MAERSK BETTING ON BLOCKCHAIN-

CASE ANALYSIS

Submitted by
Vaishnav S
PGP/23/245
Sec A
COMMON CHALLENGES AND PROBLEMS FACED
BY INTERNATIONAL LOGISTICS
 International Logistics involved great amount of error prone manual processes, making the process very inefficient and
leading to wastage of resources
 There was huge reliance on paperwork and documentation, leading to higher cost with the costs being calculated to be
20% of the physical transportation cost
 The main motivation behind sticking with paper work was to eliminate frauds but that was not to be the case as maritime
fraud was found to be as high as $600 billion per year
 There were many touchpoints across the supply chain and this led to discrepancy in information flow across the supply
chain. As mentioned in the case, many times information was available only at the origin and not at the destination
 Cargos were getting delayed despite having all the documentations as they were not always present in the right hands

 There was very little transparency in the process especially while passing through the stage of customs check

 Lack of transparency and the people based nature of the process required personal connections, emails and phones to get
the containers moved quickly across the borders
 Informational Inconsistency and blind spots across the Supply Chain were the biggest challenges and the results of a World
Economic Forum study suggested that global trade can increase by 15% and GDP by 5% if these challenges are overcome
 DOCUMENTATION PROCESS INVOLVED IN
INTERNATIONAL LOGISTICS
1) Necessary Certificates are filled by the Source Company
2) Freight Forwarder fills the Certificate of Origin
3) The Certificates reach the local port authorities for approval
through Courier
4) Original Documents are then transported to the Destination
Freight Forwarder
5) Documents sent via courier to a Consulting Company to prepare
and package other import related paperwork
6) Courier then transports the documents to the concerned port
terminal gate
7) If the documents are in order, a truck driver picks up the container
8) It is then transported to the Destination Customs Controlled Area
for approval
9) If approved, the container is released
 HOW BLOCKCHAIN CAN HELP OVERCOME THE
CHALLENGES
 Blockchain will provide a significantly higher sense of security than paper documentation. With permissioned access,
visibility increases and all stakeholders across the supply chain will have access to all information.
 The information will be verifiable as well with people able to see who made what changes and when. This will also ensure
accountability on the part of stakeholders involved
 Blockchain will eliminate centralization of information and all the parties involved in the supply chain will share equal
access and ownership of the information
 The Global Trade Digitization Platform (GTD) thus created will provide companies a safe digital platform to exchange
documents and will lead to a more transparent supply chain
 The elimination of paper work and physical documentation will bring down errors to a large extent

 Custom Clearances will be made faster using Paperless Trade facilitated through smart contracts that will have predefined
formats making it easier to get approval for clearance. This will make the logistics process faster and hassle-free
 The case has an example regarding a refrigerated shipment going through more 30 organizations and requiring more than
200 communications. Such a long process is prone to errors with the traditional paper-based documentation. But with
Blockchain technology all the steps get digitally recorded, thereby reducing any possibility of errors.
 TECHNOLOGICAL INSIGHTS ABOUT
BLOCKCHAIN TECHNOLOGY
 Blockchain will offer solution to the most pressing problem faced by International Logistics- Security. The function of
Blockchain as a Digital Ledger coupled with permissioned access will lead to transparency of the highest order in the
Shipment Industry. This will lead to better trust and cooperation amongst the various stakeholders involved.
 Blockchain Technology will help in cutting down costs to a large extent. As mentioned in the case, paper based
documentation was contributing 20% of the physical transportation cost.
 The presence of large number of touchpoints across the supply chain was also leading to inefficiencies in information
flow across the supply chain. This was delaying the process by a great deal. Blockchain Technology will have all the
data updated digitally, thus reducing errors and increasing visibility of information.
 The Global Trade Digitization (GTD) Platform that Maersk intends to create using Block Chain Technology will create
an industry wide consortium facilitating universal data access, accountability and trust.
 Paperless Trade facilitated through Smart Contracts will revolutionize the documentation process, thereby
streamlining the documentation process and speeding up the clearance process.
 Blockchain Technology will ensure data integrity as shippers will be able to post timestamped loads that are recorded
digitally in a decentralized network accessible to all the parties involved.
THANK YOU!!!