Maersk and IBM will set up a joint venture to promote the use of blockchain technology for conducting global trade using.
The new blockchain technology company will offer jointly developed trade digitization platform built on open standards – targeting 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 global blockchain technology market is expected to grow at a compound annual growth rate (CAGR) of 42.8 percent, and would be worth USD 13.96 billion by 2022. BFSI, healthcare, energy, media and informatics are adopting blockchain-based technologies.
Michael J. White, former president of Maersk Line in North America, will be the first CEO of the new company.
The new company — headquartered in the New York metropolitan area — initially plans to commercialize two core capabilities aimed at digitizing the global supply chain from end-to-end.
# 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.
# Paperless Trade will digitize and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries, 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.
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.
According to The World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15 percent, boosting economies and creating jobs.
IBM said blockchain technology is suitable for large networks of disparate partners. The new 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 digitize 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 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.
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 digitization of global trade,” said Vincent Clerc, chief commercial officer at Maersk.
IBM’s blockchain platform is enabling hundreds of clients and thousands of 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.
IBM and Maersk began a collaboration in June 2016 to build new blockchain- and cloud-based technologies.
Multiple parties have piloted the platform 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.
General Motors and Procter and Gamble are aiming to streamline their supply chains, by using the new platform.
Freight forwarder and logistic company, Agility Logistics, aims to provide improved customer services including customs clearance brokerage.
Singapore Customs and Peruvian Customs will use the platform to facilitate trade flows and enhance supply chain security.
The global terminal operators APM Terminals and PSA International will use the platform to enrich port collaboration and improve terminal planning.