Maersk, a global leader in container shipping and IBM, a leader in blockchain technology came together to form a joint venture to use Blockchain technology in supply chain.
The aim of the new company will be to offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem. It will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones.
The new company will use blockchain to power the new platform, as well as employ other cloud-based open source technologies including artificial intelligence (AI), IoT and analytics, delivered via IBM Services, in order to help companies move and track goods digitally across international borders.
“The major advances IBM has made in blockchain have shown that the technology can foster new business models and play an important role in how the world works by building smarter businesses,” said Bridget van Kralingen, senior vice president, IBM Global Industries, Solutions and Blockchain. “Our joint venture with Maersk means we can now speed adoption of this exciting technology with the millions of organizations who play vital roles in one of the most complex and important networks in the world, the global supply chain. We believe blockchain will now emerge in this market as the leading way companies seize new untapped economic opportunities.”
“This new company marks a milestone in our strategic efforts to drive the digitization of global trade. The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit,” said Vincent Clerc, chief commercial officer at Maersk and future chairman of the board of the new joint venture. “By joining our knowledge of trade with IBM’s capabilities in blockchain and enterprise technology, we are confident this new company can make a real difference in shaping the future of global trade.”
The platform will be powered by Hyperledger Fabric 1.0, a blockchain framework, which is hosted by the Linux Foundation and IBM Blockchain technology through IBM Cloud.
“Adoption of Hyperledger Fabric by Maersk and its partnership [with] IBM has the potential to remake the shipping sector landscape and its use of information technology,” said Brian Behlendorf, executive director of The Linux Foundation.
The collaboration between two companies started in June 2016 and aim of the partnership was to create new blockchain- and cloud-based technologies. Multiple companies piloted the project including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, U.S. Customs and Border Protection.
Challenges and Capabilities
The cost and size of the world’s trading ecosystems are too complex as more than $4 trillion in goods are shipped each year, and more than 80 percent of the goods consumers use daily are carried by the ocean shipping industry. The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs.
The cost of global trade is estimated at $1.8 trillion annually with potential savings from more efficient process of ~10 percent.
The project has primary capability to address some basic challenges
A shipping information pipeline : Provide end-to-end supply chain visibility that enables all actors involved in a global shipping transaction to securely and seamlessly exchange shipment events in real time.
Paperless trade : Digitize and automate paperwork filings for the import and export of goods by enabling end users to securely submit, stamp and approve documents across national and organizational boundaries.
*The new JV is pending for regulatory approvals.