Bertrand Chen, the Global Shipping Business Network (GSBN) CEO, believes now is the optimal time for the shipping sector to digitize. Backed by three of the world’s biggest shipping container lines and multiple major ports, the blockchain digitization network was incorporated earlier this year in Hong Kong. So far, the non profit technology consortium has launched its first application for cargo release and announced a collaboration with numerous banks to explore trade finance.
Chen highlighted that the tragedy of COVID-19 has had a silver lining for shipping lines. The stock price of one of its members, COSCO, is more than four times higher compared to the start of 2020. Another member Hapag Lloyd has almost trebled its market cap in the same period. Container shipping costs are higher still, with the world average cost of shipping a container surpassing $10,000 compared to less than $2,000 at the start of 2020.
A normally tight margined business is suddenly flush with money. The companies could buy back stock, invest in environmentally friendly new ships, or explore innovation. Compared to these alternatives, Chen argues that the costs of digitization are comparatively small with a substantial payoff.
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