IBM, Maersk blockchain platform to digitize global trade
The goal of the new venture, say the companies, will be to offer a jointly developed open-standards global trade digitization platform 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 required trade documentation costs to process and administer many of the more than 4$ trillion in goods that are shipped each year is estimated to reach as much as one-fifth of the actual physical transportation costs. By reducing barriers within the international supply chain, the World Economic Forum estimates that global trade could increase by nearly 15%, boosting economies and creating jobs.
A distributed ledger technology like Blockchain, says IBM, is ideally suited to large networks of disparate partners by establishing a shared, immutable record of all the transactions that take place within a network and then enabling permissioned parties access to trusted data in real time. When applied to digitizing global trade processes, a new form of command and consent can be introduced into the flow of information, enabling multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy, or confidentiality.
The new joint venture 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, to help companies move and track goods digitally across international borders. Manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities – and ultimately consumers – can all benefit from these new technologies, say the companies.
“This new company marks a milestone in our strategic efforts to drive the digitization 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 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, 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.”
The new company initially plans to commercialize two core capabilities aimed at digitizing the global supply chain from end-to-end: A shipping information pipeline to provide end-to-end supply chain visibility for all actors involved; and Paperless Trade, which will digitize and automate paperwork filings by enabling end-users to securely submit, validate, and approve documents across organizational boundaries.
IBM and Maersk first began collaborating in 2016 to build new blockchain- and cloud-based technologies. Since then, 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.
The joint venture will now enable the platform to be commercialized and scaled to a broader group of global corporations and organizations. According to the companies, many corporations are already exploring ways to use the new platform, including General Motors, Procter and Gamble, and freight forwarder and logistic company, Agility Logistics. Additional customs and government authorities, say the companies, will explore collaborating with the platform to facilitate trade flows and enhance supply chain security.
Solutions from the joint venture are expected to become available within six months following regulatory clearance. For more, see “Digitizing Global Trade with Maersk and IBM.”
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