Data management, digital identities, energy, E-voting, real estate and even cannabis, distributed ledger technology (DLT) aka blockchain has its presence in every area of life that we can think of. As of now blockchain has yet added another realm, to its already conquered areas, which is the shipping world. The Maritime Executive, famous maritime and marine related news source, reported on November 6 that a Memorandum of Understanding was signed between nine major terminal operators and shipping companies to launch a distributed ledger technology (DLT) based open platform.
The objective of the MoU was to form a group to develop a blockchain alliance, among the shipping industry, which was named the Global Shipping Business Network (GSBN). It was signed by the top shipping operators which included ocean carriers CMA CGM (Maritime Freighting Company – General Maritime Company), COSCO Shipping Lines, Evergreen Marine, OOCL (Orient Overseas Container Line), and Yang Ming; terminal operators DP World (Dubai Ports), Hutchison Ports, PSA International (Port of Singapore Authority) and Shanghai International Port; and software company CargoSmart at the China International Import Expo Shanghai that took place on November 6.
Processes involving handling of shipping documents are very complex and include paper based steps that affect stakeholders across countries. Information in the shipping world is mostly shared in many formats such as online forms, emails and Electronic Data Interchange (EDI). As a result a single shipment, on the average, can involve more than thirty documents which are exchanged by stakeholders and that too with multiple revisions owing to human errors before it departs from its port.
Global Shipping Business Network provides a platform to the stakeholders including customs agencies, shippers, carriers, terminal operators and logistics service providers to digitize their supply chain. Disputes, late penalties from customs agencies can be avoided due to the blockchain documentation platform which results in better management of detention and demurrage costs. The company developing the project estimated a sixty five percent reduction in the total amount of time which is required for collecting, consolidating, and conforming data from multiple participants and handling data which is repetitive in various documents by leveraging its distributed ledger technology document solution. Andy Tung, co-chief executive officer of Orient Overseas Container Line Ltd, said,
With the vision of a truly open blockchain platform for the industry, the GSBN will be key to the success of establishing a sustainable blockchain ecosystem for all stakeholders in the supply chain. OOCL is very excited to be a part of this highly collaborative environment that can facilitate the cross-pollination of ideas towards even more innovative business models and solutions for our customers.
The article stated that the formation of the blockchain group was started by CargoSmart which is a Hong Kong based company specializing in shipping and logistics.
The Global Shipping Business Network will be developed by employing big data analytics, Internet of Things (IoT), artificial Intelligence and distributed ledger technology. Initial application will allow the participants to automatically connect with relevant parties and digitize and organize their dangerous goods to organize the approval process. GSBN is scheduled to be available in December this year. Chief Executive Officer of CargoSmart, Steve Siu, while talking about the company’s project said,
Providing a solution for supply chain parties to auto-fill repeated and verified information can dramatically increase data accuracy and efficiency for the whole logistics process.
The initiative of the stakeholders signing the MoU is a direct competitor to the IBM/Maersk TradeLens project which has signed up more than twenty port terminals. However apart from Maersk and its offshoot Hamburg Sud, the only other carrier is Pacific International Lines. A combined market share of 22.8% is possessed by the three carriers as compared to the 30.3% of GSBN group. Similarly Keuhne + Nagel, largest shipping freight forwarder in the world, is working on a distributed ledger technology (DLT) initiative with Accenture. Port of Singapore Authority (PSA) is taking part in both TradeLens and GSBN along with partly owning the Open Trade Blockchain (OTB) launched four months ago.
To conclude, all these organization working to incorporate DLT technology, highlights what functionality and advantages blockchain has brought to the supply chain management systems. with all these developments picking up the pace and newer use cases being explored everyday, everyone has this question on their mind, What’s next?