While everyone thinks that blockchain is the platform for the cryptocurrency, they are wrong. Blockchain was the platform used to develop cryptocurrency, and while its original purpose was to create a public ledger that allows transactions to happen in microseconds, the cryptocurrency product was only one, and most probably a minor function of the blockchain.
Blockchain and its derivatives such as Ethereum allow for multiple user access to single files. What does this mean? It means that if you are working on a contract, a patient file or a logistics process, you can now work together with many users working at the same time on the same file. The old system requires that only one person access the same file at any given time. This meant that changes and editions could only occur in a vertical system. The blockchain allows for a file to be truly public, where changes are made simultaneously, speeding up work and enabling immediate collaboration. The file is then closed through an authoring process that seals it. A sealed file cannot be deleted, changed or moved. It is time-stamped and is saved on every node in the blockchain. Recently closed systems allow files to be closed on just collaborating nodes and not the entire system, speeding up the authorization process.
The revelation of this evolutionary technology opened up just about every aspect of society including the handling of legal documents, negotiations, medical files, financial transactions and manufacturing and supply chain processes.
IBM and A.P. Moeller-Maersk
IBM the IT giant and Maersk the logistics giant have come together to work on a blockchain derivatives called Hyperledger Fabric 1.0. Their aim is to create the worlds first and most comprehensive and efficient supply chain platform.
Brian Beheldorf of the Linux Foundation, the hosting site for Hyperledger Fabric 1.0. said that the “Adoption of Hyperledger Fabric by Maersk and its partnership with IBM has the potential to remake the shipping sector landscape and its use of information technology.”
This is actually an understatement, since blockchain, combined with hardware initiatives, will lead to a completely streamlined and efficient supply chain system that will be adapted for every aspect of logistics ranging from shipping, rail, space and even autonomous vehicle traffic control.
IBM and A.P. Moeller-Maersk are setting up a new company, where Maesrk will hold 51% and IBM 49%. The company will sit in NY. Former Maersk President for North America, Mike White will be CEO, and Maersk CCO Vincent Clerc will be the Chairman of the Board.
The concept and vision that a streamlined supply chain will provide to major distributors are of high concern. The ability to track products as well as assure safe and quick processing through ports and transportation systems will transform global commerce. Companies such as GM, Procter & Gamble as well as Agility Logistics are all interested in this new initiative and will provide assistance as well as offer to be strategic partners in the development and deployment of the system as it develops.
Product development/purchasing and supply chain communications manager at GM, Nick Richards told the ‘LinuxInsider’ that “Maersk is a strategic partner of General Motors. We believe this initiative will improve efficiency in how we manage our logistics network, as well as improving the visibility of our cargo. We have started testing this in a few international lanes with Maersk.”
Cost and Operational Efficiency
Katherine Mosquera, the Maersk spokesperson, said that “The new company will provide an opportunity to use blockchain technologies to reduce inefficiencies and build revenues across the global industry. Today blockchain opens up an entirely new set of possibilities and a unique opportunity to engage the entire global shipping ecosystem.”
The technology will be developed for cloud-based and will incorporate latest software technologies to improve processes through machine learning algorithms. One of the advantages that blockchain provides is the ability to trace the origin and destination of information, which means they can now trace and track all goods within the system.
Singapore and Peru have shown interest in collaborating and allowed their customs officials to integrate and utilize this supply chain process to enhance security and facilitate trade flow. Also, International terminal operators APM Terminals, and PSA International will also integrate the new services to improve terminal planning and improve port collaboration.
Research and Development
This new initiative comes after a year of R&D, where both IBM and Maersk started to work together from June 2016. They developed and tested blockchain programs, collaborating with global entities such as Tetra Pak, Dow Chemical, DuPont, Port Houston, Rotterdam Port Community System Portbase, and U.S. Customs and Border Protection.
When two giants start to collaborate on creating a comprehensive solution to a global issue, it won’t be long before others try to buy into the venture. Success is inevitable, since the system has proven itself, and it is now just a matter of time to create a master framework that will sit in every port, logistics center and distribution house for the global economy to speed up, be more efficient, fully transparent and economical. It will provide full accountability as well as speed up tax and customs evaluations leading to speeder releases. A side product will be the way the world deals with illegal trade and piracy, where the only criminal activates will remain outside the global network, enabling law enforcement agencies the ability to concentrate on a smaller and more focused area, outside the network.
Once blockchain covers central bank financial transactions, the whole supply chain “end to end” and “purchase to invoice” process will become an issue of seconds per transaction, where the only time has taken is the time is taking a shipment to reach its destination.
Another by-product will be the third party and parallel systems that will crop up and synchronize activity. Since there will most probably never be “one” global system, but many working alongside each other, the blockchain derivative will allow them to talk together, creating a global mesh of interactions that will enable the supply chain process to be truly efficient no matter which platform or app a company uses or adds to its arsenal.