IBM and Maersk will partner to use blockchain technology to conduct, manage and track transactions in the shipping supply chain.
The companies said they collaborated on creating blockchain tools for cross-border transactions among shippers, freight forwarders, ocean carriers, ports and customs authorities.
According to Maersk and IBM, the blockchain effort, built on the Linux Foundation’s open source Hyperledger platform, will aim to replace paper-heavy manual processes with blockchain to improve transparency and secure data sharing.
Related: IBM, Northern Trust partner on financial security blockchain tech | How to use blockchain to build a database solution | Disney, yes Disney, becomes blockchain’s biggest proponent | How it works: Blockchain explained in 500 words | Stop overhyping blockchain
Maersk and IBM will work with the shipping supply chain to build a blockchain digital platform that will go into production later in 2017.
Blockchain has potential for supply chain applications because the private and secure transactions can digitize processes, cut fraud, bolster inventory management and save time and money.
Just improving visibility and workflow with trade documentation processing can save billions of dollars. Here’s how the blockchain process will work in the context of shipping:
- Blockchain gives each participant in the trade to have visibility.
- The supply chain ecosystem can view the progress of goods through a network with customs status, bills and data.
- Supply chain events and documents are exchanged in real time.
- No party can modify, delete or append a record without consensus from others in a network.
- Transparency will cut fraud and reduce the time products are in transit.
Maersk, which has a supply chain services unit, and IBM have run a few proof-of-concept pilot with Maersk Line container vessels, the Port of Rotterdam, Port of Newark and Customs Administration of the Netherlands. That pilot, conducted as part of a EU research project, also included U.S. agencies.