Among non-payment applications of blockchain technology, supply chain management is receiving more and more attention. Covering a blockchain technology test for supply chain management lanunched by US retail giant Walmart in November, one of the first major blockchain tests outside the financial services industry, The Wall Street Journal noted that blockchain technology can help in overcoming delays and errors, resulting in more streamlined and efficient supply chain management.
The supply chain management sector is a prime target for advanced applications of blockchain technology able to reduce costs and inefficiencies. In fact, the sector represents billions of dollars in enterprise revenue, but is fraught with losses and inefficiencies resulting from risk, fraud or anachronistic manual paperwork delays.
Now IBM and Maersk – an integrated transport and logistics company and a global leader in container shipping and ports – are announcing a new collaboration to use blockchain technology to help transform the global, cross-border supply chain.
“We believe that this new supply chain solution will be a transformative technology with the potential to completely disrupt and change the way global trade is done,” said senior IBM VP Bridget van Kralingen. “Working closely with Maersk for years, we’ve long understood the challenges facing the supply chain and logistics industry and quickly recognized 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.”
The solution developed by the two companies is based on the open source Hyperledger Fabric code developed by IBM and its partners in the Hyperledger Project, a high-profile collaboration including cross-industry leaders, managed by The Linux Foundation and aimed at advancing blockchain technologies for business applications. The solution developed by IBM and Maersk is expected to be available to partners in the ocean shipping industry later this year.
The solution will be hosted on the IBM Cloud and high-security business network, and delivered via IBM’s cloud computing platform Bluemix. It’s worth noting a side benefit of the partnership for IBM: besides its blockchain technology, Big Blue is promoting its cloud computing infrastructure, which is a key part of its business strategy.
“As a global integrator of container logistics with the ambition to digitize global trade, we are excited about this cooperation and its potential to bring substantial efficiency and productivity gains to global supply chains, while decreasing fraud and increasing security,” said Maersk chief digital officer Ibrahim Gokcen. “The projects we are doing 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 both emerging and developed countries.”
Reuters notes that, according to data provided by Maersk, a shipment of refrigerated goods from East Africa to Europe can go through 30 participants and more than 200 different communications, each a potential source of delay and/or error. According to IBM and Maersk, the new blockchain solution enables real-time exchange of supply chain transactions and documents through a digital network connecting all participants.
This development is interesting because, besides the high profile of the two companies involved, it shows how blockchain technologies are mature for real-world applications beyond payments. The aspects of supply chains that make the sector challenging and a prime candidate for blochchain-enabled streamlining, and in particular the need for fine-grained coordination between remote independent actors, are also found in emerging high-tech sectors including sensor networks, swarm robotics and the Internet of Things (IoT).