IBM and Maersk Demo Blockchain Cross-Border Supply Chain Solution

Summary

IBM and Maersk are collaborating to digitize and streamline global trade using blockchain technology. The current supply chain system, heavily reliant on manual, paper-based processes, creates inefficiencies and delays. By employing a distributed, permission-based blockchain platform, IBM and Maersk aim to improve transparency, reduce communication frictions, and track shipments end-to-end. This tamper-proof system facilitates real-time data sharing between key supply chain entities, significantly reducing delays and potential fraud. The partnership promises to enhance global trade efficiency and could boost GDP and trade volume worldwide.

Takeaways

• 🤝 IBM and Maersk are partnering to digitize and simplify global trade using blockchain technology.
• 🚢 Global trade is still largely manual and paper-based, with information siloed across different organizations.
• 📦 Around 90% of goods in global trade are transported by the shipping industry, and supply chains are slowed by complex, point-to-point communication.
• 🔗 The IBM-Maersk partnership aims to create a distributed, permissioned blockchain platform to exchange data and handle document workflows.
• 🔒 Blockchain ensures a tamper-proof system for tracking shipments, providing transparency and trust across the supply chain.
• 📊 The system will allow tracking of millions of container journeys per year and is integrated with customs authorities on selected trade routes.
• 🌸 In a real-world test, a container of flowers from Kenya to Rotterdam involved nearly 200 communications, highlighting inefficiencies that blockchain aims to solve.
• 📄 Blockchain helps automate processes like export approvals, document submission, and customs clearance with real-time status updates for all participants.
• ⏳ The system ensures timely and efficient handling of shipments, especially for perishable goods like flowers, reducing delays and errors.
• 💰 The adoption of blockchain in global trade could save billions annually by reducing fraud and delays, and the WTO suggests it could boost global GDP by 5% and trade volume by 15%.

Q & A

What is the primary goal of the partnership between IBM and Maersk?

The primary goal of the partnership between IBM and Maersk is to digitize and simplify global trade by using blockchain technology to create trust and transparency in the supply chain.

What challenge does global trade currently face according to the script?

Global trade still relies on manual, paper-based processes, with information locked in organizational silos, making it inefficient and complex.

What percentage of goods in global trade are carried by the shipping industry?

According to the script, 90% of goods in global trade are carried by the shipping industry.

How does blockchain technology help improve the supply chain?

Blockchain provides a tamper-proof system for digitizing trade workflows, tracking shipments end-to-end, and enabling secure data exchange. It reduces friction, costly point-to-point communications, and improves the efficiency of global supply chains.

What role does a smart contract play in this blockchain system?

A smart contract in this blockchain system enforces an export approval workflow, ensuring that all participants can simultaneously see the status updates as documents are approved by different agencies.

What are the benefits of using blockchain for tracking shipments?

Using blockchain for tracking shipments allows for real-time updates on document submissions, approvals, and physical goods location. It helps reduce delays, missteps, and fraud, ultimately saving costs.

How did the test case with Maersk shipping flowers from Kenya to Rotterdam demonstrate the system's effectiveness?

The test case showed that blockchain significantly reduced the complexity of communication, as nearly 200 interactions were needed for a single container shipment. The blockchain system streamlined this process, ensuring transparency and efficiency.

What specific documents are required when shipping flowers from Kenya, as described in the script?

When shipping flowers from Kenya, documents such as export approvals, chemical treatments, quality certificates, and customs duties descriptions are required.

How does blockchain help prevent delays in the shipment of perishable goods like flowers?

Blockchain enables real-time tracking of documents and goods, ensuring all necessary approvals are completed promptly and transparently, which is crucial for preventing delays in the shipment of perishable goods.

What potential economic benefits could result from reducing barriers within the international supply chain using blockchain?

According to the WTO, reducing barriers in the international supply chain through blockchain could increase worldwide GDP by almost 5% and total trade volume by 15%.

Outlines

00:00

🚢 Simplifying Global Trade with Blockchain

This paragraph introduces the collaboration between IBM and Mersk to revolutionize global trade through blockchain technology. It highlights the current issues in global trade, which has relied on manual, paper-based processes since the introduction of shipping containers in 1956. These processes cause inefficiencies and delays, with information locked in silos. The goal of IBM and Mersk's partnership is to digitize and streamline the supply chain, creating trust and transparency through a distributed, permission-based platform accessible to all stakeholders.

📦 Blockchain for Seamless Supply Chain Communication

The paragraph explains how 90% of global trade is still reliant on outdated, manual processes, contributing to delays and inefficiencies. Blockchain is proposed as a solution to address the complexities in point-to-point communication between various entities like land transportation providers, freight forwarders, customs brokers, governments, ports, and ocean carriers. IBM and Mersk’s blockchain platform is designed to exchange data and handle document workflows, ensuring tamper-proof, end-to-end tracking of shipments, which eliminates the need for costly and error-prone point-to-point communication.

🌍 Global Trade Revolution: Initial Blockchain Test

This section details the real-world testing of the blockchain platform by Mersk, involving the shipment of a container of flowers from Kenya to the port of Rotterdam. The test revealed that the traditional process required nearly 200 communications. By digitizing this workflow using blockchain, the system can track millions of container journeys and integrate customs authorities across trade lanes. This demonstrates the platform's potential to improve trust, security, and efficiency in the supply chain.

📑 Simplified Document Workflow Using Smart Contracts

Here, the paragraph focuses on the logistics and documentation process for exporting goods, using a shipment of flowers as an example. It describes how the grower submits a packing list via PC or mobile device, which triggers a smart contract that enforces an approval workflow between export agencies. All participants have real-time visibility of the status updates. Blockchain ensures that all documents and actions are securely shared, such as signatures, inspections, and approvals, eliminating any potential delays in the supply chain.

🔐 Blockchain’s Role in Securing the Supply Chain

This paragraph explains how blockchain secures the data exchange in the supply chain by creating a tamper-proof repository for documents and shipping events. This system not only prevents delays and fraud but also allows stakeholders to monitor the location and condition of the goods in real time. The paragraph highlights the benefits of blockchain in enhancing efficiency, reducing costs, and increasing transparency in global supply chains.

📈 Economic Impact of Blockchain on Global Trade

The final paragraph outlines the broader economic implications of blockchain technology in global trade. According to the World Trade Organization (WTO), reducing barriers in international supply chains could boost global GDP by nearly 5% and increase total trade volume by 15%. This underlines the transformative potential of blockchain, not just in streamlining logistics but in contributing to worldwide economic growth. For more information, the reader is directed to IBM’s resources.

Keywords

💡Blockchain

Blockchain is a decentralized and distributed digital ledger technology used to record transactions in a secure and tamper-proof way. In the video, blockchain is central to IBM and Maersk's efforts to digitize and simplify global trade by creating trust and transparency in the supply chain. It allows all parties involved in a transaction, such as customs authorities and shipping companies, to share data and track shipments without the need for intermediaries.

💡Global Trade

Global trade refers to the exchange of goods and services across international borders. The video discusses how global trade has remained relatively unchanged since the introduction of the shipping container in 1956, with many manual, paper-based processes still in place. IBM and Maersk's blockchain solution aims to streamline these processes, improving efficiency and reducing the complexity of cross-border trade.

💡Supply Chain

The supply chain is the system of organizations, people, activities, information, and resources involved in moving goods from suppliers to consumers. In the video, the supply chain for global trade is described as a 'loosely coupled web' of transportation providers, customs brokers, governments, and other entities. Blockchain technology is proposed to help synchronize the activities of these different actors, providing visibility and reducing communication bottlenecks.

💡Permissioned Platform

A permissioned platform is a blockchain system where access to the network is restricted to approved participants. In the context of the video, IBM and Maersk’s distributed permissioned platform is designed to allow only authorized entities in the supply chain ecosystem to view and share event data. This controlled access helps ensure trust and security in the digitization of trade workflows.

💡Smart Contract

A smart contract is a self-executing contract where the terms are written directly into code, which automatically enforces the agreement when certain conditions are met. In the video, smart contracts are used to initiate export approval workflows between different agencies, ensuring that each entity involved in the supply chain can view and update the status of shipments in real-time, without the need for manual intervention.

💡Event Data

Event data refers to the information generated by the various activities that occur within the supply chain, such as the approval of documents, the inspection of goods, or the pickup of a container by a trucker. The video explains how blockchain captures all actions related to documents and physical goods, allowing participants in the supply chain to know exactly where the goods are, who has them, and what steps are next in their journey.

💡Customs Authorities

Customs authorities are government agencies responsible for regulating the import and export of goods across borders. In the video, customs authorities are one of the key players that IBM and Maersk aim to integrate into their blockchain platform to streamline the process of clearing goods for import and export, reducing the number of communications and the potential for delays.

💡Document Workflow

Document workflow refers to the process of managing the various documents required in global trade, such as customs forms, bills of lading, and certificates of origin. In the video, blockchain is used to digitize and track the flow of these documents, ensuring that they are visible to all relevant parties in real time and reducing the risk of errors or fraud in the process.

💡Tamper-Proof System

A tamper-proof system ensures that once data is entered, it cannot be altered or manipulated. In the video, blockchain is described as a tamper-proof repository for documents and shipping events, which helps secure the integrity of the supply chain. This prevents fraud and ensures that all parties can trust the data being shared and stored on the platform.

💡End-to-End Tracking

End-to-end tracking refers to the ability to monitor a product or shipment from its origin to its final destination. In the video, the IBM and Maersk blockchain solution is described as offering end-to-end tracking for goods in the supply chain, enabling participants to see where goods are at any point in the process and to take action quickly if issues arise, such as perishable goods being delayed.

Highlights

IBM and Maersk are partnering to digitize and simplify global trade using blockchain technology.

Blockchain creates trust and transparency in the global supply chain.

Currently, 90% of goods in global trade are carried by the shipping industry.

Global trade is slowed by manual, paper-based processes and point-to-point communication across various organizations.

IBM and Maersk are using a distributed, permissioned blockchain platform accessible to the entire supply chain ecosystem.

Blockchain technology provides a tamper-proof system for digitizing trade workflows and tracking shipments end-to-end.

The platform aims to eliminate inefficiencies, such as costly point-to-point communications.

In a test by Maersk, tracking a single container of flowers from Kenya to the port of Rotterdam involved nearly 200 communications.

Blockchain allows all parties in the supply chain to see the status of documents and goods in real time.

The system uses smart contracts to initiate and enforce workflows, such as export approvals between different agencies.

Blockchain captures and shares key data such as document submissions, container locations, and next steps.

For perishable goods like flowers, blockchain reduces delays and minimizes the risk of missteps.

The blockchain system offers secure data exchange and a tamper-proof repository for documents and shipping events.

The technology could save billions annually by reducing fraud and delays in the supply chain.

According to the WTO, reducing international supply chain barriers could increase global GDP by 5% and trade volume by 15%.

Transcripts

the following is a demonstration of how

IBM and mesk

are partnering to digitize and simplify

global trade using blockchain to create

trust and transparency in the supply

chain

global trade functions much as it has

since the introduction of the shipping

container in 1956 manual paper-based

processes are still common and

information about the status of goods is

locked away in organizational silos

today 90% of goods in global trade are

carried by these shipping industry with

the supply chain slowed by the

complexity and sheer volume of

point-to-point communication across a

loosely coupled web of land

transportation providers freight

forwarders customs brokers governments

ports and ocean carriers IBM and murska

are addressing this problem with a

distributed permission platform

accessible by the supply chain ecosystem

designed to exchange event data and

handle document workflows mirskiy and

IBM are employing blockchain technology

to create a global tamper-proof system

for digitizing trade workflow and

tracking shipments end to end

eliminating frictions including costly

point-to-point communications the

collaboration will launch with the

potential ability to track millions of

container journeys per year and

integrate with customs authorities on

selected trade lanes in a recent test by

musk shipping a single container of

flowers from Kenya to the port of

rotterdam resulted in a stack of nearly

200 communications using this example we

will examine how blockchain has been

implemented to create trust and security

in the digitized document workflow and

improve the efficiency of global supply

chains

here we can see each distinct entity

involved in the transaction the growers

export to authorities ports customs and

importers shipping from the port of

Mombasa requires signatures from three

different agencies approving the export

and six documents that describe the

origin chemical treatments quality of

the produce and customs duties firstly

using a PC or mobile device the King in

pharma submits a packing list that

becomes visible to all participants

this action initiates a smart contract

that enforces an export approval

workflow between the three agencies as

each agency signs the status is updated

for all to see simultaneously

information about the inspection of the

flowers the ceiling of the refrigerated

container the pickup by the trucker and

the approval from customs is

communicated to the port of Mombasa

allowing them to prepare for the

container all actions relating to the

documents and the physical goods are

captured and shared which documents were

submitted when and by whom where the

flowers are and who is in possession of

them and the next steps in their journey

flowers are perishable so it's crucial

that there are no delays or missteps

blockchain provides secure data exchange

and a tamper proof repository for these

documents and shipping events this

system could significantly reduce delays

and fraud saving billions of dollars

annually and according to the WTO

reducing barriers within the

international supply chain could

increase worldwide GDP by almost five

percent and total trade volume by 15

percent for more information on how i BN

can help make blockchain right for your

business please visit IDM comm slash