Early blockchain tech mover IBM and Danish shipping giant Maersk have announced a joint venture to digitize and enhance global trade efficiency and security using blockchain technology.
One of the world’s oldest industries that has long been notoriously averse to adopt modern technologies is getting a blockchain revamp.
In an announcement yesterday, IBM and A.P Moller – Maersk confirmed their intent to launch a new as-yet-unnamed company that will specifically develop blockchain technology built on open standards ‘designed for use by the entire global shipping ecosystem.’ The new company will be headquartered in New York.
Supply trade chains and logistics are two particular industries ripe for disruption and are certain to instantly benefit from adopting blockchain technology. An immutable, shared ledger with multiple participants including suppliers, shippers, port operators and export/import authorities will help companies continuously track and monitor shipments in real-time. Decades of operational inefficiency due to manual processes and breakages leading to billions in losses could be avoided. The blockchain will enable end-to-end supply chain visibility for all participants with data updated in real-time through a paperless system powered by smart contracts.
Maersk will implement and deploy IBM’s blockchain software – the Hyperledger Fabric – across its fleet, as well as use other cloud technologies in artificial intelligence and IoT to track shipments.
Maersk’s chief commercial officer Vincent Clerc stated:
“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.”
Development of the new joint-company comes amid an ongoing partnership between IBM and Maersk that began in early 2017. The blockchain, which includes a network of freight forwarders, ocean carriers and ports, will support a supply chain that set out to track 10 million containers by the end of the year. IBM estimates annual savings of approximately $38 billion among shipping carriers digitizing their processes using blockchain technology.
The endeavor has proved successful, creating solutions in pilots tested by the likes of Netherlands’ customs authority, the US Customs and Borders Protection, the Singaporean and Peruvian customs authorities as well as industry giants like General Motors and Procter and Gamble for supply chain management.
Awaiting the regulator’s green light, real-world implementation of the joint venture’s solutions are ‘expected to be available within six months,’ IBM added.