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Maersk and IBM Joint Blockchain Venture

Maersk and IBM Joint Blockchain Venture

IBM and Maersk introduce TradeLens Blockchain Shipping Solution designed to promote a more secure and efficient global trade, bringing together all the parties involved to support transparency and information sharing, and spur industry-wide collaboration and innovation.

TradeLens is the result of the collaboration announced early this year in Jan 2018, an advancement as more than 94 organisations participate in the Global Trade Solution. The  TradeLens platform has been jointly developed by IBM and Maersk to offer a global trade digitised platform built on open standards and designed for use by the entire global shipping ecosystem.

Today, the cost and size of the world’s trading ecosystems continue to grow in complexity. More than $4 trillion in goods are shipped each year, and the ocean shipping industry carries more than 80 per cent of the products consumers use daily. 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 per cent, boosting economies and creating jobs.

The attributes of blockchain technology are ideally suited to vast networks of disparate partners. A distributed ledger technology (DLT), blockchain establishes a shared, immutable record of all the transactions that take place within the network and enables parties with permission to access to trusted data in real time. By applying the technology to digitise 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 establish a single shared view of a transaction without compromising details, confidentiality, or privacy.

Maersk, the global leader in container logistics, and IBM, the leading provider of blockchain technology, supply chain visibility and interoperability solutions for enterprises, 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, to help companies move and track goods digitally across international borders. Manufacturers, shipping lines, freight forwarders, port and terminal operators and customs authorities can all benefit from these new technologies – as well as ultimately consumers.

As part of the TradeLens early adopter program, IBM and Maersk also announced that 94 organisations are actively involved or have agreed to participate on the TradeLens platform built on open standards. The TradeLens ecosystem currently includes:

1. More than 20 port and terminal operators across the globe, including PSA Singapore, International Container Terminal Services Inc, Patrick Terminals, Modern Terminals in Hong Kong, Port of Halifax, Port of Rotterdam, Port of Bilbao, PortConnect, PortBase, and terminal operators Holt Logistics at the Port of Philadelphia, join the global APM Terminals’ network in piloting the solution. This accounts for approximately 234 marine gateways worldwide that have or will be actively participating on TradeLens. 

2. Pacific International Lines (PIL) have joined Maersk Line and Hamburg Süd as global container carriers participating in the solution.

3. Customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru are participating, along with customs brokers Ransa and Güler & Dinamik.  

4. Participation among beneficial cargo owners (BCOs) has grown to include Torre Blanca / Camposol and Umit Bisiklet.

5. Freight forwarders, transportation and logistics companies including Agility, CEVA Logistics, DAMCO, Kotahi, PLH Trucking Company, Ancotrans and WorldWide Alliance are also currently participating.

Using blockchain Smart Contracts, TradeLens enables digital collaboration and the trade document module, released under a beta program and called ClearWay… It allows importers/exporters, customs brokers, trusted third parties such as Customs, other government agencies and NGOs to collaborate in cross-organizational business processes and information exchanges… all backed by a secure and non-repudiable audit trail.

During the 12-month trial, IBM and Maersk worked with dozens of ecosystem partners to identify opportunities to prevent delays caused by documentation errors, information delays and other impediments. One example demonstrated how TradeLens could reduce the transit time of a shipment of packaging materials to a production line in the United States by 40 per cent, avoiding thousands of dollars in cost. Through better visibility and more efficient means of communicating, some supply chain participants estimate they could reduce the steps taken to answer fundamental operational questions such as “where is my container” from 10 steps and five people to, with TradeLens – one step and one person.

More than 154 million shipping events have been captured on the TradeLens platform, including data such as arrival times of vessels and container “gate-in” and documents such as customs releases, commercial invoices and bills of lading. This data is growing at a rate of close to one million events per day. Traditionally, some of this data can be shared through the EDI systems commonly used in the supply chain industry, but these systems are inflexible, complex, and can’t share data in real-time. Too often, companies must still share documents via email attachment, fax and courier. TradeLens can track critical data about every shipment in a supply chain and offers an immutable record among all parties involved. The TradeLens solution is available today through the Early Adopter Program. TradeLens is expected to be fully commercially available by the end of this year.

To summarize, with this announcement, IBM has only proved that it is a strong believer and a leader in blockchain technology (despite blockchain hype having peaked where only 1% of the executives reported in a survey are deploying the technology in their firms). Blockchain being a tamper-proof database system for keeping track about anything. IBM has around 1600 employees working on many such projects globally and is leading all other technology corporations in its investments. I strongly believe and foresee the breakthrough wave coming in the near future across all industry verticals. 

Check out my additional articles via my BlockDelta profile.

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