2018 is the year A.P. Moller-Maersk is teaming up with IBM in a Joint Venture for an industry-wide trading platform. The market has been expecting smart contracts and blockchain-based platforms, but what does this really mean for the rest of shipping and logistics?
The platform will help manage and track millions of containers globally. For all parties involved in a shipment it enables data sharing across a network of individual computers. All communications are centrally documented and visible in a secure environment, and standardises information exchange. Yes, this is the long-anticipated digital transformation of shipping.
On first look, it is a response to the past cyberattack on Maersk’s IT that left the conglomerate struggling to bring their systems back online plus a multi-million-dollar damage. The Blockchain-based system now gives unprecedented security to the ocean carrier’s operations data. Reduced delays, human errors and fraud are further benefits.
Maersk, and a handful of multinational shippers like Dupont, Dow Chemical und Tetrapak, as well as US and Dutch port and customs authorities contributed in development tests. Now, the Danish carrier quotes, “the success of the platform depends on acceptance of all participants”.
If you look at this development from a macro perspective, it’s not just a big leap towards digitised operations. It’s the attempt to truly establish Maersk as the shipping platform for the new digital era – an era in which Maersk aims to steer all communication and customer contact. Why can it not be a larger consortium administrating such a platform instead of the largest ocean carrier by themselves?
While the technology’s utility is without doubt accessible to all participants, the long-term value for Maersk runs on the same exponential trajectory as the one Amazon’s e-commerce platform has been following for 25 years. The result: All sectors that the platform tenders to eventually fall prey to its host. The Maersk-IBM platform happens to serve shipping, freight forwarding, and producing companies alike – and I don’t see why they won’t eat up the market by means of this platform. How does this not strengthen Maersk’s brand and direct contact to customers and puts them in the position to eventually operate the entire value chain for producing companies? Nobody in the industry wants one dominant player to control this technology, but is there even a way that small- and medium-sized can sustainably operate in the Maersk environment?
Platforms can have a remarkable way of changing market dynamics. However, there are still a number of questions which should be evaluated thoroughly before making any decisions. Nevertheless, blockchain technology changes the way the transport industry operates and brings transparency into the market. In my opinion, other market players should come together and collectively support a platform which is hosted, regulated and accepted by all.