TRANSPORT and logistics company Maersk and technology company IBM announced in January their intent to establish a joint venture (JV) to provide more efficient and secure methods for conducting global trade using blockchain technology.
The aim of the new company 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. It will address the need to provide more transparency and simplicity in the movement of goods across borders and trading zones.
As the cost and size of the world’s trading ecosystems continues to grow in complexity, the attributes of blockchain technology are ideally suited to large networks of disparate partners, the companies said. A distributed ledger technology, blockchain establishes a shared, immutable record of all the transactions that take place within a network and then enables permissioned parties access to trusted data in real time. By applying the technology to digitise global trade processes, a new form of command and consent can be introduced into the flow of information, empowering multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy or confidentiality.
Maersk and IBM will use blockchain technology to power the new platform, as well as employ other cloud-based open source technologies including artificial intelligence (AI), Internet of Things (IoT) and analytics, delivered via IBM Services, to help companies move and track goods digitally across international borders. Manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities can all benefit from these new technologies — and ultimately consumers.
“This new company marks a milestone in our strategic efforts to drive the digitisation 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 JV. “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.”
IBM said its blockchain platform currently enables its clients and developers to build and scale active networks across complex use cases, including cross-border payments, supply chains and digital identification.
“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 organisations 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.”
IBM and Maersk began a collaboration in June 2016 to build new blockchain- and cloud-based technologies. The JV will now enable both parties to commercialise and scale their solutions to a broader group of global corporations.
Additional customs and government authorities, including Singapore Customs and Peruvian Customs, will explore collaborating with the platform to facilitate trade flows and enhance supply chain security. The global terminal operators APM Terminals, headquartered in the Netherlands, and PSA International in Singapore will use the platform to enrich port collaboration and improve terminal planning. With support from China’s 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 the country.
Former president of Maersk Line in North America Michael J. White, who has been named as CEO of the new company, commented: “Today, a vast amount of resources is wasted due to inefficient and error-prone manual processes. The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardising information flows using digital solutions. Our ambition is to apply these learnings to establish a fully open platform whereby all players in the global supply chain can participate and extract significant value.”
The new company, which will be headquartered in the New York metropolitan area, initially plans to commercialise two core capabilities aimed at digitising the global supply chain from end to end. For example, a shipping information pipeline will provide end-to-end supply chain visibility to enable all actors involved in managing a supply chain to securely and seamlessly exchange information about shipment events in real time.
Plus, a Paperless Trade will digitise and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organisational boundaries, ultimately helping to reduce the time and cost for clearance and cargo movement. Blockchain-based smart contracts ensure all required approvals are in place, helping speed up approvals and reducing mistakes.
Upon regulatory clearance, solutions from the JV are expected to become available within six months.