Paper documents are easy to forge, frequently lost, and add days to every shipment. Yet they still keep the $25 trillion global cargo trade afloat, with four billion pieces of paper documentation estimated to be in circulation at any one time.

For Bertrand Chen, chief executive officer of Global Shipping Business Network (GSBN), paperless trade is more than an opportunity to modernize analog processes. Crucially, it will enable data to flow more seamlessly across the dozens of intermediaries involved in a single shipment.

As a former Wall Street derivatives trader who had spent a decade in finance, Chen was drawn to the challenge of bringing quantitative finance to global trade – and took a while to get used to GSBN’s business model.

“We set up GSBN as a not-for-profit, which was counterintuitive to me. My entire career, up to this point, had been for profit. I used to always have a P&L number next to my name,” says Chen.

For a platform that exists to accelerate the exchange of data across the shipping industry, GSBN’s not-for-profit consortium structure turned out to be the right decision. “If you have incentives or temptations to monetize data, then people won't want to share the data with you,” explains Chen. “Being a not-for-profit has made it easier to build trust and collaborate with people.”

As the world’s first independent, not-for-profit blockchain shipping consortium, GSBN may seem like an overdue solution to the legacy of paper-based trade. Its blockchain-based technology enables all parties – from shipping lines and customs to banks, buyers and sellers – to rely on a single, tamper-proof source of truth for shipment data. Yet it took three years to set up the entity due to complex regulatory and antitrust approvals.

At the time of inception in 2018, 13 shipping lines and terminal operators with a significant share of global trade had committed to setting up GSBN. Upon incorporation three years later, only eight remained.

Some dropped out after becoming impatient or believing they could build the technology themselves. Others questioned if blockchain would work for the industry once the hype had simmered down. In hindsight, Chen considers the drop-off a blessing in disguise – leaving only those who were able to see the long-term benefits of GSBN’s approach.

“In that moment, it was very painful, but in retrospect, it's much better to have fewer stakeholders with a high degree of confidence and patient capital, than a very large group of stakeholders who might have a greater share of the market, but who do not fully understand what they're getting themselves into,” reflects Chen. “Not everybody needs to see the vision – you don’t need everyone to agree with you to start something.”

After three years of gestation, GSBN finally opened for business in early 2021, during the height of the pandemic. With most of the world locked down and looking for digital solutions, timing was in GSBN’s favor.

That same year, GSBN launched its first paperless solution: Cargo Release. The solution reduces the time for cargo to be released from days to hours by connecting everyone at the port of import to real-time updates, as well as enabling data exchange. With its immediate benefits, Cargo Release rapidly attracted more than 10,000 customers across terminals in Southeast Asia, China, Europe and Latin America.

While Cargo Release demonstrated the effectiveness of blockchain transactions across global terminals, it also revealed how much their operations vary. “It’s quite difficult to scale globally because the operations of cargo release are all different. We learned that each terminal and each location has a slightly different way of doing things. What's important in Shanghai, for instance, is immaterial in Rotterdam,” notes Chen.

For a consortium which “always has a couple of ideas brewing,” electronic bill of lading (eBL) became the way forward – and the product upon which GSBN could build a sizable advantage.

When the market leader at the time, IBM and Maersk’s TradeLens blockchain platform, was discontinued in 2022, Chen had mixed feelings. “While we were now the only platform, the flipside was a sense of fear. If TradeLens changed their mind, were we missing something important?”

Despite major doubts, GSBN pushed through. The catalyst for eBL eventually came in 2023, through global policy support and industry momentum. The United Kingdom passed a landmark act allowing the recognition of electronic trade documents from September 2023. Meanwhile, nine of the world’s top 10 container shipping lines that form the Digital Container Shipping Association pledged to fully adopt eBLs by 2030.

As uptake of GSBN’s eBL surges from a rate of 100,000 in 2023 to 300,000 in 2024, GSBN is eyeing a milestone of one million eBLs a year – a tipping point for widespread adoption.

“I think the biggest misconceptions are that shipping is very slow to change, and it's boring. There's a lot of innovation with real impact on supply chains and commerce – it’s a very practical industry that doesn’t stay still,” says Chen.

Another crucial step after building trusted tools to exchange data is finding out where that data could lead: sharing trusted carbon footprint data to enable the shipping industry to decarbonize, or sharing certificates and other information pertaining to dangerous goods.

“Making shipping safer is a common goal for all these shipping lines. especially with the increased incidence of fires and explosions,” Chen adds. "Safety really is the top priority."

By further tokenizing eBL, new liquidity can be brought to an asset class that used to be trapped in paper. A future direction is extending the financing of commodities across the entire logistics journey – from warehouse to warehouse, and eventually factories.

“For us to get to the next level of one million and beyond, eBL needs to go further than just the shipping industry. Banks need to be involved. Working with HSBC, the number one trade bank in the world, has been great in understanding how we can rewrite trade finance, and how they’re thinking about the next model.”