IBM and global transport and logistics giant Maersk have announced a ‘global trade digitisation solution’ aimed at the cross-border supply chain.
The solution uses blockchain to manage transactions between the complex web of shippers, freight forwarders, ocean carriers, ports and customs authorities that transport goods and materials across the world’s seas.
Based on the Hyperledger Fabric, the system will look to track the paper trail left in the wake of the tens of millions of shipping containers travelling across the globe.
The solution digitises the supply process from end-to-end to enhance transparency and share information securely among trading partners.
90% of goods transported in the global supply chain are transported by ocean shipping and the complexity can be staggering. In 2014 Maersk found that found that a single shipment of goods from East Africa to Europe can go through 30 different organisations and have 200 or more interactions and communications.
“We believe that this new supply chain solution will be a transformative technology with the potential to completely disrupt and change the way global trade is done,” said Bridget van Kralingen, senior vice president, Industry Platforms, IBM.
“We’ve long understood the challenges facing the supply chain and logistics industry and quickly recognized the opportunity for blockchain to potentially provide massive savings when used broadly across the ocean shipping industry ecosystem.”
Tracking each shipment
The key aspects of the solution are improved workflow and better visibility to all parties involved. Another key part of the project is the costs associated with trade documentation processing and administration, currently estimated to be a fifth of total transportation costs.
In a press release, IBM states:
“The solution enables the real-time exchange of original supply chain events and documents through a digital infrastructure, or data pipeline, that connects the participants in a supply chain ecosystem. This promotes sustainable transport by integrating shipping processes and partners, and establishing evaluation frameworks through increased transparency and trusted access.”
Delays associated with documentation errors or misplacing can add extra costs.
“We expect the solutions we are working on will not only reduce the cost of goods for consumers,” said Ibrahim Gokcen, chief digital officer, Maersk, “but also make global trade more accessible to a much larger number of players from both emerging and developed countries.”
The solution is expected to be available across the entire shipping industry ecosystem this year.
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