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Nine Companies Sign Up for Global Shipping Business Network

Credit: CargoSmart

By The Maritime Executive 02-27-2020 06:03:24

Nine ocean carriers and terminal operators, CMA CGM, COSCO Shipping Lines, COSCO Shipping Ports, Hapag-Lloyd, Hutchison Ports, OOCL, Port of Qingdao, PSA International and Shanghai International Port Group (SIPG), have signed an agreement indicating their intention to become shareholders of the proposed Global Shipping Business Network (GSBN) being established by logistics technology provider CargoSmart Limited. 

The GSBN will be established as a not-for-profit organization that operates and facilitates a secure and trusted data exchange platform for all stakeholders along the supply chain. The consortium will nurture community participation and introduce a wide range of services and applications to streamline operation processes and overall efficiency. To support this vision, CargoSmart will be the technology solutions provider and platform operator for the GSBN. 

In preparation for the establishment of the GSBN, CargoSmart has conducted a number of proof-of-concepts including with eTradeConnect, the trade finance blockchain consortium facilitated by the Hong Kong Monetary Authority (HKMA). The engagement explored ways to improve global trade through enhanced collaboration among shippers, banks, terminal operators and ocean carriers and was facilitated by PwC, with banks and ocean carriers including Bank of China (Hong Kong) Limited, The Bank of East Asia Limited, HSBC, Standard Chartered Bank (Hong Kong) Limited, COSCO Shipping Lines, and OOCL. The proof-of-concept was designed to validate the hypothesis that linking supply chain data with trade finance transactions can provide enhanced transparency, traceability and efficiency for member banks and their trade finance customers.  
 
Under current practice, in order to apply for financing services, companies are required to provide banks with shipping documents for validation, which takes significant time. The proof-of-concept connects two blockchain networks to exchange information under a strong data governance model. With the consent of its customers, banks in the eTradeConnect network would be allowed to access relevant historical records provided by ocean carriers and terminals. Banks would be able to shorten the customer validation process, with a better understanding of customers’ backgrounds and with real-time, credible shipment event data. The proposed solution intends to accelerate the document validation and trade finance process.  
 
In addition, eTradeConnect member banks will be able to leverage trusted data to streamline their trade finance approval operations, improve their risk management, and enhance their abilities to extend credit to small and medium enterprises. It will become easier for borrowers to meet their funding needs and to seize more business opportunities.  

Martin Gnass, Managing Director IT of Hapag-Lloyd, said, “We expect the trusted blockchain platform will accelerate the sharing of verified logistics and cargo data, streamline business operations across the whole supply chain, and create value to each stakeholder.”  

Ding Songbing, Manager of Strategy & Research Department of SIPG, said, “Existing data exchange and practices in the shipping industry do not adequately address all terminal operational details, leading to missed opportunities to improve overall efficiency. With terminal operators being founding members of the blockchain platform, we believe the GSBN will capitalize on new and existing opportunities on the terminal side and expedite digital transformation in the industry.”