How the logistics giants MAERSK is using blockchain technology?

Maersk, the Danish container shipping giant has been testing a blockchain solution from the University of Copenhagen to digitize the ships’ cargo inventories. It ran a Proof of Concept (PoC) with IBM in September 2016 tracking a container of flowers from the Kenyan port Mombasa to Rotterdam in the Netherlands. As with the Marubeni deal, the technology for this pilot is based on the Linux Foundation’s open-source Hyperledger Fabric, designed to support multiple parties across the ocean shipping ecosystem. It is hosted on the IBM Cloud and its high-security business network.

On 5 March 2017 IBM and Maersk announced their collaboration “to use blockchain technology to help transform the global, cross-border supply chain”. Of the US$20trn of global trade that flows each year, 90% of it is carried by the ocean shipping industry. “IBM and Maersk intend to work with a network of shippers, freight forwarders, ocean carriers, ports and customs authorities to build the new global trade digitization solution,” stated IBM. It adds that the digitized process helps “reduce fraud and errors”, “reduces time products spend in the transit and shipping process, improves inventory management and ultimately reduces waste and cost”. Tellingly it notes, “Maersk found in 2014 that a simple shipment of refrigerated goods from East Africa to Europe can go through nearly 30 people and organizations, including more than 200 different interactions and communications among them.”

BM has highlighted that the costs associated with trade documentation processing and administration are estimated to be up to one-fifth of the actual physical transportation costs. “A single vessel can carry thousands of shipments, and on top of the costs to move the paperwork, the documentation to support it can be delayed, lost, or misplaced, leading to further complications. It then sets out how the blockchain-based approach would work.

  • As an immutable, secure, rich, and transparent shared network the blockchain provides each participant with end-to-end visibility based on their level of permission.
  • Each participant in a supply chain ecosystem and view the progress of goods through the supply chain understanding where a container is in transit. They can also see the status of customs documents or view bills of lading and other data. Customs authorities benefit, says IBM,  from improved information available for risk analysis and targeting “which may eventually lead to increased safety and security as well as greater efficiency in border inspection clearance processes
  • Detailed visibility of the container’s progress through the supply chain is enhanced with the real-time exchange of original supply chain events and documents
  • No one party can modify, delete, or append any record without consensus from others on the network.

Source: https://cib.db.com/insights-and-initiatives/flow/trade_finance_and_the_blockchain_three_essential_case_studies.htm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s