As the project Lead for Blockchain and Distributed Ledger Technology at the World Economic Forum’s Centre for the Fourth Industrial Revolution, I help support the Centre’s mission of developing policy, guidance, and governance for technologies like blockchain. Through the Forum’s global partnerships with governments, corporations, academic institutions, and non-profit organizations, we guide the acceleration of technology and its responsible and inclusive adoption through the frameworks we create.
Organizations throughout the transportation ecosystem are starting to understand the benefits of blockchain initiatives that are formed to solve a common business problem or facilitate improved processes among collaborating businesses.
Every day more and more are recognizing its potential to solve pain points, facilitate automation, create transparency, increase efficiency and boost profit margins.
Organizations throughout the transportation ecosystem are starting to understand the benefits of blockchain initiatives
Large carriers and different industry groups have come to us saying, “we’ve done the proof of concepts, we understand the value of blockchain technology, but we also now understand that we can’t do this by ourselves. We have to work with our competitors.”
But at the same time as organizations are starting to see returns from blockchain, CEOs are also realizing that collaboration around blockchain throughout the shipping industry and from end-to-end of the global supply chain is essential to ensure full and fair adoption of the technology.
Shipping lines, BCOs and all players within the ecosystem need to come together and contribute for it to reach its true potential
So, people are starting to understand that now and for the future that blockchain needs a minimum viable ecosystem: It’s a distributed technology; the default nature of this technology is that more than any other emerging technology, blockchain requires the ecosystem to work together. It’s a distributed nature. Engagement is peer-to-peer and shipping lines, BCOs and all players within the ecosystem need to come together and contribute for it to reach its true potential and be of value for all participants.
The World Economic Forum, which is committed to improving the state of the world, is the international organization for public-private cooperation. The Forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas. As the global platform for interaction, insight, and impact, the Forum focuses on the effective and ethical deployment of innovation for the benefit of a global society.
In the context of pressing regional and international challenges, the agile development of policy norms and frameworks and the application of these innovations are urgently needed. Emerging from these collaborative actions, the World Economic Forum decided to spearhead an initiative guiding greater collaboration on global blockchain consortia in shipping and other industries.
In 2018, we observed a shift in mindset in the shipping industry from protective, silo-thinking towards a willingness to try new collaborative models. TradeLens, Global Shipping Business Network (GSBN), Blockchain in Transportation Alliance (BiTA), Digital Container Shipping Association (DCSA) and other associations are firsts for the industry.
Beyond the shipping industry, the world’s four largest agriculture companies, commonly known as ABCD, have partnered to digitize international grain trading. Sharing and collaboration with blockchain are required so that proofs-of-concept, standards, and solutions can be adopted at “ecosystem-scale” and unlock the potential that distributed ledger technologies has to offer.
Governance is required to achieve this deeper collaboration. That will accelerate blockchain by encouraging interoperability and solidifying standards that improve accessibility—especially to developing countries and smaller organizations.
While the rewards of collaboration will be great, agreeing on what constitutes a fair and well-designed governance system, let alone a joint blockchain platform, poses challenges. The transportation industry has a very complex stakeholder landscape. You also have multiple jurisdictions because it’s cross-border. And traditionally, in this industry, there’s a lack of willingness to share data. Many industry collaborative initiatives have fallen apart.
To increase the likelihood of success and thereby maximize the benefits of blockchain along value chains, we launched the “Blockchain is a Team Sport: Making Blockchain Consortia Work” project to foster impartial industry and ecosystem-wide blockchain collaboration.
The goal of the project is to create a framework to guide industries like shipping to reach consensus on what constitutes fair, neutral and robust consortia governance—in terms of rules, cost allocation and intellectual property—and what makes for a joint industry blockchain platform that’s well-designed, so it is sustainable.
The World Economic Forum occupies a unique point on the public and private intersection, playing a singular role as convener of stakeholders
Our governance frameworks take different forms starting with formal regulation and policies that we help to shape. We also use less formal ways of shaping and accelerating technology responsibly. These include published protocols or norms, standards, settings—or in the case of this project—toolkits that countries and other entities can open source and get in the hands of industry-makers who can use them to determine how the technology is deployed.
In our work on this and other projects, we take a multi-stakeholder approach that leverages committed partnerships with governments and companies around the world. The Forum occupies a unique point on the public and private intersection, playing a singular role as convener of stakeholders representing important industries and pressing initiatives and driving insights and impact.
We’re bringing together entities with experience in blockchain industry consortia as well as competitors and parties upstream and downstream of the ecosystem who are impacted. Together we’re co-developing and designing the framework to reduce missteps and embed best practices into consortia formation.
The important thing to mention is that it’s a co-design effort. Our project teams, more than 60 organizations, commit to give input and help shape the framework. We have big and small tech companies. We have startups as well as Fortune 500s. We have international organizations like Hitachi and the World Food Programme. And we have offices around the world, including in the United States, India, China, and Japan.
By involving a wide range of experts and perspectives, we encourage, empower and educate those players who otherwise might not necessarily have access to the information that the big players have, which tips the leverage point.
To get there, our team follows a methodology used to develop and scale technology frameworks for everything from AI and machine learning to drones and blockchain.
Each project starts with a design and scoping phase to identify the governance gaps. My team and I co-design with different experts who bring their experiences to bear on the project. After that, we pilot it. In this case, committed partners will go through the actual real-life situation of deploying blockchain technology, using our framework. They’ll provide feedback throughout an iterative pilot process. After that, we scale. It’s a done product that is open source and gets scaled to help shape the way that blockchain is deployed internationally—the same way our frameworks are helping accelerate other technologies around the globe.
Simplifying industry collaboration and fostering collective efforts has the potential to reshape shipping and redefine global trade
In recent years, the Forum worked with the Rwandan and Swiss government to develop and scale a new type of regulation (performance-based regulation) that could enable more diverse and impactful uses for drones; including the delivery of urgent medical and blood supplies. This experience led to the creation of the Advanced Drone Operations Toolkit now being used to scale performance-based regulations across the globe.
Great things are possible when the World Economic Forum’s expertise, methodology and global connections come together to co-develop and design governance frameworks. In the case of blockchain, simplifying industry collaboration and fostering collective efforts has the potential to reshape shipping, redefine global trade and bring everyone in the transportation ecosystem into the game.
Follow my team’s work at the Center for the Fourth Industrial Revolution and access the Making Blockchain Consortia Work toolkit when it becomes available by visiting our Blockchain and Distributed Ledger Technology platform page.
The global acceptance of eBL is in motion, how can MLETR and other legislative initiatives help?
We sat down with senior global trade experts, Diana Jones, Director of Solution Architecture, and Juanjo Ruiz, Strategy and Business Development at TradeLens to discuss the proliferation of electronic bills of lading (eBL) and the disruption of blockchain as an emerging technology with a substantial opportunity to support banks with unlocking a $3.4 trillion trade gap in the trade finance market. The following is a Q&A on these topics.
Bangladesh/Hong Kong – Citi Treasury and Trade Solutions (TTS) Asia Pacific has completed its first pilot paperless trade finance transaction using the TradeLens platform. Leveraging blockchain technology supplied by TradeLens, the pilot illustrates the effectiveness of the technology to improve supply chain efficiency by significantly reducing document processing lead times.