Digitizing Global Trade To Increase Efficiency Across ... · • Up to $30 billion in cargo theft...

The establishment of the joint venture remain subject to receipt of regulatory approvals. None of the information provided in this document should be construed in any way as a representation or undertaking with regard to the position to be adopted by Maersk or IBM. 1

Digitizing Global Trade To Increase Efficiency Across International Supply Chains

© 2 0 1 7 IB M C o r p o r a t io n

Juanjo RuizBlockchain Business Development, IBM

Daniel Wilson

Commercial Director, Maersk Line


Data Visibility Process Optimization Demand Management

2P a g e© 2 0 1 7 IB M C o r p o r a t io n

Supply chains have had the same three core problems for millennia ...



Data Visibility Process Optimization Demand Management

… and yet despite progress in each area …

… systemic inefficiencies remain for the end-to-end processes• Administrative costs are higher than

the cost of the physical transportation• Fraud in global trade is estimated at $600B

• Worldwide cargo losses exceeds $55B annually

• Up to $30 billion in cargo theft occurs every year

• About 30% of all freight damage in transit is unavoidable, most losses occur on the way to or from the ports

How do you share information?



Data Trust Analytics

We can connect the ever-increasing sets of data…

…with the ever-more-powerful analytics

BLOCKCHAINA trusted, distributedledger with sharedbusiness processes

• 80% of worldwide data is sitting in silos• 90% of data in the world today has

been created in the last two years• Less than 0.5% of all data is ever

analyzed

Blockchain creates the trust necessary to address the end-to-end process

• $130B+ is spent on big data and business analytics globally

• 73% of global CEOs report cognitive computing will play important role in the future of their organizations

5P a g e© 2 0 1 7 IB M C o r p o r a t io n 5P a g e© 2 0 1 7 IB M C o r p o r a t io n

Blockchain underpins Bitcoin

• An unregulated shadow-currency• The first blockchain application• Resource intensive

Blockchain for business differs in key areas:• Identity over anonymity• Selective endorsement over proof of work• Assets over cryptocurrency

is:


Blockchain addresses underlying challenges in collaborating across a distributed, fragmented supply chain ecosystem

Hyperledger Fabric: the use of a shared replicated, permissioned ledger ensures consensus, provenance, immutability and finality

Privacy

Shared ledger

Smart contract

Trust

Append-only distributed system of record shared

across business network

Business terms embedded in transaction database & executed with transactions

Transactions are endorsed by relevant participants

Ensuring appropriate visibility; transactions are

secure, authenticated & verifiable

Open global trade digitization platformOverview of offering

May 2018The establishment of the joint venture remain subject to receipt of regulatory approvals. None of the information provided in this document should be construed in any way as a representation or undertaking with regard to the position to be adopted by Maersk or IBM.

https://youtu.be/dcddYatMCGQ



The cost, size, and complexity of the world’s trading ecosystems continue to grow

8

More than $16 trillion in goods are shipped across international borders each year

80% of the goods consumers use daily are carried by the ocean shipping industry

By reducing barriers within the international supply chain, global trade could increase by nearly 15%, boosting economies and creating jobs1

1) The World Economic Forum: Enabling Trade Valuing Growth Opportunities 2013


Today: Global trade is hugely inefficient and burdened by paper-based processes

• Inconsistent information across organizational boundaries and “blind spots” throughout the supply chain hinder the efficient flow of goods

• Complex, cumbersome, and costly peer-to-peer messaging• Manual, time-consuming, paper-based processes• Risk assessments often lack sufficient information; clearance

processes subject to fraud

A single shipment of avocados from Mombasa to Rotterdam involves 30 actors, 100+ people, and 200 information exchanges

Consignee

Exporter Forwarder

CarrierTerminal Authority Authority

Authority

Authority Authority


• An open, neutral, and distributed platform underpinned by Blockchain technology

• Seamless, permissioned document and data sharing with a common access control structure

• Ecosystem participants access the platform via open APIs

Tomorrow: we will bring to market a trade platform for containerized shipping connecting the entire supply chain ecosystem

Customs Brokers

Ports and Terminals

Customs Systems

Ocean Carriers

Inland Transportation

Shippers / Supply Chain Actors

Supply Chain Visibility Systems

Trade Associations

Supply Chain / Transportation Management Systems

Authorities

Port Community Systems; Terminal Operating Systems

Freight Forwarders

Information backbone of the global supply chain

Tw o in itial applications w ill deployed on the p latform :

1. Shipping In form ation P ipeline : W ill provide real-tim e, secure access to end-to-end supply chain inform ation to a ll actors involved in a g lobal shipping transaction

2. Paperless Trade : W ill autom ate filings for the im port and export of goods by enabling end users to securely subm it, stam p and approve docum ents across national and organizational boundaries


The entire supply chain ecosystem will share a single trusted view of shipments

Global Trade Digitization Platform

Export

Inland Transportation Port / Terminal Authorities3PL Service Providers

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Shipping Information Pipeline Paperless Trade Future JV Products and Services Future Third Party / ISV Products and Services


The participants in the ecosystem will include the network members, clients, and offering providers

Global Trade

Digitization Platform

Network Members

Consumers

Offering Providers

Provide and gain access to end-to-end supply chain information

– Ocean carriers– Ports and terminals– Government authorities– Inland transportation– 3rd party data providers

Primary beneficiaries of the platform

– Traders (BCOs, retailers, manufacturers, etc.)

– Freight forwarders, customs brokers, 3PL

– Financial institutions

– The JV newco– Third party ISVs– Network Members and Clients

Offer value added services to the ecosystem through a platform marketplace


A global network of interconnected shipping corridors will link ports and terminals, authorities, ocean carriers, inland transportation, 3PLs, shippers, and other actors

Ports and Terminals

Provide information about the disposition of shipments within the boundaries of the port / terminal

Benefit from pre-built connections to shipping lines and other actors, end-to-end visibility across shipping corridors, and real-time access to more information to enrich port collaboration and improve terminal planning

Ocean CarriersProvide information about the disposition of shipments across the ocean leg

Benefit from reduced customer service and network integration cost, less revenue leakage, and less mis-declared cargo due to a digital audit trail of end-to-end shipment events and source documents

GovernmentAuthorities

Provide information about the export and import clearance status for shipments into and out of the country

Benefit from more informed risk assessments, better information sharing, less manual paperwork, and easierconnections to national single window platforms

Inland Transportation

Provide information on the disposition of shipments carried on trucks, rail, barges, etc.

Benefit from improved planning and utilization of assets (e.g., less queuing) given real-time access to end-to-endsupply chain events for shipments

ShippersEngage with the platform as a consumer of shipping information and user of paperless trade

Benefit from a streamlined and improved supply chain allowing for greater predictability, early notification of issues, full transparency to validate fees and surcharges, and less safety stock inventory

Freight Forwarders / 3PL

Provide the transportation plan, inland transportation events, information on intermodal handoffs, and document filings

Benefit from pre-built connections to the ecosystem, improved tools for customs clearance brokerage function, and real-time access to the end–to-end supply chain data to improve effectiveness of track-and-trace tools

Financial Services & Insurance

Engage with the platform as a consumer of supply chain information

Benefit from access to a definitive, real-time, and immutable source of information for trade finance and trade insurance


Together we can move the industry forward

Blockchain changes the gameNever before could disparate entities securely and confidently process paperwork filings digitally

Designed from the ground up as an industry platform shaped by the ecosystemThe platform is designed to be open to all industry players; we are committed to continuously improve based on ongoing, regular input and feedback

We are moving fastWe know that speed and scale are critical and building the network is the key to success

Strong support from IBM, Maersk, and Network MembersWith the support of IBM and Maersk, as well as influential Network Members, the JV have the global reach, executive support, and ability to execute in markets around the world


Maersk and IBM collaboration press releasehttp://www-03.ibm.com/press/us/en/pressrelease/53602.wss

Digitizing global trade blog and contact formhttps://www.ibm.com/blogs/blockchain/2018/01/digitizing-global-trade-maersk-ibm/

Cross-Border Supply Chain on Blockchain Demohttps://youtu.be/dcddYatMCGQ

A presentation and demo at IBM THINK by Michael White and Marvin Erdlyhttps://www.ibm.com/events/think/watch/replay/113885828/

Can the cloud lift global trade?http://www.maersk.com/en/the-maersk-group/about-us/publications/maersk-post/2015-2/can-the-cloud-lift-global-trade

Blockchain application in supply chain news articleshttps://www.nytimes.com/2017/03/04/business/dealbook/blockchain-ibm-bitcoin.html?_r=1https://www.ft.com/content/a36399fa-a927-11e7-ab66-21cc87a2edde

MORE INFORMATION

http://www-03.ibm.com/press/us/en/pressrelease/53602.wss

https://www.ibm.com/blogs/blockchain/2018/01/digitizing-global-trade-maersk-ibm/


https://www.ibm.com/events/think/watch/replay/113885828/

http://www.maersk.com/en/the-maersk-group/about-us/publications/maersk-post/2015-2/can-the-cloud-lift-global-trade

https://www.nytimes.com/2017/03/04/business/dealbook/blockchain-ibm-bitcoin.html?_r=1

https://www.ft.com/content/a36399fa-a927-11e7-ab66-21cc87a2edde

Digitizing Global Trade To Increase Efficiency Across ... · • Up to $30 billion in cargo theft...

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