Use Cases

Global Shipping Business Network to transform the global shipping industry with Blockchain

Description

Shipping is an extremely complex business for shippers, ocean carriers, terminal operators, and other parties involved with shipping ocean freight better visibility and real-time access to information is critical to success. To be able to better plan, gain efficiencies that can reduce the costs, and reduce the risk of disruptions, they need deeper insight into the shipment cycle and real-time access to a variety of information across the extended inland and maritime transport ecosystems.

In 2019, CargoSmart, announced their Global Shipping Business Network (GSBN) blockchain consortium. Nine leading ocean carriers and terminal operators signed a service agreement with CargoSmart to commit to provide resources to establish a not-for-profit joint-venture to accelerate the digital transformation of the shipping industry. The signatories include CMA CGM, COSCO SHIPPING Lines, COSCO Shipping Ports, Hapag Lloyd, OOCL, Hutchison Ports, PSA International, Port of Qingdao, and Shanghai International Port.

The goal for the consortium was to achieve a single source of truth for trusted, real-time sharing of information amongst these parties, using  distributed ledger technology. To bring such a solution to life for the consortium, a collaboration between innovative global shipping and logistics solutions provider, CargoSmart, and enterprise cloud company, Oracle, was critical.

“Together CargoSmart and Oracle have been working on this effort for almost a year. From the outset, the foundation of this approach has been a decentralized, multi-party, fully managed enterprise-grade blockchain network that enables trust, while maintaining confidentiality of the commercial relationships as required by shipping industry regulations,” said Frank Xiong, Oracle’s Group VP for Blockchain Product Development. “Speeding up the deployment of the initial pilot applications based on the platform’s rapid development and integration capabilities, CargoSmart has moved through quick innovation cycles to respond to members’ priorities,” he added.

As a not-for-profit entity (formation subject to regulatory, competition, and antitrust approvals), the GSBN emphasizes the importance of collaboration among supply chain stakeholders to transform the shipping industry. CargoSmart believes Oracle’s permissioned blockchain technology would be a perfect fit as a foundation to enable GSBN members to jointly create and deploy their blockchain applications to accelerate the digitization and standardization in shipping industry.

Benefits & Outcomes
  • Bring visibility into the process to increase trust and simplify tracking
  • Reduce disputes about various fees
  • Simplify and accelerate Bill of Lading updates, increase freight bill accuracy
  • Reduce detention and demurrage times & costs with accurate doc
  • Reduce time to clear customs
  • Reduce ship inspections and turnaround times
Links
Further Info

Increase Trust & Transparency – Lack of transparency between cargo shippers, brokers, and carriers leads to loss of carrier revenue due to inefficient capacity utilization, delays due to manual, error-prone document sharing, “no show” by shippers, and increased transaction cost of brokers.

The solution helps improve existing business relationships with trust and visibility into the flow of documents, goods, and payments by using blockchain to provide a distributed single source of truth.

The original Issues solved:

  • Poor Tracking
  • Lack of Transparency and Trust
  • Delayed Documentation & Disputes
  • Detention & Demurrage Fees
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