Maersk and IBM to launch platform

The largest container shipping group, AP Moller-Maersk, is teaming up with IBM to create an industrywide trading platform it says can speed up trade and save billions of dollars.

The global shipping industry has had little innovation since the container was invented in the 1950s, and cross-border trade still leaves an enormous trail of paperwork.

Success of the platform, which will be made available to the shipping industry around mid-2018, depends on whether Maersk and IBM can persuade shippers, freight forwarders, ocean carriers, ports and customs authorities to sign up.

Blockchain technology powers cryptocurrency bitcoin and enables data sharing across a network of individual computers. It will help to manage and track tens of millions of shipping containers globally by digitising the supply chain process from end to end, the companies said.

“The big thing that is missing from this industry to digitise and unleash the potential of the technology is really to create a form of utility that brings standards across the entire ecosystem,” said Maersk chief commercial officer Vincent Clerc.

A shipment of refrigerated goods from East Africa to Europe can go through nearly 30 people and organisations and involve more than 200 different communications, said Maersk. Documentation and bureaucracy can be as much as a fifth of the total cost of moving a shipping container.

“There is a strong push from the end-customer to see this change. We may meet initial resistance from one part of the ecosystem,” Clerc said.

“The success of the platform depends on acceptance of all participants,” he said.

INTEREST SHOWN

Customs and port authorities in the US, Singapore, the Netherlands and China’s Guangdong province had shown interest in using the platform and some other shipping companies were also interested, he said.

Maersk, which handles one in seven containers shipped globally, sold its energy business in 2017 to focus entirely on transportation and logistics.

A cyber attack in 2017 caused some of the biggest disruptions to global shipping, displaying the vulnerability of outdated communication systems.

Maersk’s container and port operations were hit for weeks, as it struggled to bring its information technology systems including about 1,500 applications back online.

The joint venture will be headed by the previous chief of Maersk Line’s North American operations, Michael J White.

Maersk and IBM first announced their co-operation in March 2017.