Technology aims to reduce fraud and errors, reduce the time products spend in the transit and shipping process
IBM and Maersk, a global transport and logistics firm, have joined forces to use blockchain technology to manage and track transactions in the cross-border shipping supply chain.
The technology will help manage and track the paper trail of tens of millions of shipping containers across the world by digitising the supply chain process from end-to-end.
Based on the Linux Foundation’s Hyperledger Fabric platform, the blockchain solution developed by the two companies is expected to enhance transparency and promote secure sharing of information among trading partners. When adopted at scale, the solution has the potential to save the industry billions of dollars, IBM claims.
The solution is designed to help reduce fraud and errors, reduce the time products spend in the transit and shipping process, improve inventory management and ultimately reduce waste and cost.
Maersk discovered in 2014 that just a simple shipment of refrigerated goods from East Africa to Europe can go through nearly 30 people and organisations, including more than 200 different interactions and communications among them.
As a global integrator of container logistics with the ambition to digitise global trade, we are excited about this cooperation and its potential to bring substantial efficiency and productivity gains to global supply chains, while decreasing fraud and increasing security,” said Ibrahim Gokcen, chief digital officer, Maersk.
“The projects we are doing with IBM aim at exploring a disruptive technology such as blockchain to solve real customer problems and create new innovative business models for the entire industry. We expect the solutions we are working on will not only reduce the cost of goods for consumers, but also make global trade more accessible to a much larger number of players from both emerging and developed countries.”
Ninety percent of goods in global trade are carried by the ocean shipping industry each year. IBM and Maersk intend to work with a network of shippers, freight forwarders, ocean carriers, ports and customs authorities to build the new global trade digitisation solution, which is expected to go into production later this year.
In order to prove the potential value of a commercial trade digitisation solution, IBM and Maersk have worked with a number of trading partners, government authorities and logistics companies. For example, goods from Schneider Electric were transported on a Maersk Line container vessel from the Port of Rotterdam to the Port of Newark in a pilot with the Customs Administration of the Netherlands under an EU research project.
The US Department of Homeland Security Science and Technology Directorate, and US Customs and Border Protection are also participating in this pilot.
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