Maersk and IBM have just announced they are working together to create a digital platform to service the global freight forwarding industry. This comes on the heels of our recent post about how Maersk is beginning to dip its toes in digital. It provides a preview of the kinds of initiatives they have planned, and it’s now clear that they are going big.

If they can pull it off, the Maersk/IBM plan could be nothing short of revolutionary. They are working together to service global freight forwarding through a singular platform that would digitize the freight experience from end-to-end, spanning the entirety of the supply chain.

One aim of the platform is to standardize communications and documentation that bog down global trade across borders, creating “standards across the entire industry,” per Maersk CCO Vincent Clerc via Reuters, which predicted that the platform will “speed up trade and save billions of dollars.”

We’ve spent a lot of time thinking about the role of technology in the supply chain: specifically in ocean freight and in freight forwarding. This is obviously a huge development, but there are still some key questions which will determine if this is a game-changer or just another pipe dream:

1. Can it be neutral? If the joint platform serves only those who are using Maersk as a carrier, its appeal will be limited. Although it is a shipping juggernaut, Maersk still only accounts for around 15-20% of global shipping trade. For this to work, other carriers must adopt this solution to give the buyers of capacity the ability to neutrally evaluate their options and make economically rational decisions. If the deck is stacked to favor Maersk, adoption will be limited.
2. Can it truly be end-to-end? Those of us in freight forwarding know that each link in the supply chain is only as good as its “neighbors.” One weak spot, and efficiencies disappear and the entire process can grind to a halt. By aspiring to be end-to-end, Maersk is taking on formidable tasks such as customs and documentation: no small feat, given the amount of human-scale work and problem-solving that is required on a daily basis. Sure, these companies have ample resources to tackle these challenges, but many have tried before, and it’s not as easy as it seems.
3. Is this the right time for blockchain? Blockchain is a promising but still poorly understood framework for building the next generation of highly encrypted transactional record-keeping. It is, in fact, ideally suited for use in logistics, and its use is spreading throughout many industries. But it is still in its infancy, and it will be interesting to watch as it is battle-tested in our industry. If anyone knows how to deploy blockchain, it is IBM. The question is, is the rest of the supply chain ecosystem ready to trust it?

The Maersk / IBM partnership may prove to be one of the most transformative events in the logistics technology revolution. But it is not a sure thing. Other carriers will surely attempt to learn from their “first-mover” experiment, and as we’ve discussed in previous posts, startups (some of them very well-funded) will be nipping at their heels.

Here at CoLoadX, we are always looking for ways to serve our customers and partners in this new environment, and we are particularly keen to explore the ways blockchain will shape our business in the years ahead. Of course, we welcome the innovation represented by this initiative...but we also recognize it’s the first step in a very long road ahead.

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By: CoLoadX on Jan. 25, 2018, 11:32 a.m.

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