Global trade is systemically important to the world’s economy. In 2021, it represented $28.5 trillion. Yet, it hasn’t evolved along with the digital transformation of other industries.
Perhaps that’s because evolution seems like an insurmountable task. Processes are complex. Documents and information flow continuously — but asynchronously — between parties across the globe. Many processes still rely on paper and legacy systems.
This lack of digital, on-demand data makes it difficult for the shipping sector to respond to global events, like the COVID-19 pandemic in 2020 or the supply chain disruptions in 2021. In short, existing global trade processes aren’t efficient nor resilient enough.
GSBN wanted to remove barriers and friction in global trade. And it thought using blockchain could make that happen. Blockchains can span the globe and provide one standardized source of immutable data to all users in real-time. This helps prevent disputes and improves efficiency.
It was an appealing idea. But a solution to bring a traditional industry still relying on paper into the next digital era would take more than appeal. It had to be secure. It had to protect privacy. It had to work.
Could it?
Recent years may have brought global trade inefficiencies to the headlines, but the industry knew about the challenges already. A few port and shipping groups began discussing these challenges — along with the risks of doing nothing — in 2018. The choice became clear: face an industry-altering digital disruption, or help their industry create a better future for their customers and themselves.
These industry leaders chose the latter, joining their forces to speed up the digital transformation of the shipping industry. But to transform an industry, they’d need collaboration within the industry. And for collaboration, they needed to address some of the industry’s major concerns: privacy, trust, and incentives alignment.
Blockchain networks can ensure privacy and protect data. But the founders didn’t want to build a mere data repository for the industry.
They envisioned a trusted data exchange. Data would come from trusted sources. Users would contribute and access data facilitated by the platform however they saw fit, while retaining the control of their own data.
Immutable records would enable trust in the data, but that wasn’t enough. For this transformation to work, industry users would need to trust more than the data. They needed to trust the entire solution.
The leaders understood their competitors might be skeptical of a data sharing platform launched by major industry players. To overcome the skepticism, they needed to show fair and representative governance. And they needed a business model that accommodated the competitive nature of the industry.
They decided to create an independent not-for-profit consortium called Global Shipping Business Network (GSBN).
“Just like electricity transformed industries and rewired businesses, data is the fundamental resource to power digital transformation,” says Edmund To, Chief Technology Officer of GSBN. “We need a new digital utility infrastructure ‘grid’ to enable data sharing. As a digital utility infrastructure, GSBN’s goal isn’t profit, but rather increasing global trade powered by the platform.”