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Maersk and IBM have come together to develop a blockchain solution for the shipping industry as the world’s largest box line embarks on its digitisation drive.

The blockchain solution is based on the Hyperledger Fabric and “will help manage the paper trail of tens of millions of shipping containers across the world by digitising the supply chain process from end-to-end, to enhance transparency and secure sharing of information among trading partners”.

The technology is essentially an encrypted messaging system that allows supply chain partners to operate a shared ledger that records all the events in the processing and physical progress of a shipment, such as customs entries or bills of lading.

During last week’s TPM conference in Long beach, Maersk Line chief commercial officer Vincent Clerc revealed that the carrier had completed its first trial shipment from Rotterdam to New York with Schneider Electric goods shipped in a pilot with the Customs Administration of the Netherlands under an EU research project.

The US Department of Homeland Security Science and Technology Directorate and US Customs and Border Protection also participated, while Maersk’s logistics subsidiary, Damco, supported origin management activities of the shipment using the blockchain solution.

Mr Clerc said: “Our digitisation-of-global-trade programme began with our investigation into the trade of cut flowers from Kenya to Europe, where we found shippers had around 200 interactions with various organisations to manage the shipments.

“All were done on paper – it was, literally, a two-inch stack of paper and the cost of working this way is almost the same as the cost of transporting the goods.

“We followed the same process for other commodities and found that the picture is similar all over the world.”

Ibrahim Gokcen, chief digital officer at Maersk, said: “The projects with IBM aim at exploring a disruptive technology such as blockchain to solve real customer problems and create new innovative business models for the entire industry.

“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 emerging and developed countries.”

Brigid McDermott, vice-president of IBM’s blockchain programme, told The Loadstar on the sidelines of TPM last week that the key feature of the technology is that it is tamper-proof – no one stakeholder of the supply chain is able to change the content any of the messages, while all messages are available for all to view.

“With blockchain, suddenly you have trust and you have much better visibility of the supply chain – so that issues like disputes between supply chain partners become a lot easier to resolve.

“At any given time, there’s up to $100m tied up in disputes, which take on average 40 days to resolve. In one project, we have got this down to an average of 10 days,” she said.

Today, Bridget van Kralingen, senior vice president of Industry Platforms at IBM said: “Working closely with Maersk for years, we’ve long understood the challenges facing the supply chain and logistics industry and quickly recognised the opportunity for blockchain to potentially provide massive savings when used broadly across the ocean shipping industry ecosystem.

“Bringing together our collective expertise, we created a new model the industry will be able to use to help improve the transparency and efficiency of delivering goods around the globe.”

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