Global shipping giant AP Moller-Maersk and technology firm IBM have joined forces to establish a blockchain-based shipping and supply chain company they say will offer more transparency and simplicity in the trading of goods.
The aim of the new business will be to offer a jointly developed global trade digitisation platform built on open standards and designed for use by the entire global shipping ecosystem. Once established, it should provide more efficient and secure methods for conducting global trade.
Blockchain technology has the potential to transform the way information and transactions are captured, owned, stored and shared among companies and whole ecosystems – and thus radically increase transparency across the supply chain. It is being increasingly adopted by companies in the textile and apparel industry.
More than US$4trn in goods are shipped each year, and more than 80% 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. According to The World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15%, boosting economies and creating jobs.
Maersk and IBM, a provider of blockchain and supply chain visibility solutions, will use blockchain technology 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. These will be designed to help companies move and track goods digitally across international borders.
It is expected that manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities will all benefit from the new technologies – and ultimately consumers.
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By GlobalData“This new company marks a milestone in our strategic efforts to drive the digitisation of global trade,” says Vincent Clerc, chief commercial officer at Maersk and future chairman of the board of the new joint venture. “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. 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 two firms, who began collaborating on building new blockchain and cloud-based technologies in 2016, aim to commercialise and scale their solutions to a broader group of global corporations. This will be in the form of two capabilities: a shipping information pipeline providing end-to-end supply chain visibility; and paperless trade.
“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,” says Bridget van Kralingen, SVP of 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 organisations who play vital roles in one of the most complex and important networks in the world, the global supply chain.”
Michael White, former president of Maersk Line in North America, has been appointed CEO of the new company, and an advisory board of industry experts will be established to help further shape the platform and services, and provide guidance and feedback.
Additional customs and government authorities, including Singapore Customs and Peruvian Customs, are expected to explore collaborating with the platform to facilitate trade flows and enhance supply chain security. The global terminal operators APM Terminals and PSA International will also use the platform to enrich port collaboration and improve terminal planning. With support from Guangdong Inspection and Quarantine Bureau by connecting to its Global Quality Traceability System for import and export goods, the platform can also link users to important trade corridors in and out of China.
Upon regulatory clearance, solutions from the joint venture, which will be headquartered in New York, are expected to become available within six months.
