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Blockchain for Cargo Supply Chain Management

Blockchain for Cargo Supply Chain

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Blockchain for Cargo Supply Chain


In our minds, Blockchain for Cargo supply chain management might not align well with the image of the traditional shipping industry, but that is a reality.

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

The cost and size of the world’s trading ecosystems continues to grow in complexity. More than $4 trillion in goods are shipped each year, and more than 80% of the goods consumers use daily are carried by the ocean shipping industry. The maximum cost of the required trade documentation to process and administer many of these goods is estimated to reach one-fifth of the actual physical transportation costs.

According to a 2013 study by World Economic Forum, by reducing barriers within the international supply chain, global trade could increase by nearly 15 percent thereby boosting economies by 5% and creating jobs.


IBM & Maersk JV


IBM and Danish shipping & logistic giant Maersk have teamed up to form a new company whose aim is to commercialize blockchain technology for all aspects of the global supply chain system, from shipping to ports, and banks to customs offices.

Maersk, the Danish conglomerate that owns the world’s largest container shipping line, will be the first to use the new platform, while IBM Corp. will provide the back end and support for the technology. The new company said it expects to sign up large shippers, ports and customs officials for the service, set to become available in the second half of 2018.

The IBM-Maersk joint venture, which will be based in the New York City area. They have named Michael White, former president of Maersk Line in North America, as CEO. Maersk will own 51 % of the new company, with the rest of the stake belonging to IBM, the companies said Tuesday (Jan 16, 2018) in announcing the new venture. 

While during the announcement Michael White commented,



“Today, a vast amount of resources is wasted due to inefficient and error-prone manual processes. The pilots confirmed our expectations that, across the industry, there is considerable demand for efficiency gains and opportunities coming from streamlining and standardizing information flows using digital solutions. Our ambition is to apply these learnings to establish a fully open platform whereby all players in the global supply chain can participate and extract significant value. We look forward to further expanding our ecosystem of partners as we progress toward a global solution.”


IBM & Maersk began a collaboration in June 2016 to build a new blockchain and cloud based technologies. IBM worked on a pilot, where a container of flowers that sailed from Mombasa, Kenya to Rotterdam in the Netherlands was traced. This convinced Maersk of the system’s potential. Since then, the two companies have partnered with Dupont, Dow Chemical, Swiss food processor Tetra Pak, and various ports and customs offices on tests.




Though the cyber-attack last year caused some of the biggest-ever disruptions to global shipping, displaying the vulnerability of outdated communication systems, the digitization of cargo supply chain is already seeing lot of traction.

All this because blockchain technology would bring increased efficiency, fast & secure access to end-to-end chain information plus verifiable authenticity and Immutability. Once the JV gets the regulatory approval in early spring, blockchain solution is expected to get impetus in Cargo supply chain.