- IBM and Maersk Line on Sunday announced a new partnership to digitize the paper trail and track containers as they travel through the supply chain, expecting to launch the technology later this year.
- The two companies would use blockchain technology — which is "an immutable, security rich and transparent shared network" capable of recording transactions, like customs processing or bills of lading, as they occur — and work with various shippers, carriers and governments to build the product.
- The ambitious goal would seek to bring supply chains closer to real-time visibility, improve workflow and reduce fraud between links. With 90% of globally traded goods carried by ocean shipping each year, and more than 200 interactions occurring at each shipment, blockchain technology could save the industry billions of dollars in efficiencies, per the release.
The ambitious goal would seek to bring supply chains closer to real-time visibility, improve workflow and reduce fraud between links. With 90% of globally traded goods carried by ocean shipping each year, and more than 200 interactions occurring at each shipment, blockchain technology could save the industry billions of dollars in efficiencies, according to the companies.
The reason? A shared network between logistics partners would allow for tamper-proof record keeping and full visibility. Every time a product moves from one link in the chain to another, whether that be customs or a carrier or a retailer's customer, the good leaves a paper trail. A receipt, a bill, a certificate of delivery, an electronic log record are all capable of providing real-time information on a product, if only it could all be collected and tracked.
Blockchain advocates believe it can offer a universal language for valuable data and information, without the vulnerability of easy access the current system of paperwork provides. Only those directly involved with the shipping process may access the network, though the platform is considered open source.
The challenge is that, to do this, each link in the chain must also be willing and able to access the network and upload this record. Maersk and IBM believe they can launch the solution later this year, and other companies like Wal-Mart have also notably begun to pilot its use, but history shows coordinating various actors to embrace digitization is difficult, to say the least.
Consider the adoption of the internet. The technology on which our current system is based first emerged in the early 70s, yet business use did not become widespread until the 90s or later. Similarly, business groups trying to push digitization across borders face various challenge — the International Air Transport Association has been pushing to bring its documentation processes online, to much delay. A look at the decades-long delay of the World Trade Association's Trade Facilitation Agreement, too, provides insight into the difficulty of getting various governments to agree to use technology meant to expedite processes.
Industry leaders like Maersk Line and IBM can be expected to lead the charge in the technology, but the full industry will take significantly longer to adapt. Nonetheless, the move falls in line with both companies' push for supply chain digitization and suggests that, in the very long-term, blockchain may become commonplace across value chains.