Hong Kong’s GSBN looks at global blockchain supply chain ambitions

• Hong Kong-based Global Shipping Business Network (GSBN) now operates the largest blockchain-based platform, which is considered an alternative to TradeLens.
• China and Hong Kong are investing heavily in the blockchain logistics sector to secure a dominant position.

Last year, integrated logistics company AP Møller-Maersk and its partner IBM terminated their digital supply chain solution, TradeLens, because they failed to achieve “commercial viability”. These developments raised doubts about the potential of blockchain technology in revolutionizing supply chain and logistics management beyond cryptocurrencies.

Despite the setbacks, industry pioneers have not abandoned the pursuit of blockchain applications in global commerce. according to South China Morning Post, Hong Kong-based Global Shipping Business Network (GSBN) is now the largest blockchain-based platform. The platform is considered an alternative to TradeLens. The company believes that a blockchain-based future for the industry is still on the horizon, but could take another ten years to materialize.

Blockchain Supply Chain: The Rise of Chinese Influence in the Web3 Landscape

Since its launch in 2021, GSBN’s blockchain-based shipping platform has collaborated with major shipping partners such as Cosco, Orient Overseas Container Line and Hapag-Lloyd. It has also formed partnerships with terminal operators such as Hutchison Ports, SPG Qingdao Port, PSA International, Shanghai International Port Group and Cosco Shipping Ports.

As GSBN currently operates the most comprehensive blockchain platform for collaboration in the shipping sector, the Web3 future for supply chains is likely to be primarily Chinese. Hapag-Lloyd and PSA International, originating from Germany and Singapore respectively, are the only significant players not headquartered in mainland China or Hong Kong.

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GSBN CEO Bertrand Chen explained that China’s significant investment in the industry contributes to the country’s leading position in this field. However, he acknowledged that many current solutions are highly country-specific, establishing connections between provinces or blockchains operating within a single location.

Chen observed that significant investment in a single sector, driven by policy, increases the chances of success. In addition, he noted that China’s financial commitment to this field would be beneficial to GSBN as it would create more potential partners.

GSBN has global ambitions, is seeking to engage more European shipping lines and even hopes to bring Maersk on board one day, although Chen admitted this “could be a bit challenging.”

Although GSBN is the main player, other companies, such as smaller data platforms such as New Zealand-based TradeWindow, are also trying to implement blockchain technology. Several leading logistics companies have been promoting their blockchain solutions, but have yet to see much success.

Companies such as DHL, Kerry Logistics, Deloitte, Kuehne + Nagel, Amazon, JD.com and Alibaba Group Holding have all used or implemented blockchain technology for logistics purposes in recent years. However, many of these companies have been relatively quiet about their blockchain supply chain initiatives in recent years, although some argue that the Covid-19 pandemic accelerated technology adoption.

Lessons learned from TradeLens: Overcoming perceptions and competition

Many industry professionals agree that digitizing documents and processes related to cross-border goods movements results in high costs and time savings. However, the industry’s fragmentation makes it difficult to reach consensus on new technologies and standards.

Goh Puay Guan, an associate professor of supply chain at the National University of Singapore Business School, said: “When we discuss trade documents and the value proposition of reducing the amount of paper used in transactions, there is definitely a cost-saving benefit. However, the challenge lies in getting all companies on board, since the integration benefits can only be realized through a unified platform.”

For Chen and many others, the primary problem with TradeLens was not the blockchain value proposition, but the perception that it was a Maersk product, which could be seen as a potential competitor to other platform users. Chen explained: “The fact that TradeLens was initiated by Maersk, from a business perspective, hindered its growth. This is because some of the customers they needed to attract would say, ‘I don’t trust Maersk.’

Chen further pointed out that he does not believe there was a real threat to user data, and there is no evidence that Maersk exploited or could have exploited data from TradeLens to gain a competitive advantage. Nevertheless, the negative perception affected adoption.

Moving Forward: Collaboration and Shared Standards for Blockchain Success

After the announcement of TradeLens’ shutdown, many agreed that the problem needed to be more specific to blockchain technology. Most importantly, while blockchain applications in the shipping and logistics industry face challenges, they still hold promise for the future, especially if companies can collaborate on shared standards and overcome trust issues.