IBM and Danish transport conglomerate Maersk announced today they are launching a joint venture to redefine the global shipping industry for the blockchain age. The new company, which hasn’t yet been named, will focus on simplifying the complex process of moving goods across different trade zones.
The company initially plans to market two capabilities built on IBM Blockchain: a shipping information pipeline that provides a real-time, transparent view of merchandise movement, and smart contracts to replace what is today a slow and paperwork-heavy process.
“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. 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,” Maersk said in a press release.
Assuming the new company is able to get regulatory clearance for its offerings, they should be available within six months, according to the release. The company will be headquartered in New York City.
Maersk and IBM have been working on the platform since June 2016. Companies that have piloted the solution include DuPont, Dow Chemical, Tetra Pak, Port Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, and U.S. Customs and Border Protection.
“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,” said Michael J. White, former president of Maersk Line in North America and CEO of the new company. “Now this work has progressed to a point that a beta version involving all players of the ecosystem along a specific trade lane can be launched. That is why we intend to create the joint venture — to take these solutions to market.”
Procter & Gamble, Agility Logistics, the Peruvian customs agency, global terminal operator APM Terminals, and the Guangdong Inspection, and Quarantine Bureau are a few of the companies and agencies planning to explore the technology, according to the press release.
Maersk and IBM will also be assembling industry experts for an advisory board to guide further development of the platform and open standards.