS AND INTEROPERABILITY

TradeLens Overview Platform Details

TradeLens is committed to the promotion and adoption

• f industry standards and interoperability of platforms

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THE BLOCKCHAIN NETWORK TOPOLOGY WILL ENSURE SEGREGATION ACROSS OCEAN CARRIERS

TradeLens Overview Platform Details

⦿ 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 Blockchain- managed document storage for that node ⦿ A channel will be established for each participating ocean carrier ⦿ 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 ⦿ Documents are stored on a single node only, and are accessed at runtime by other nodes on a channel as permissions allow

Dots designate node participation in a channel

TRADELENS TradeLens Node OCEAN CARRIERS Ocean Carrier 1 Node Ocean Carrier 2 Node Ocean Carrier 3 Node … Node OTHER PARTICIPANTS Other Participant Node Other Participant Node Other Participant Node

OCEAN CARRIER 1 CHANNEL OCEAN CARRIER 2 CHANNEL OCEAN CARRIER 3 CHANNEL …CHANNEL

Note: platform support for other participants (besides ocean carriers) hosting nodes will be available in 2019

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MORE INFORMATION

TradeLens Overview The Way Forward

Maersk and IBM collaboration press release https://link.tradelens.com/ibmne681df TradeLens Web Site www.TradeLens.com Cross-Border Supply Chain on Blockchain Demo https://link.tradelens.com/CrossBorder Blockchain application in supply chain news articles Click here (link to Deal Book) Click here (link to Financial Times)

THANK YOU

Jeppe Kobberø Senior Product Manager jeppe.kobbero@maersk.com

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