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Maersk, IBM team up to develop blockchain 'pipeline'

MAERSK Lines and IBM have set up a joint venture to provide the container shipping industry with a blockchain "pipeline" where carriers, terminals, freight forwarders and railroads can upload cargo movement information to provide shippers with an end-to-end record.

The independent company stems from a project that Maersk Line and IBM announced 10 months ago to deploy "blockchain" technology to digitalise the complex paper trail involved in the global supply chain. IBM and Maersk estimate the initiatives could save the industry billions of dollars, reported IHS Media.



Maersk expects to launch the first two elements of the project - a shipping information pipeline offering end-to-end supply chain visibility and a paperless trade system that will digitise and automate paperwork filings - by the end of September. The pipeline effort will focus on building corridors on the top trades: Asia-Europe, trans-Pacific, and trans-Atlantic.



To make it work, however, Maersk will need to secure the support of supply chain participants across the spectrum, as users of the system and providers of information about cargo as it moves along the supply chain. That is one reason the shipping line decided to create a new "neutral" company to create and operate the portal that will be independent and be guided by an advisory board.



Through blockchain the record of transactions cannot be tampered with and will provide a new level of accountability to parties within the supply chain.



Maersk's said the technology's two main functions - the "shipping information pipeline" and the move to digitise and automate the supply chain - will provide "greater transparency, security, efficiency and simplicity to a shipping ecosystem that is massive in scale."



Head of global trade digitisation for Maersk Group, Michael White, said: "If we are really going to help drive digitisation in our industry, we have to try different models."



The system will reduce the cost of administering cargo movement, cut fraud and reduce administration costs by cutting out paper inefficiencies, Mr White said, adding that "the cost of paperwork is often more than the cost of transportation."



Since Maersk and IBM began working on the project, several companies have been participating in its testing, the carrier said. Among them were DuPont, Dow Chemical, Tetra Pak, port of Houston, Rotterdam Port Community System Portbase, the Customs Administration of the Netherlands, and US Customs and Border Protection.



Maersk has said in the past that its analysis has shown that shippers sending cargo around the world had to interact with 28 different entities - among them customs, terminals, shipping lines, and forwarders - and that without digitalisation the process could generate a stack of paper two inches thick.
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