Two giants look to disrupt shipping – an industry still working with paper.
Shipping – the backbone of global trade and an industry stubborn in its insistence to resist change and persist in antiquated, costly and inefficient processes.
It is an industry ripe for disruption, a fact which has not escaped the notice of two giants in their respective fields. Combining technological expertise and logistics prowess, IBM and Maersk have established a first-of-its-kind joint venture to digitally transform the global supply chain.
The new company will look to offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem.
The key goals in this venture are efficiency, security, transparency and simplicity – which is why the two giants are driving the initiative with blockchain technology at the forefront.
The challenge ahead, however, is considerable for IBM and Maeserk – 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. However, the two companies are betting that blockchain is ideally suited to revolutionise the shipping industry.
Indeed, blockchain is suited to large networks of disparate partners. Furthermore, the distributed ledger underpinning the technology 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.
What is hoped is that by applying the technology to digitize global trade processes, a new form of command and consent can be introduced into the flow of information. This will empower multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy or confidentiality.
Delivered via IBM Services, Maersk will use blockhain to power the new platform, as well as employ other cloud-based open source technologies including AI, IoT and analytics.
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. 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 joint venture.
“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 joint venture was borne from a successful pilot the two companies embarked upon over more than 18 months. Companies such as Dow, DuPont, the Port Houston and Port of Rotterdam successfully completed the pilot, making way for the joint venture between the two companies.
Through the joint venture, IBM and Maersk aim to commercialize and scale their solutions to a broader group of global corporations. General Motors and Proctor and Gamble, for example, are already looking at how the platform can streamline the complex supply chains they operate.
To address the specific needs of the industry, Maersk and IBM are establishing an advisory board of industry experts to help further shape the platform and services, provide guidance and feedback on important industry factors, and drive open standards.
Heading up the new company, new CEO Michael J. White, former president of Maersk Line in North America, said:
“Today, a vast amount of resources are 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 standardizing 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. We look forward to further expanding our ecosystem of partners as we progress toward a global solution.”
Upon regulatory clearance, solutions from the joint venture are expected to become available within six months.