Two business and tech titans are joining forces to further legitimize blockchain technology.
Maersk and IBM have announced their intent to establish a joint venture business meant to provide more efficient methods for conducting trade around the world using blockchain technology. The aim of this new company is to provide and jointly develop a global trade digitization platform built on open standards that can be used by shipping companies around the world.
A joint company from Maersk, a transport and logistics company, and IBM, a computing and tech powerhouse, will provide more transparency and simplicity in the movement of products across borders.
More than $4 trillion worth of goods is shipped each year, with 80 percent of the goods consumers use on a daily basis carried by the ocean shipping industry. It costs a lot to regulate all of these goods—estimates say that maximum cost of required trade documentation could reach one-fifth of the actual transportation costs. If trade barriers are reduced, global trade could increase by nearly 15 per cent, a whopping amount when dealing in the trillions of dollars.
“This new company marks a milestone in our strategic efforts to drive the digitization of global trade,” said Vincent Clerc, the chief commercial officer at Maersk. Clerc will become the chairman of the board for the new joint company as well.
“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,” added Clerc.
Blockchain technology will power the new platform, along with other cloud-based open source technologies like AI, IoT and analytics, all powered by IBM Services. These emerging technologies will allow companies improve the way they digitally track the shipment of goods. For example, when something is sent out, it will be inputted into the blockchain, a tamper-proof ledger that can be accessed by almost anyone, forever creating a log that shows the origin and destination of goods.
IBM is a major leader in developing blockchain technology for various industry adoption around the world. They recently pitched the B.C. government on using the tech in their quest to legalize marijuana, and this new reach into shipping shows the various uses the new technology can have. Corporations like General Motors and Proctor and Gamble have expressed interest in IBM and Maersk’s new joint venture.
The two companies also named Michael J. White as CEO of the new company. White was the former president of Maersk Line in North America.
“Today, a vast amount of resources are wasted due to inefficient and error-prone manual processes,” said White. “The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardization information flows using digital solutions.”
Blockchain is a significant player that will shape how companies around the globe conduct business. Many are familiar with its use in cryptocurrency, but there are many other ways it can be utilized as well.