IBM has partnered with A.P. Moller-Maersk, the world's largest ocean container shipping company, on a joint venture that aims to use blockchain technology to make worldwide cross-border commerce and shipping more efficient, according to an IBM press release.
IBM stated that at least $4 trillion worth of goods are shipped annually, and that more than 80% of the items consumers use daily are carried by ocean shipping firms like Maersk. It also said global trade could increase as much as 15% — a figure IBM attributed to the World Economic Forum — with the introduction of international supply chain improvements.
The joint venture will use a platform built on IBM Blockchain technology to create a shipping information pipeline, while also encouraging "paperless trade" by digitizing and automating paperwork filings and enabling submission, validation and approval of documents across organizational boundaries.
Retailers and shippers, and many of their respective partners, are salivating at the prospect of ongoing growth in global cross-border commerce and shipping, much of it driven by cross-border e-commerce transactions.
However, executing cross-border transactions and deliveries on a global basis is complicated business — many countries, many currencies and many different companies touching a given shipment at different times. One aspect of that scenario is large container ocean shipping, where Maersk plays.
IBM and Maersk are planning to do something about that with a platform that should be up and running later this year, but they do not plan on bringing the shipping industry into the 21st Century on their own. The platform will have the greatest potential to bring about sector-wide improvements if the partners can convince other companies in the global supply chain and logistics ecosystem to join in, according to a Reuters report on the joint venture's plans.
Of course, there is great reasoning behind why other companies should want to use it. As IBM explained, the new platform would "enable all actors involved in managing a supply chain to securely and seamlessly exchange information about shipment events in real time." Digitizing a complicated, often paper-based chain of events will speed up the process itself and reduce the potential for mistakes.
We first heard about IBM Blockchain last fall when the computing giant worked with partners to apply the technology to cross-border transactions. However, IBM has also worked with Walmart and Kroger on projects to apply the technology to other aspects of the retail supply chain. As it turns out, these projects may have been just the beginning of the company's ambitions for the technology.