IBM & Maersk - Global Trade Digitization
Two of the biggest players of their industries have teamed up to tackle the problems related to cost of international trade. Why this problem had to be addresses and how does blockchain technology fit into this solution, these are the questions we should have answered by the end of this post.
Global trade is what keeps world economies running, therefore cutting costs in the sector is a necessity for an increase of goods that can be transferred worldwide. IBM and Maersk have come up with a simple solution on how to cut these costs; transparency and simplicity of the paperwork used in supply chain.
As seen above, the blockchain platform will address a handful of matters that are slowing down container shipment. All that complexity and time-consuming processing will be eliminated using Global Trade Digitization. How is that going to work? IBM has provided the following image showing the logistics of the open platform, as well as a list of benefits from its implementation.
The move comes amid the cost and size of the world’s trading ecosystems continuing to grow in complexity with in excess of $4 trillion of goods shipped each year. Today more than 80% of the goods that consumers use daily are carried and transported across the oceans by the shipping industry.
Given that the maximum cost of the required trade documentation to process and administer many of these goods has been estimated to reach around a fifth of the actual physical transportation costs, addressing cost reduction in this area could yield significant cost savings.
Indeed, according to the World Economic Forum (WEF) by reducing barriers within the international supply chain, global trade could increase by nearly 15%, boosting economies and creating jobs.
For more information please view the video posted by IBM on the joint venture: