The joint venture aims to revolutionize the global shipping industry with blockchain technology at its heart.
IBM, in partnership with Maersk, is launching their own blockchain based solution to the complex world of the global shipping trade, the joint company the two giants have formed is so far unnamed. The aim of the initiative is to simplify the complex process of transporting goods across the worlds myriad of disparate trade zones. The system, based on a blockchain developed in-house by IBM, has two key goals; providing a shipping information pipeline with a real-time and completely transparent view of merchandise movement, the system is all based on the concept of smart contracts replacing the currently complex and labor-intensive paperwork process. The initiative was first trailed in 2016.
In a press release published earlier today, Maersk said:
More than $4 trillion in goods are shipped each year, and more than 80 percent of the goods consumers use daily are carried by the ocean shipping industry. The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs. According to The World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15 percent, boosting economies and creating jobs.
Maersk and @IBM launch #blockchain joint venture to improve global #trade and digitise supply chains: https://t.co/qY44cSTbTf
@IBMBlockchain @IBMLinuxOne @IBMEurope @IBMNews pic.twitter.com/moR76guQSQ
— Maersk (@Maersk) January 16, 2018
Planned Launch and Industry Reception
Michael J. White, CEO and former president of Maersk Line in North America, announced:
The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardizing information flows. Now this work has progressed to a point that a beta version involving all players of the ecosystem along a specific trade lane can be launched. That is why we intend to create the joint venture – to take these solutions to market.
Feedback from blockchain specialists has been positive with Bill Fearnley, Jr., research director for blockchain strategies at market research firm IDC stating:
Supply chain is a very, very hot topic right now and it is only accelerating from here.
Fearnley believes that IBM and Maersk’s new company will have a competitive advantage over smaller blockchain startups angling for the same market due to the pre-established business relationships of the companies behind it.
Blockchain Tech Outside of Bitcoin
IBM’s ventures outside of well-established models like Bitcoin’s blockchain, set apart by their more centralized nature, present potential security issues compared to Bitcoin’s wider decentralization but it remains to be seen how the impact and success of privately run blockchains will measure up to their innovative big daddy Bitcoin.
White is expecting the joint Maersk-IBM venture to get regulatory approval in early spring and begin selling software subscriptions by the third quarter of 2018. At the time of press, the new company is busily assembling an advisory board of industry and government officials in order to push product development to fruition.
With Bitcoin already a dominant platform for Blockchain, would it be possible to persuade businesses to use Bitcoins’ secure decentralized blockchain? Let us know what you think in the comments below.
Images courtesy of Shutterstock
