Agility Logistics, a shipping firm based in Kuwait, has announced that it has joined a blockchain technology platform that was jointly developed by tech giant International Business Machines Corp. (NYSE:IBM) and shipping firm Maersk Line. According to the Kuwaiti logistics firm the blockchain platform will be used to securely integrate information on shipments and ensure it is accessible to freight forwarders, carriers, shippers as well as other players in the chain.
Trading partners will be able to use the platform in tracking shipments, payment transactions well as for documentation purposes. Containers already in transit will also have their information displayed as well as statuses of paperwork such as bills of lading.
“… companies like Agility can help Maersk and IBM understand the needs of shippers … We can help customers understand how to use blockchain to improve shipment visibility, eliminate paperwork, reduce errors, and shorten transit and clearance times,” said the chief executive officer of Agility Logistics, Essa Al-Saleh, in a statement.
One of the major benefits of the blockchain technology is that is the encoding of data is secure and this makes sensitive information invisible to hackers. Compared to traditional networks it is also more secure since the encrypted information is stored in several locations spread across the blockchain.
Last year vast amounts of data belonging to Maersk Line was hacked and the cyber criminals went on to blackmail some of the shipper’s clients via ransomware. With the blockchain technology platform of IBM and Maersk Line the encrypted data is only visible to freight forwarders, carriers, shippers and other selected users in the supply chain.
The joint blockchain initiative of IBM and Maersk was formed last year in a bid to cut costs and reduce bureaucracy. According to Maersk bureaucracy and documentation comprises about 20% of the total shipping costs. The average shipping costs per year is $1.8 trillion. For instance shipping refrigerated goods to Europe from East Africa sees a container go through close to 30 people as well as organizations.
Across the globe Maersk handles one in about seven containers that are shipped every year. IBM and Maersk’s joint blockchain initiative is headed by Michael White, the former head of North American operations at Maersk Line.