In 2014, a team of Maersk IT specialists began following containers of avocadoes and roses from Kenya to the Netherlands. The team’s goal was to document—in order to digitise—the maze of physical processes and paperwork that impact every shipment and are a costly drag on cross-border trade.
Three years later and this work is the basis for the ongoing creation of what’s initially being called a global trade digitisation solution that will move all administrative processes and transactions associated with one container shipment—more than 200 interactions involving more than 30 people according to Maersk research—to the internet.
With Maersk’s partnership with IBM and its blockchain technology, the global trade digitisation solution (a kind of data pipeline) gets the transparency and security it will need to enable all relevant and approved parties in the supply chain access to the information they need and the ability to act on it, but without the paper trail and the billions of dollars in costs it creates for trade.
The projects we are doing with IBM aim to explore disruptive technology such as blockchain to solve real customer problems and create new innovative business models for the entire industry.
“As a global integrator of container logistics with the ambition to digitise global trade, we are excited about this cooperation and its potential to bring substantial efficiency and productivity gains to global supply chains, while decreasing fraud and increasing security,” says Ibrahim Gokcen, Chief Digital Officer for A.P. Moller - Maersk.
The customer impact
The paper trail research that Maersk did uncovered the extent of the burden that documents and processes inflict on trade, and the consequences. With every set of hands that stamp, email, phone call, scan, copy and hand deliver important cargo related certificates and information, the greater the likelihood of errors, lost information and delays that frustrate the progress of trade.
Global trade digitisation solution with blockchain
The global trade digitisation solution with blockchain will enable the real-time exchange of original supply chain events and documents through a secure digital infrastructure, or data pipeline, that connects supply chain participants from shippers and logistics providers to customs authorities, allowing greater visibility and flow of important information, with much greater security.
- For shippers, the 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 real time insight into cargo as it advances through the supply chain.
- For customs authorities, the solution will give real time visibility, significantly improving the information available for risk analysis and targeting, which will lead to increased safety and security as well as greater efficiency in border inspection clearance procedures.
With the global trade digitisation solution Maersk is developing with partners like IBM and its blockchain technology, real-time exchange of original supply chain events and documents among supply chain participants will be possible. From shippers and logistics providers to customs authorities, each participant gets greater visibility and access to the flow of important information with much greater reliability and security. No more physical, time-consuming and error prone processes, just uploads, downloads, clicks and swipes.
“The projects we are doing with IBM aim to explore disruptive technology such as blockchain to solve real customer problems and create new innovative business models for the entire industry,” says 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.”
Can the cloud lift global trade
For every container shipped overseas, a maze of processes and paperwork threatens its journey with lost or inaccurate information that is a costly drag on trade. An industrial PhD working in Maersk Line says there is a far simpler way – and he is building it.
Everyone wins, especially trade
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 digitisation solution, which is expected to go into production later this year. It has the potential to vastly reduce the cost and complexity of trading.
“The Customs Administration of the Netherlands sees this data pipeline as a tool supporting the balance between trade facilitation and enforcement, where information sharing in supply chains is optimized from a commercial perspective, and government authorities can re-use that information flow for supervision purposes,” said Frank Heijmann, Head of Trade Relations, Customs Administration of the Netherlands.
“It supports the needs of trade and governments in global supply chains, as it improves efficiency, compliance and security. The supply chain visibility serves all of those needs.”
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