A.P. Moller-Maersk and IBM are to establish a joint venture to provide more efficient and secure methods for conducting global trade using blockchain technology.
According to Maersk, the aim of the new company, which will be headquartered in the New York metropolitan area, will be to offer a jointly developed global trade digitization 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.
“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 of 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.”
Blockchain technology involves 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 using it to digitize global trade processes, a new form of command and consent can be introduced into the flow of information which empowers multiple partners to collaborate and establishes a single shared view of a transaction without compromising details, privacy or confidentiality.
The new company will initially commercialize two core capabilities aimed at digitizing the global supply chain from end-to-end: a shipping information pipeline which will provide end-to-end supply chain visibility; and the adoption of paperless trade, which will digitize and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries.
Upon regulatory clearance, solutions from the joint venture are expected to become available within six months.
Maersk and IBM will also use other cloud-based open-source technologies, including artificial intelligence, Internet of Things and analytics, delivered via IBM Services.
IBM’s blockchain platform enables hundreds of clients and thousands of developers to build and scale active networks across complex use cases, including cross-border payments, supply chains and digital identification.
“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.”
Maersk and IBM began collaborating in June 2016 to build new blockchain- and cloud-based technologies. Since then, multiple parties have piloted the platform 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 enable the two companies to commercialize and scale their solutions to a broader group of global corporations who have expressed interest in the capabilities, including General Motors, Procter and Gamble and Agility Logistics.
Other 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 use the platform to enrich port collaboration and improve terminal planning. 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 will establish an advisory board of industry experts to address the specific needs of the industry and help further shape the platform. They will provide guidance and feedback on important industry factors and drive open standards.
Maersk and IBM have appointed Michael J. White, former president of Maersk Line in North America, as CEO of the new company.
“Today, a vast amount of resources are wasted due to inefficient and error-prone manual processes,” he said. “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.”
