IBM has announced a joint venture with Danish shipping giant Maersk to use blockchain technology to cut through the red tape of global trade.
The companies said their “global trade digitization platform” is designed for use by the entire global shipping ecosystem, including shippers, ports, customs offices, banks, and other stakeholders in global supply chains.
Maersk will own 51% of the as-yet unnamed company, with IBM owning the remaining 49%. Michael J. White, former president of Maersk Line in North America, has been named its CEO.
“This new company marks a milestone in our strategic efforts to drive the digitization of global trade,” Vincent Clerc, chief commercial officer at Maersk, said in a news release. “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.”
As Reuters reports, “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.”
Paperwork can end up costing as much as a fifth of the total expense of physical transportation and, according to The World Economic Forum, reducing barriers within the international supply chain could increase global trade by nearly 15%.
IBM and Maersk first partnered on a blockchain trial in summer 2016 and have partnered with Dupont, Dow Chemical, Swiss food processor Tetra Pak, and various ports and customs offices to test their platform, which is powered by IBM’s Hyperledger Fabric open-source software.
The platform is designed to provie a single view of all transactions taking place among a complex network of parties and help manage and track tens of millions of shipping containers. According to Coindesk, the companies are hoping to sell their system to competitors.
“This is not a bespoke Maersk system,” White told CoinDesk, adding, “This is going to be an industry-wide, open platform solution for all ecosystem participants.”
Maersk, which handles one in seven containers shipped globally, has also outlined plans to deploy a maritime insurance product using blockchain.