Maersk will own 51% of the business and former Maersk North America head Michael White will serve as the CEO. The firm plans to work with a network of shippers, freight forwarders, ocean carriers, ports and customs authorities in a bid to save the industry billions of dollars in costs from manual interventions. Maersk and IBM started to collaborate in June 2016.
IBM and A.P. Moeller-Maersk A/S have started a company that will use new technologies such as blockchain, a digital ledger best known for underpinning bitcoin, to track cargo movements and automate paperwork for shipping across global borders. 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. Documentation, which when lost or delayed causes perishable goods lying in wait to spoil, can end up costing as much as a fifth of the total expense of physical transportation.
It will help manage and track tens of millions of shipping containers globally by digitising the supply chain process from end-to-end, the companies said.
The global shipping industry has seen little innovation since the container was invented in the 1950s, and cross-border trade still leaves an enormous trail of paperwork and bureaucracy.
"The big thing that is missing from this industry to digitize and unleash the potential of the technology is really to create a form of utility that brings standards across the entire ecosystem", Maersk's Chief Commercial Officer Vincent Clerc said in an interview.
Over the past 18 months, Denmark-based Maersk has been piloting the blockchain platform with various customers, 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.
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 release. Decision time is here for blockchain, but are enterprises ready? "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".
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. IBM's blockchain is based on the open-source Hyperledger Fabric 1.0 specification created by the Linux Foundation. Smart contract capabilities will also be based on blockchain.
White is expecting the joint Maersk-IBM venture to get regulatory approval in early spring and begin selling software subscriptions by the third quarter of 2018.
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