The world’s largest shipping companies, with up to one-third of the market, have joined the GSBN blockchain project to make shipping faster, cheaper and more secure.
Thanks to the adoption of blockchains, global logistics is undergoing a technological revolution right now. Increase in global trade volumes by 15%, reduction of processing time from several days to 1-2 hours, decrease in financial reporting costs by 70%, increase in transport safety and transparency. This, very briefly, is the outlook for global logistics in the transition to blockchain technology. It is enough for the industry to replace the information carrier in order to achieve these growth rates, — pilot projects signal this.
In March 2021, China’s eight largest shipping companies joined the Hong Kong-based independent Global Shipping Business Network (GSBN) consortium — a blockchain-based platform for tracking cargo. This resulted in a number of experimental solutions implemented in recent years around the world.
Step into Economy 4.0
Antwerp, one of the largest European ports, implemented its blockchain-based pilot project to automate port logistics in 2017. The Danish shipping company Maersk Line has created a joint venture with IBM to provide its clients with blockchain-based logistics services. In 2020, Shanghai-based company Cosco Shipping, which has one of the largest merchant fleets in the world, tested the corporate blockchain Ant Financial and discovered that the time to process supporting documentation was reduced from 2-3 days to 1-2 hours. And it became one of the founders of GSBN.
According to analysts, the implementation of the digital economy into modern industry will lead it to the 4.0 industry state, which will be characterized by the use of Internet communication as a central element in the operation of production systems. Transport logistics is one of the founders of this transition, an example of which is particularly evident in the optimization of business processes.
The supporting documentation, once it’s uploaded into the system, becomes available to all participants in the trading chain. As a result, there is no need for its physical handover from one transfer participant to another. Blockchain is a perfect solution for ensuring the secure transmission of commercial information contained in supporting documents, giving trusted participants real-time access to the data. Blockchain-based smart contracts provide the ability to manage accounts and payments, allowing users to automate billing and payment processing. This eliminates the need for intermediaries, and acquires high reliability and accuracy.
Of course, this technological transformation also has its weak points. Although blockchain reduces transaction costs, it is quite expensive to create, deploy and implement such a large-scale system. The obvious technical weaknesses are vulnerability to attacks used in the digital economy at the network level (hacking, Eclipse attack, etc.), at the user level, or affecting the blockchain’s integrity (51% attack).
However, these challenges are under control, and today the implementation of this technology starts in the world with the creation of projects that can extend its application to the widest possible client audience.
GSBN — with a focus on leadership
Created for eight major shipping companies, the GSBN, an independent and non-profit technology consortium, is guaranteed to serve the fleet that transports every third container worldwide by sea. Since launching, the consortium has expanded its partnerships to Oracle, Microsoft, AntChain and Alibaba Cloud. One of the latest news is the rollout of the technology across Southeast Asian ports.
GSBN underlying blockchain network uses the Oracle Blockchain platform on Oracle Cloud, which functions as a distributed ledger. Microsoft Azure is used for Southeast Asia and AntChain is used for China deployments.
As a result, the aggregate of enterprise blockchains controlled by GSBN allows disparate and even competing market participants to collaborate. A step into the technology of the future has already been taken, the rest of the world can only follow the path that has already been paved.