Two of the biggest names to proclaim the bright future of blockchain for shipping have formed a joint venture to promote the technology.
A.P. Moller – Maersk and IBM said 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,” the pair said in a release.
For the past year the two companies have been exploring together how to develop blockchain for shipping.
The maximum cost of the required trade documentation to process and administer much of the $4trn shipped each year is estimated to reach one-fifth of the actual physical transportation costs, the pair said in the release.
“The attributes of blockchain technology are ideally suited to large networks of disparate partners. 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 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 noted on Tuesday.
“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,” said Bridget van Kralingen, senior vice president, IBM Global Industries
The joint venture will now enable IBM and Maersk to commercialise and scale their solutions to a broader group of global corporations, many of whom have already expressed interest in the capabilities and are exploring ways to use the new platform, including: General Motors and Procter and Gamble to streamline the complex supply chains they operate; and freight forwarder and logistic company, Agility Logistics, to provide improved customer services including customs clearance brokerage.
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 and PSA International will also use the platform. 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.
Maersk and IBM have named Michael White, former president of Maersk Line in North America, as CEO of the new company.
The new company initially plans to commercialise two core capabilities aimed at digitizing the global supply chain from end-to-end. First, 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. Secondly, paperless trade which will digitise and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries, ultimately helping to reduce the time and cost for clearance and cargo movement.
The new company will be headquartered in the New York metropolitan area.