Maersk Chief Digital Officer: Why we are a digital pioneer in shipping

Digital initiatives are popping up all over the shipping industry, but Maersk still considers itself a pioneer via its partnership with IBM concerning the creation of a transportation platform, says Maersk's Chief Digital Officer, Ibrahim Gokcen.

Ibrahim Gokcen, Chief Digital Officer, Maersk Group, on the firm's Capital Markets Day Feb. 20 2018. | Photo: Maersk

Maersk Group believes it is at the forefront of the shipping industry when it comes to rolling out new digital solutions.

During a time in which many new initiatives, partnerships and digital growth houses are sprouting up, and blockchain in particular has become a buzz word in the industry, Maersk believes that its cooperation with IBM is currently the most concrete and clear example of a technology which could become the future ecosystem for shipping, said Ibrahim Gokcen, Maersk Group's Chief Digital Officer, at a press event this Wednesday in Coepenhagen.

This is a pioneer in creating this industry ecosystem and we want people to join us

Ibrahim Gokcen, Chief Digital Officer, Maersk Group

When asked exactly how Maersk and IBM distinguish themselves from others in the industry, Gokcen responded:

"What is really different is for the first time we are actually building and launching products. We have two products that are ready to go to market once we close this joint venture and once we complete the customer test that will be available in the market for people to use. This is the first time. There is no other examples."

It provides Maersk and IBM with an advantage that the Global Trade Digitalization is an actual joint venture with a physical company, says Gokcen.

"These two things are differentiators and no one has done it yet in supply chain. We really want this to become the industry utility and that everybody sees that they don't need to create the same thing, but they can immediately benefit from the scale and what we can bring to the market," said Gokcen, who arrived at Maersk in 2016 from General Electric.

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The platform being developed by Maersk and IBM can in many ways be compared to the App Store where you can download apps to Apple phones, explained CDO Ibrahim Gokcen. | Photo: Marcio Jose Sanchez/Polfoto/AP/Arkiv
The platform being developed by Maersk and IBM can in many ways be compared to the App Store where you can download apps to Apple phones, explained CDO Ibrahim Gokcen. | Photo: Marcio Jose Sanchez/Polfoto/AP/Arkiv

Maersk and IBM's solution is based on blockchain technology among other technologies. It will be a type of open platform that will increase transparency in the supply chain and digitize the paperwork that arises from imports and exports of goods.

The platform targets the network, such as terminal operators, ports and customs authorities as well as other carriers and forwarders. And precisely participation from other parties in the industry is crucial for the platform at a time where Maersk and IBM are not the only ones thinking along these lines, as noted by SeaIntel in an analysis.

How will you convince the industry to use a platform which Maersk helped create?

"We don't expect that every one of those players will line up at the same time. Certain players can move faster which then creates even more momentum for others to join," said Gokcen.

In addition to finishing the establishment of the company, the partners are setting up an industry advisory board with participation from several players than can bring their input to the platform.

Since the news of the creation of a physical company, which will be headquartered in New York, several observers have asked how Maersk will actually make money on the solution. How blockchain and digitalization will ultimately benefit shareholders.

Gokcen was asked this question Wednesday.

Although he declines to detail the calculations that have been made, he compares the idea with software giant Apple's "App Store" in order to show how the established company can make an income in the future.

While Apple owns the platform for iPhone apps, the company has not developed most of the programs itself. Parties ranging from companies to private people can develop their own apps, and when an app is downloaded or purchased, Apple takes a commission on some of the amount paid.

"If you think of that model, there are a lot of similarities even though it might not be the exact same. We have products, which we are rolling out via the joint venture, and there will be projects that others put out because they use our platform," said Gokcen.

"Not a Maersk company"

Maersk owns 51 percent and IBM owns 49 percent of the company which has not yet been given an actual name.

"It is not a Maersk company and we hope that everybody sees it that way. This is a pioneer in creating this industry ecosystem and we want people to join us," stressed Gokcen.

Maersk Group is bringing the industrial knowledge and IBM the technology, which in addition to blockchain is based on artificial intelligence (AI) and the Internet of Things.

The partnership with IBM is part of a total three things that Maersk Group's efforts in digitalization cover.

These concern improving the customer experience, improving costs and productivity and finally developing new sources of income. The IBM partnership is part of the latter category.

Apart from this partnership, several other digital initiatives have been announced in the shipping industry recently.

Port company DP World has announced a cooperation with tech company Oracle to develop an integrated technology platform.

On the container market, France's CMA CGM is also working on several initiatives with measures such as establishing a digital growth house for entrepreneurs.

English Edit: Gretchen Deverell Pedersen

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