IBM and Maersk plan joint blockchain venture for global shipping
The world's largest shipping company is embracing the blockchain and "shaping the future of global trade."
IBM and A.P. Moller–Maersk Group, the world's largest container ship and supply vessel operator, have announced a joint venture into blockchain technology. The new company will aim to revolutionise the entire global shipping system.
"The aim of the new company will be to offer a jointly developed global trade digitization platform built on open standards and designed for use by the entire global shipping ecosystem," says the IBM statement.
"By applying the technology to digitize global trade processes, a new form of command and consent can be introduced into the flow of information, empowering multiple trading partners to collaborate and establishing a single shared view of a transaction without compromising details, privacy or confidentiality." Sending a cargo container around the world can involve hundreds of pieces of paperwork, and input from port authorities, governments, logistics providers and everyone else on the way. This information is often stored as paper, separated by location and organisation, and without any kind of management system. It's slow, non-digital, subject to human error and riddled with points of failure en route. It's exceptionally difficult to effectively analyse, track and manage the entire supply chain under this system. This is one of the factors that makes smuggling, counterfeiting and theft of goods in transit relatively common. Using the blockchain lets all parties use the same decentralised and tamper-proof ledger to digitise their systems and solve these problems. You can watch the video below for a more in-depth explanation from IBM.How it works
A match made in heaven?
The shipping industry might be a near-perfect fit for blockchain technology. It's a global, interconnected and extremely complex network that's always in motion, operated by hundreds of disparate partners. It's also constantly growing, and constantly getting more complex.
"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, Maersk chief commercial officer at Maersk and future chairman of the board of the joint venture.
An open source decentralised ledger utilising IBM cloud computing will serve as the core of the system. IBM aims to improve its functionality with artificial intelligence, internet of things connections and analytics systems.
The implications
According to the World Trade Organisation, simplifying and streamlining global shipping supply chains could increase worldwide GDP by 5%, and total trade volume by 15%.
With enough uptake, this joint venture might be one of the most significant real world applications of blockchain technology to date. More than $4 trillion of goods are shipped each year, and the vast majority of all consumer goods will travel by ship at some point.
Blockchain technology has the ability to streamline the entire supply chain, reducing costs and improving efficiency for almost every party involved, with the cumulative effect of considerable savings to the end user, and a measurable impact on trade volume.
The sheer volume of global shipping, combined with the exceptionally useful yet broad functionality of this planned solution, means it might make a noticeable difference to the prices of consumer goods around the world, as well as the types of goods that are being shipped. Australians in particular will appreciate how important shipping costs are.
"We are confident this new company can make a real difference in shaping the future of global trade," said Clerc.
Cryptocurrencies affected
This partnership might also have implications for some of the cryptocurrencies aiming for similar functions. Other companies, including General Motors, Proctor and Gamble and Agility Logistics have also expressed interest in the new company's capability.
The capability of the IBM-Maersk venture overlaps with the functions of coins including:
- VeChain – A supply chain management cryptocurrency with a wide range of partners, including PricewaterhouseCoopers.
- Factom – A coin designed to support supply chains with a special focus on cost-effectively creating verifiable paper trails.
- Civic – A coin whose main application is identity verification and confidential personal data communication, but which can also be used to communicate essential details, such as trading information, without compromising confidentiality.
- Enigma – A cryptocurrency designed to let users run computational analyses on information without compromising the confidentiality of that information.
Cryptocurrency and the blockchain have often been seen as integral to each other, but ventures like this IBM-Maersk project suggest otherwise. Cryptocoins need the blockchain, but the blockchain doesn't necessarily need the coins. IBM's share price has been growing since the start of the year, as it moves further into blockchain systems.
Latest cryptocurrency news
- SEC crackdown on Binance, Kraken – What it means for Aussie investors
- Sam Bankman-Fried found guilty – what it means for Australian FTX victims
- Bitcoin’s price soars over 10% on ETF rumours – here’s why
- New regulations for Aussie crypto exchanges: What it means for investors
- Sam Bankman-Fried’s FTX trial starts tomorrow – what it means for FTX customers
