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Maersk and IBM launch blockchain joint venture Featured

A.P. Moller-Maersk and IBM have announced a new joint venture that will see the companies collaborate in the development of a blockchain-based global trade digitisation platform, built on open standards and designed for use by the entire shipping ecosystem.

{mprestriction ids="1,2"}The aim of the new venture is to provide more transparency and simplicity in the movement of goods across borders and trading zones through the use of blockchain technologies.

Maersk hopes that the application of blockchain across the supply chain will allow the cost of the required trade documentation needed to process and administer goods transported by sea to be minimised. Currently, using existing processes, those costs can be as high as one-fifth of the actual physical transportation costs, the company says.

The new joint venture will initially focus on two core capabilities aimed at digitalising the global supply chain from end-to-end. The first of these will be built around the establishment of a shipping information pipeline to provide visibility of actions across the supply chain, enabling enable all actors to securely and seamlessly exchange information about shipment events in real time.

Secondly, the platform will look to facilitate paperless trade by digitalising and automating paperwork filings, allowing users to securely submit, validate and approve documents while working in different organisations. Blockchain-based smart contracts will be used to manage approvals, speeding up the process and reducing mistakes.

The partners’ new platform will be built on IBM’s HyperLedger Fabric blockchain platform, and will also incorporate 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.

Ultimately, Maersk says that the goal is to allow manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities to mutually benefit from these new technologies, eventually passing some of those gains on to consumers.

“This new company marks a milestone in our strategic efforts to drive the digitisation 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 proposed chairman of the board for 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.”

IBM and Maersk have already been collaborating since June 2016 on the development of new blockchain and Cloud-based technologies, with their platform having been piloted by a range of different organisations to date, including DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, and US Customs and Border Protection.

The joint venture will allow these systems to be further commercialised and scaled up for a broader group of global corporations, with industrial heavyweights such as General Motors and Procter and Gamble having already expressed an interest in using the technology to streamline their complex supply chains, Maersk says.

Additional customs and government authorities, including Singapore Customs and Peruvian Customs, are expected to shortly begin evaluating the system, while terminal operators APM Terminals and PSA International will also use the platform to improve port collaboration and terminal planning.

Guangdong Inspection and Quarantine Bureau will additionally be supporting the platform by connecting its Global Quality Traceability System for import and export goods, which will link users to trade corridors in and out of China.

“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.

“Our joint venture with Maersk means we can now speed up adoption of this exciting technology with the millions of organisations 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.”

To address the specific needs of the maritime and supply chain industries, Maersk and IBM are establishing an advisory board of industry experts to help further shape the platform and services, and to drive open standards across the supply chain.

Michael J. White, former president of Maersk Line in North America, has been named as CEO of the new joint venture company, which will be headquartered in New York.

He commented: “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 standardising 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.”

The joint venture will be confirmed once regulatory clearance has been granted, which Maersk expects to be completed by the middle of 2018.{/mprestriction}

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