Let's get digital

A new joint venture company which Maersk and IBM intend to launch is the first open platform of significant scale for sharing information and developing digital products related to trade.

Lets get digital
It is time to let technology help shape and improve the industry, says Mike White, CEO of the joint venture, pictured.

Two missing customs papers and a late announcement of a rail network change was enough to cause a container headed to the United States from Europe to literally miss the boat—and arrive four weeks late to the customer.

It’s an all too familiar story for the participants in global trade and just one example of many found during the testing phase of new technology developed by Maersk and IBM as a part of a new joint venture company that will offer the first open platform of significant scale for sharing information and developing digital products for trade.

“Supply chain event transparency and physical documentation are just two examples of the areas an open platform like this can improve and subsequently help grow global trade,” says Mike White, CEO of the new joint venture and formerly President of Maersk Line in North America.

“Eventually, we hope the ecosystem of participants will create other applications to help solve additional problems for their customers and partners. Technology has changed almost every aspect of our daily lives, it’s time we let it help us shape and improve our industry.”

Secure, digital exchange

When it launches in 2018 (pending regulatory approval*)the company will connect all the different supply chain participants in one secure, digital platform where they can share and use information but also use that information to develop products for their customers and the industry.

A space for digital innovation. As development work progresses, the scope of the platform will be expanded to include a wide range of digital services and solutions, supporting efficient and safe trade for all players, including:

Manufacturers, retailers, and other traders would benefit from a streamlined and improved supply chain allowing for greater predictability, early notification of issues, and improved inventory management

Shipping lines would benefit from increased visibility to improve the cost and reliability of operations, as well as pre-built connections to customers and partners

Logistics providers such as freight forwarders would be able to offer their customers improved, lower cost services given real-time access to the end–to-end supply chain information and digital tools for customs brokerage services

Customs authorities would get a better view of the flow of goods coming their way, enabling better allocation of resources and improved targeting accuracy for inspections

Ports and terminals would benefit from more efficient operations driven by increased transparency, improved document flows and higher cargo throughput rates

Banks providing digital trade finance products would get increased visibility into key events impacting their financing as well as the digital documentation supporting the transactions

The structure of the joint venture

The joint venture will be owned 51% by Maersk and 49% by IBM with the headquarters located in the New York City area. The CEO will be Mike White, formerly President of Maersk Line in North America.

A Board of Directors will oversee and include members from Maersk and IBM as well others from outside the two companies.

The launch of the joint venture evolved from the Maersk-IBM partnership that began in 2014 with an analysis of the paperwork-related costs of trade impacting global supply chains and the potential for technology to reduce them.

The platform will use IBM’s blockchain technology, based on Hyperledger Fabric from the Linux Foundation, which among other things ensures that platform participants’ information is secure and any transactions involve only relevant parties.

The two initial applications on the platform are the Shipping Information Pipeline and Paperless Trade. Developed by Maersk and IBM, they tackle two of global trade’s most costly and frustrating realities: the lack of event transparency as a shipment moves through the supply chain, and the web of paper-based documentation and processes that complicate every shipment from origin to destination.

Both applications illustrate the value of a more comprehensive, real-time, secure exchange of information and documentation as well as the potential for participants on the platform to create products. 

A series of pilots running since March 2017 involving Maersk customers, ports, customs authorities and many others confirm the two applications abilities to increase efficiency and accuracy of information shared.

Releasing the brakes on trade

“This new company marks a milestone in our strategic efforts to lead the digitisation of global trade. 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,” said Vincent Clerc, Chief Commercial Officer at A.P. Moller - Maersk and future Chairman of the Board of the new joint venture company.

“By joining our deep knowledge of trade with IBM’s leadership in blockchain and enterprise technology, we are confident this new company can make a real difference in shaping the future of global trade.”

* The establishment of the joint venture remains subject to receipt of regulatory approvals. None of the information provided in this article should be construed in any way as a commitment and this information is subject to change and represents goals and objectives only.