The world's largest container shipping firm A.P. Moller-Maersk is teaming up with IBM to create a trading platform it says can speed up trade and save billions of dollars.
The two companies today announced their intent to establish a joint venture to provide more efficient and secure methods for conducting global trade using blockchain technology.
The aim of the new company 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.
The cost and size of the world's trading ecosystems continues to grow in complexity. The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs. According to The World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15 percent, boosting economies and creating jobs.
A distributed ledger technology, blockchain 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. "By applying the technology to digitize global trade processes, a new form of command and consent can be introduced into the flow of information, empowering multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy or confidentiality," IBM says.
Maersk and IBM will use blockchain technology to power the new platform, as well as employ 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.
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.
The new company initially plans to commercialize two core capabilities aimed at digitizing the global supply chain from end-to-end:
- A shipping information pipeline will provide end-to-end supply chain visibility to enable all actors involved in managing a supply chain to securely exchange information about shipment events in real time.
- Paperless Trade will digitize and automate paperwork filings by enabling end-users to securely submit, validate and approve documents across organizational boundaries, ultimately helping to reduce the time and cost for clearance and cargo movement. Blockchain-based smart contracts ensure all required approvals are in place, helping speed up approvals and reducing mistakes.
Upon regulatory clearance, solutions from the joint venture are expected to become available within six months.
The new company will be headquartered in the New York metropolitan area.