IBM and the integrated transport and logistics company Maersk, a global leader in container shipping, intend to establish a joint venture to provide efficient and secure solutions for conducting global trade using distributed ledger technology (DLT).
The two companies plan to develop a global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem, and to form a new company dedicated to the platform.
The initiative was announced in a joint press release published by both IBM and Maersk . The new global trade platform will leverage DLT to improve the cost of transportation, lack of visibility and inefficiencies in paper-based processes.
"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 of 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."
According to data provided by the two companies, 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. Modern DLT-based digital solutions could significantly reduce the cost of the required trade documentation, which is estimated to reach one-fifth of the actual physical transportation costs.
"This new company marks a milestone in our strategic efforts to drive the digitization of global trade," said Vincent Clerc, chief commercial officer at Maersk and future chairman of the board for 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."
IBM and Maersk have been collaborating since 2016, jointly developing solutions built on IBM's DLT, which is provided through the IBM Cloud and powered by the Hyperledger Fabric framework. High-profile companies, including General Motors and Procter & Gamble, are exploring ways to use the new platform to streamline their complex supply chains.
The new company will initially focus on commercializing a shipping information pipeline for the exchange of information about shipment events in real-time and a paperless trade solution to digitize and automate all paperwork filings. This could help ensure that all required approvals are in place via DLT-based smart contracts.
Michael J. White, former president of Maersk Line in North America, will be CEO of the new company, headquartered in the New York metropolitan area, which is expected to become fully operational within six months.
"Today, a vast amount of resources are wasted due to inefficient and error-prone manual processes," said White. "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."