Innovative companies are unlocking the potential of blockchain, the digital ledger technology underlying Bitcoin, for purposes beyond tracking cryptocurrency.
IBM and Danish shipping company Maersk have announced that they will collaborate to create a new company that will use blockchain to track shipping supply chains. The software will be useful for any company that sells goods, and will especially ease the process for shippers and their dealings with ports and customs officials. Blockchain will be used to more efficiently and clearly catalogue the complex, numerous transactions involved in shipping.
Documentation has long been the bane of the shipping industry. Lost or delayed paperwork are extremely costly, with documentation accounting for one fifth of shipping expenses. IBM and Maersk see blockchain as a tool “to increase efficiency and timeliness for cargo movement, says Michael J. White, CEO of the as-yet unnamed company. Marie Wieck, IBM’s general manager for the blockchain team, says that “Even small improvements can have a substantial impact on global trade.”
Vincent Clerc, Maersk’s chief commercial officer who will serve as board chairman for the new partnerships, says that “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.”
In fact, according to a 2013 World Economic Forum study, improving information sharing in the shipping industry, and streamlining border administration, “could increase GDP by nearly 5 percent and trade by 15 percent.”
Both companies have been gearing up for this partnership. IBM has already tested their blockchain software with Walmart, Nestle, and Unilever, while Maersk has tested blockchain for managing marine insurance. In 2016, IBM and Maersk tested their blockchain system by successfully tracking the shipping of a container of flowers from Kenya to the Netherlands.
The new company has already built partnerships with large companies like Dupont, Dow Chemical, and Tetra Pak, and its customers also include various ports and customs offices. They are anticipating government approval this spring and hope to be selling their blockchain software by the end of the year.