4 - 6 minute read
After Maersk, the Danish logistics company, pulled the plug on its blockchain-based supply chain platform last year, several blockchain builders have continued to pursue blockchain applications in the global trade industry. Among these blockchain builders is the Hong Kong-based Global Shipping Business Network (GSBN), a non-profit consortium that focuses on blockchain trade applications. GSBN is optimistic about blockchain as a vital logistics tool in the long term. According to the South China Morning Post, GSBN now runs one of the world’s largest platforms that can be viewed as an alternative to Maersk’s TradeLens.
GSBN’s blockchain platform is permissioned and has strong data governance that allows only authorized parties to contribute and consume shipping-related data. Since the launch of its blockchain-based shipping platform in 2021, GSBN has onboarded significant shipping partners like Cosco, OOCL, and Hapag-Lloyd. The organization has also partnered with terminal operators like Hutchison Ports, SPG Qingdao Port, PSA International, Shanghai International Port Group, and Cosco Shipping Ports. Only two members, German Hapag-Lloyd and Singaporean PSA International, are not based in Hong Kong or mainland China.
“Because of COVID-19, because you have to change the process, I think this is one of the regular use cases of blockchain […] Probably that’s better than NFTs of digital art. NFTs of documents for global trade — this will be the real killer use case.”
In contrast to significant industry firms such as Maersk that have terminated similar blockchain projects, GSBN CEO Bertrand Chen is confident that blockchain is yet to be fully adopted in the industry but may take another decade to achieve. Chen said, “I think for a lot of people, the clear understanding is that this industry has digitized.” He argued that by 2032, global trade would not continue using “pen and paper.” Chen believes that blockchain technology has the potential to help the industry transform in response to supply issues triggered by the COVID-19 pandemic. He said, “Probably that’s better than NFTs of digital art. NFTs of documents for global trade — this will be the real killer use case.”
Chen also suggested that China is taking the lead in blockchain logistics because the country has been investing heavily in the sector. However, he acknowledged that many local blockchain solutions so far have been highly specific to China. He said, “When you throw so much money in one sector because it’s a policy, you’re bound potentially to be able to get lucky.” He also noted that China’s investment in blockchain development would undoubtedly benefit GSBN by generating more potential partners for the firm.
The CEO also stated that the organization has global ambitions and aims to attract more European shipping lines, including Maersk, though such a development might be slightly challenging. Hong Kong has increasingly emerged as a significant Web3 and cryptocurrency hub over the past few months, with the local government taking action to adopt clear industry regulations. Despite a blanket ban on crypto in China, some Chinese government-related firms have reportedly grown interested in crypto investment, with state-owned firms like CPIC launching crypto-related funds in early April.
What does this mean for traders?
The demise of Maersk’s TradeLens platform raises several questions about the efficacy of blockchain in the global shipping industry. However, GSBN’s innovative use of blockchain to facilitate trade among its partners has showcased the immense potential of blockchain technology in the logistics sector. Traders looking to invest in the asset should keep an eye on blockchain’s adoption in the industry and assess its potential for widespread implementation. As Chen suggests, the adoption of blockchain may take time, but the technology’s transformative effects on the industry could be significant.
Despite the end of Maersk’s blockchain-based supply chain platform, there are still promising developments in blockchain’s role in logistics globally. GSBN’s success provides evidence of the immense potential of blockchain technology when used as a tool in the global trade industry. While the adoption of blockchain may take time, technological innovation invariably leads the way to the future. With blockchain’s transformative potential, the logistics industry is likely to evolve sooner than later.