Why digital standards matter in global trade
Headlines reporting supply chain disruption have been all too frequent in recent times. Port congestion, ...
Global Shipping Business Network (GSBN), the ‘Chinese blockchain’ for shipping, is testing its cargo-release systems with Hutchison Ports ECT in Rotterdam, in collaboration with Cosco, OOCL and SUMEC.
GSBN is Hong Kong’s answer to Maersk and IBM’s TradeLens. The aim is cutting down on paperwork, speeding up processes and increasing the security of containers that have proven easy to steal, critics argue, thanks to a simple PIN system at many European ports.
For example, in 2018, thieves made off with two containers full of cobalt briquettes, at that time spiking in price at almost $94,000 per tonne. Truck drivers simply gave the correct pin and drove off with more than $2m of cobalt.
GSBN CEO Bertrand Chen, told Global Trade Review PIN codes were often exchanged in e-mails and were very insecure.
“It’s not a great system to track who’s supposed to pick up the container. In Rotterdam, the port authority has a different system to verify information, but the exchanges between shipping line, terminal, freight forwarder and the customer are often very rigorous. There’s no authority to say this document is correct, or that release is to the right person.”
Blockchain will address this risk, advocates say, by implementing an append-only ledger system with a distributed framework – one which is held by several ‘nodes’ at once, requiring consensus from each for changes to be made – which, they believe, will make it impervious to hacking.
“In Asia, most of the value is switching to no paper,” Chen said. “In Europe, I think that transition has happened already – they did that using EDI [electronic data exchange]. The key risk in Europe is more about security, ensuring the cargo is released to the right people.”
However, there are concerns with interoperability which need to be addressed, experts said. Last month, Digital Container Shipping Association CEO Thomas Bagge told The Loadstar: “…if you have a shipment that is changing hands, you need to have technical interoperability. Suppose [a shipping line] is sitting on GSBN, shipping to a US consignee using TradeLens – this requires both parties using either GSBN or TradeLens. So, there is a technical interoperability there.”