IBM and Maersk Logistics provide real-time cargo monitoring for global supply chain optimization

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Armonk, NY, 20 September 2005 — IBM and Maersk Logistics, of the A.P. Moller-Maersk Group, announced today an initiative to bring real-time, enhanced visibility to global supply chain operations by improving the quality of container tracking, thus providing greater security for transported goods. The solution includes highly intelligent wireless tracking devices and an advanced technology network for use by manufacturers, retailers, logistics providers, carriers, and governments to share real-time cargo information.

Joint development IBM and Maersk Logistics brought together research, business consulting and engineering teams, along with technology experts and internal specialists in the field of customs, ports and border management, supply chain management and transportation. The solution incorporates IBM's industry-leading hardware and software technologies alongside Maersk Logistics' global supply chain expertise. These organizations have integrated two key emerging technologies for the first time:

• Intelligent real-time tracking devices called TREC (Tamper-Resistant Embedded Controllers), which are fitted to cargo containers and designed to withstand the environment they operate in. Unlike typical passive tags that merely collect data, the wireless TREC devices incorporate significant processing power, enabling them to receive and send data instantly. The devices, which are currently being developed at IBM Research - Zurich, automatically collect information on each container, including its physical GPS location, as well as parameters such as temperature, humidity and sensory readings to detect intrusion.
• A fully integrated network that combines data from the TREC devices with a non-proprietary sensor network and business integration system. This network eliminates manual processes, and grants accredited supply chain participants access to relevant data. The information gathered can be connected to decentralized databases where each participant owns its own content. A service-oriented infrastructure allows users to share information instantly.

This leading-edge solution will provide global supply chain stakeholders with on-demand access to real-time, transport-related data. The solution supports the implementation of the novel World Customs Organization's (WCO) Framework of Standards to Secure and Facilitate Global Trade.

"IBM's objective is to enable globally integrated business by capitalizing on the information generated during the tracking process and at the same time improving the security of cargo," says Mogens Roedbro, Partner and Vice President, IBM Business Consulting Services. "This initiative, which IBM refers to as Intelligent Trade Lane, is part of our broader Global Movement Management effort designed to address the critical business functions involved in efficiently and securely moving people, goods and conveyances within and between countries."

"Security and supply chain optimization are key focus areas for our clients today," explains Henrik Ramskov, Managing Director, Maersk Logistics. "The capabilities of the TREC device and network eliminate the time lag of the physical container status to provide real-time visibility. This provides new opportunities for truly adaptive planning while also maintaining data quality. This enables effective decision making and supports supply chain agility. Combined with Spective, our business intelligence solution, we will further enhance our clients' customer service levels while reducing the costs of achieving these."

"Some of today's shipping logistics involves enormous levels of complexity, dated processes including lengthy paper trails, and limited levels of security," says James Rice, Director, Integrated Supply Chain Management Program, Massachusetts Institute of Technology. "The ability to create an environment where all supply chain participants have real-time visibility while also leveraging industry standards will eliminate some of this complexity. The IBM and Maersk initiative offers a promising approach for a more truly resilient and secure transborder supply chain."

To ensure that the solution is ready for commercial application next year, IBM and Maersk Logistics are currently involving key supply chain stakeholders in a formal pilot. Phase one field testing will begin in early November 2005, followed by a large commercial pilot in March 2006.

About IBM

IBM's Intelligent Trade Lane improves the quality of maritime shipping services and increases the security of transported goods. This is the first offering to result from IBM's Global Movement Management initiative, which is designed to address the critical business functions involved in moving people, goods and conveyances efficiently and securely within and between countries. Through the use of integrated business processes and innovative technologies, IBM is engaging a wide range of businesses and government organizations around the world to develop solutions that improve the flow of information, commerce, and travel.

Intelligent Trade Lane is an example of how IBM is enabling businesses to become on demand. It is also an example of IBM's global effort to leverage the $500 billion business performance transformation market opportunity - where companies look to external vendors, such as IBM, to transform business processes and improve business performance.

IBM is a leader in helping businesses and organizations innovate. As the world's largest information technology and consulting services company, IBM and IBM business Partners offer a wide range of services, solutions and technologies that enable customers-large and small-to take full advantage of on demand business.

About Maersk Logistics

Maersk Logistics is a recognized leader in the international logistics market. It provides customized solutions for integrated supply chain management, warehousing and distribution, customs house brokerage, air freight, as well as NVOCC services through their subsidiary DSL Star Express.

Maersk Logistics is continuously developing a range of state-of-the art information solutions customized to each customer's needs. The solutions allow customers to track and trace merchandise and to analyze in detail how to optimize every part of the supply chain.

Spective is Maersk Logistics' supply chain visibility, event management and business intelligence solution. Spective provides a single, online access point to end-to-end supply chain information from the manufacturing process to the distribution order, allowing clients to run the most connected, efficient and responsive supply chains possible. Spective combines world-class technology with Maersk Logistics' global supply chain experience and operational capability to deliver business solutions that raise the level of confidence in and control of clients' supply chains.

Part of the A.P. Moller-Maersk Group, Maersk Logistics has more than 100,000 employees in more than 125 countries around the world. In addition to shipping and logistics, the A.P. Moller-Maersk Group is engaged in the exploration and production of oil and gas, shipbuilding, industry, supermarkets, and IT services. For further information, please refer to the Maersk Logistics Web site at www.maersklogistics.com.