Maersk is to use blockchain technology solution developed with IBM to help manage the paper trail of millions of shipping containers across the world.
Each participant in a supply chain can view the progress of goods through the supply chain, understanding where a container is in transit. They can also see the status of customs documents, or view bills of lading and other data. No one party can modify, delete or even append any record without the consensus from others on the network.
The blockchain solution based on the Hyperledger Fabric and built by IBM and Maersk will be made available to the shipping and logistics industry. The solution will help manage and track the paper trail of tens of millions of shipping containers across the world by digitizing the supply chain process.
The partners reckon that when adopted at scale, the blockchain solution has the potential to save the industry billions of dollars.
Maersk found in 2014 that a simple shipment of refrigerated goods from East Africa to Europe can go through nearly 30 people and organisation, including more than 200 different interactions and communications among them.
“As a global integrator of container logistics with the ambition to digitise global trade, we are excited about this cooperation and its potential to bring substantial efficiency and productivity gains to global supply chains, while decreasing fraud and increasing security,” said Ibrahim Gokcen, chief digital officer, Maersk.
“The projects we are doing with IBM aim at exploring a disruptive technology such as blockchain to solve real customer problems and create new innovative business models for the entire industry. We expect the solutions we are working on will not only reduce the cost of goods for consumers, but also make global trade more accessible to a much larger number of players from both emerging and developed countries.”
The costs associated with trade documentation processing and administration are estimated to be up to one-fifth the actual physical transport costs. A single vessel can carry thousands of shipments, and on top of the costs to move the paperwork, the documentation to support it can be delayed, lost or misplaced, leading to further complications.
For shippers, the planned solution can help reduce trade documentation and processing costs and help eliminate delays associated with errors in the physical movement of paperwork. It will also provide visibility of the container as it advances through the supply chain. For customs authorities, the solution is intended to give real time visibility, significantly improving the information available for risk analysis and targeting, which may eventually lead to increased safety and security as well as greater efficiency in border inspection clearance procedures.
The solution developed by Maersk and IBM is based on the open source Linux Foundation’s open source Hyperledger Fabric. The solution is expected to be widely available to support multiple parties across the ocean shipping industry ecosystem later this year. IBM hosts the solution on the IBM Cloud and the IBM high-security business network, delivered via IBM Bluemix.