Power blocks around blockchain seem to have become a trend in the shipping industry after last week’s announcement that French line CMA CGM had signed a memorandum of understanding (MoU) to form a consortium named the Global Shipping Business Network (GSBN).
The MoU was signed during the China International Import Expo in Shanghai by at least eight other industry concerns made up of various carriers, terminal operators, clearing agents, shippers, and logistics service providers.
The idea of the consortium was spearheaded by software developers CargoSmart, and apart from CMA CGM it includes fellow lines Cosco Shipping, Evergreen Marine, Orient Overseas Container Line and Yang Ming, as well as terminal operators DP World and Hutchison Ports as fellow signatories. CMA CGM chairman Rodolphe Saadé stated via Twitter that it was the group’s ambition to “lead this transformation while being closer to our customers and improving our operational performance”.
GSBN’s formation follows mere months after shipping major Maersk and IBM launched TradeLens, a global blockchain solution that was said to have had 94 organisations already participating when it was launched in August. TradeLens had been in development at least since 2016 and proceedings were around the midway mark when Maersk suffered one of the worst cyber breaches in commercial history.
The Ukrainian virus, GoldenEye to some and Petya to others, wreaked havoc through Maersk’s network and affected terminals, routes and services throughout the line’s systems. In one instance the unloading of vessels in the Port of Tacoma, one of the US’s biggest container ports, was severely affected, almost bringing to a standstill the supply chain of everyday consumables like milk and groceries shipped into Alaska. It was just one of many examples of the bedlam that marooned Maersk’s operations because of GoldenEye.
Labour representative for Pacific port workers, Longshore and Warehouse Union official Dean McGrath, said the ensuing havoc forced them to “go back to basics by doing everything on paper”. Ong Choo Kiat, president of Taiwanese bulk line U-Ming Marine, said the cyberattack on Maersk had caught the industry off guard as the Danish line was regarded as a leader in the field of IT security.
He concluded at the time that “shipping is lagging behind other industries in terms of cyber security”. Now, with the news of the formation of GSBN, security susceptibility to hackers preying on shipping appears to have been stopped in its tracks. When news of TradeLens initially broke in January, Maersk CEO Vincent Clerq said the “big thing missing from this industry to digitise and unleash the potential of the technology is really to create a form of utility that brings standards across the entire ecosystem.”
As an example of the amount of red tape and possible exposure to hacking that existed, Clerq said it took 30 people and 200 communications to ship refrigerated goods from East Africa to Europe, amounting to about 20% of the cost of shipping a reefer. He said although initial resistance to secure platform consolidations was to be expected, there was also “a strong push from the end-customer to see this change”.
Whatever resistance may or may not have existed, leadings lines and related concerns appear to be ever eager to coalesce around blockchain power blocks like TradeLens and GSBN.
Although it’s still early days, cyber security clusters have evidently become the norm for the shipping industry.
Representatives from leading shipping lines and related concerns sign the block chain MoU in Shanghai.
