Over the last two weeks, a lot of ink has been spilled on what the DeepSeek R1 model means for the state of AI. Nvidia stock took a beating, and internet learned about Jevons Paradox, CUDA and PTX. Marc Andreessen captured the mood by calling this “AI’s Sputnik event”.

Instead of framing this merely as a milestone in the AGI race between the U.S. and China, my takeaway is rather that the best AI models are no longer closed. Instead, any start ups can leverage open source AI models to build applications adapted for specific verticals. Those models are also much more efficient. 

I believe the shipping industry would benefit a lot from those powerful models deployed across the world. However, like many other disruptive technologies previously, it will take a long journey for this technology to diffuse and be adapted for the specific needs of this industry. 

At Global Shipping Business Network (GSBN) , a not for profit blockchain consortium dedicated to digitalizing the shipping industry, I have experienced firsthand the ups and downs of this long adoption cycle. Below are the lessons I have learned from our journey thus far. 

I believe they might serve as a guide for how to avoid the traps in pushing for digitalization in this industry and what opportunities might lay ahead.

Find the killer app

From all the blockchain projects I got involved with, I have seen two main reasons for failure.

First, it is really hard to collaborate within a consortium. Most blockchain projects started as an attempt to build a common digital infrastructure and allow an entire industry to digitalize its processes together to realize more value for the end customers. On paper, the consortium path makes a lot of sense, as an initial group of representative members from the industry is required to kickstart the project. However, consortia typically will get bogged down with governance issues and decision making is excruciatingly slow. Often, initial members have different objectives or views on how to achieve those objectives. This is the main reason many bank consortia (we.trade, Marco Polo etc…) aiming to digitalize trade finance folded over time, because they could not make decisions fast enough to lead to meaningful progress, and simply ran out of money.

The second reason is that there are not that many use cases where blockchain is actually essential. Most of the shiny use cases only have a component of blockchain. Instead changes in behavior and business incentives are much more important for adoption to truly take off. For instance, one of such use cases in the supply chain was visibility. Visibility is a pain point that every customer will mention, and it became very prevalent during the pandemic, with the added disruption. However, there is a general lack of willingness to pay for simple visibility as customers feel this should be part of the transportation service. Although adding blockchain can create trustworthy visibility, it did not create enough value to justify the added cost. 

As for GSBN, we were very lucky to have incorporated in 2021. One of our key early decisions not to focus on visibility at all proved to be critical. This decision removed the pressure to build a large network as any visibility solution would have required us to do so. This gave us the runway necessary to experiment. We had some early success with Cargo Release, but we struggled with Earliest Receiving Date (ERD App). 

The ERD App was predicated that Consignees, Terminals and Carriers were struggling to agree on a true ERD date, which then impacted the Detention & Demurrage charges. This led to a key provision in the OSRA 2022 implemented by the FMC. The reality was that this was much more a business incentives problem rather than a trustworthy data exchange issue. We quickly paused all ERD App development. 

Lesson learned: focus on use cases that truly leverage the unique value of your technology. 

Being early is same as being wrong

As I have learned from my first days on the trading floor, it is not enough to be right, you also need to have the perfect timing!

At the beginning of 2023, DCSA Members signed their commitment to 100% eBL adoption by 2030. BIMCO pushed similarly for 25% adoption by 2025 for its members in the Bulk world. In September, King Charles enacted the Electronic Trade Document Act into UK Law.

Suddenly all the stars were aligned, and the killer application leveraging blockchain became obvious to all: the electronic Bill of Lading. 

Why is eBL such a big deal for shipping digitalisation? 

Bill of Lading is the most important document in the shipping industry, because it allows the transfer of title for the Cargo. It is also an essential document for Letter of Credit in Trade Finance. Merely exchanging a pdf of BL is not enough to satisfy the unicity and security requirements of an eBL. Blockchain is truly required for this use case.

However, there are additional values to be created beyond merely digitizing a document. eBL has the opportunity to play the role of Data Container and facilitate smooth data sharing between all the parties involved in a shipment, including banks, insurance, and customs. Entirely new interactions and services can be created on the basis of eBL, marrying the physical, financial and regulatory supply chain. You can read more here.

Come for the blockchain. Stay for the network.

As volume keeps growing, we are now expanding our network and doubling down on leveraging blockchain to build extension capabilities and drive eBL adoption. 

For instance we launched in January the GSBN Verification Services, which allow any user to verify data about an eBL generated on GSBN, without requiring anything. 

We are also collaborating with leading solutions providers (ICE CargoDocs and IQAX eBL) on enabling full interoperable eBL by playing the role of Control Tracking Registry.

Lastly the International Group of P&I Club (which ensures that Carriers are insured for their eBL) recently approved this legal framework in a landmark decision.

Besides merely augmenting the functionality of eBL, I believe there are also big opportunities to create completely new value uniquely possible with eBL. 

First, payment linked to title transfer. 

It is becoming increasingly clear that the killer application emerging from the world of cryptocurrencies is stablecoin. As the Trump administration crypto czar David Sacks has established a USD stablecoin legislation as its first priority, I believe cross border payment will be the sector that will be disrupted the most. 

There have been Central Banks endorsed pilots over the years with mBridge, crypto native Tether and USDC, but we are about to see a much more seamless digital payment experience for corporates. The best use case in my opinion is to completely change the user experience of the yearly 25 trillions USD global trade, by enabling an instantaneous atomic swap between payment and title transfer of eBL.

Secondly, an immutable record of transactions pertaining to a single shipment. 

This is where blockchain will meet AI.

As more and more activities related to shipping gets digitalized and then automated with AI agents (I should probably trademark DeepLogistics), there will be the need for a distributed system of record of all the various handshakes that happened for a given shipment. Without such a system, how would disputes between AI agents be resolved? 

I believe the eBL as a Data Container is ideal for such a task. For every single shipment there is a tamper proof record of all the interactions between participants involved in the shipment. With a proper access control, every participant gets to see data from primary trusted sources.

With blockchain and AI scaling up, the way global trade will operate could become unrecognizable in a couple of years. 

Throughout my journey at GSBN, I am often reminded of this quote from Thomas Friedmann.

I hope I have convinced you to be a little bit more optimistic.

Announcing other posts

As I have written in my original post this year, I need to spend more time this year to spell out my vision on how the digital transformation of this industry will play out as we are hitting an inflection point for eBL adoption.

My main goal is to share our learnings and also get feedback from the industry. Also, I look forward to collaborating with other like minded optimists to come and leverage GSBN platform and network to extend their use cases.

In the next few posts, I will go deeper on what eBL as a Data Container would actually mean for each role in global trade. 

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