Maersk partners IBM to digitalise the supply chain process

3/14/2017

Maersk is joining hands with IBM to use block chain technology to digitalise paperwork related to the global supply chain process to improve efficiency and optimise costs.

The so-called block chain solution will allow Maersk and IBM to manage and monitor the documentation of containers shipped across the globe from one end of the supply chain to the other and share this data with trading partners.

Maersk expects the solution to help save the container shipping sector billions of dollars when it is adopted at scale.

In detail, the solution will reduce incidents of fraud and error, cut the amount of time products spend in transit and shipping and enhance inventory management.

The solution will allow each player in the supply chain to track the location of the container in transit and view customs documents, bills of lading and other information in real time.

Security features will ensure that no individual will be able to alter, destroy or make additions to the records without the consent of the others in the supply chain network.

Both parties have collaborated with product shippers, government and customs officials and other logistics firms to test the solution.

The container shipping giant noted that in 2014, a cargo of refrigerated goods being transported to Europe from East Africa could pass through around 30 persons and organisations, including over 200 separate interactions and communications before reaching the intended destination.

Costs related to trade documentation processing and administration are estimated to be roughly one fifth of actual physical transportation costs.

"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," said IBM.

Both parties jointly developed the solution based on the Linux Foundation's open source Hyperledger Fabric and will be available to a number of parties in the ocean shipping industry later in 2017.

The solution will be hosted on IBM Cloud and IBM's high security business network, and can be delivered via IBM Bluemix.

"The projects we are doing with IBM aim at exploring a disruptive technology such as block chain to solve real customer problems and create new innovative business models for the entire industry," said Maersk chief digital officer Ibrahim Gokcen.

"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."

During the TPM2017 conference in Long Beach last week, Maersk Line chief commercial officer Vincent Clerc said the shipping line was exploring the possibility of building an end-to-end global trade network where each and every interaction can be digitalised, based in part on block chain technology, the system of using a shared transaction database.

In March last year, US-based broadband and telecommunications company Verizon's Risk Team cybersecurity unit discovered that criminals had uploaded a malicious web shell to compromise a global shipping conglomerate's server and content management system, allowing them to access passwords to download bills of lading for shipments and target crates that had high-value content inside, as well as identifying the ships scheduled to transport these cargoes.

The conglomerate subsequently saw its vessels attacked by pirates who seemed to know which containers held high-value items.