STANDALONE REPORTGLOBAL STANDARDSMAPPING INITIATIVE 4.0
NOVEMBER 2023
SUPPLY CHAINGLOBAL BLOCKCHAIN
BUSINESS COUNCIL
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GSMI 4.0 IN-DEPTH REPORT

SUPPLY CHAIN
GSMI 4.0 IN-DEPTH REPORT

SUPPLYCHAIN
EXECUTIVE SUMMARY
Most people didn’t really focus on or even take note of what is referred to as the global supply chain
until the Covid pandemic, when they weren’t able to get goods that had always been available tothem, virtually instantly. The global supply chain is actually made up of millions of entities that make,buy, sell, move, or, in the case of entities like customs organizations, even clear items to move out ofor into a country. We will go more deeply into this throughout this document, but for now let’s startwith what would initially appear to be a very simple example:

Maria ordered a birthday present online
A simple online order can be much more complex than it appears.
••••

If it actually comes from a different country, it needs to clear customs.
It may take much longer than anticipated to ship, so it wouldn’t be delivered until after thebirthday party.
Because of the delay, she’d have to buy a replacement birthday present locally.
Now she needs to work through the details to return the original present.

Now, a simple online purchase has potentially turned into an ordeal that is requiring Maira tojump into the details of cross-border movement.
•••

It took a dozen or more steps, and multiple entities, to get the shipment to Maria, which
she had no visibility of.
It also had to clear customs, which includes documentation she was unaware of.
Now to return the birthday present and get her money back, she has to reverse a process
she didn’t know even existed.

Ultimately, stating that ‘Maria orders a birthday present online’ gets us to 50+ steps along theway, with multiple underlying processes and corresponding data points.: If and when she
decides to return her order, a reverse supply chain process retraces all these steps, working
through all the details of the same complex, multi-step, and multi-party process backwards.

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GSMI 4.0 IN-DEPTH REPORT

SUPPLY CHAIN

Figure 1: Complexity of today’s global supply chain

As shown in the image above, the complexity of the global supply chain highlights a need forharmonization of processes and alignment of stakeholders. Beyond digitizing global supply chains,
we need open-source standards to facilitate collaboration and reduce frictions. For digitization
to scale we need a common data language and standards that all can use whether the largest
companies, or the smallest.
This paper discusses the state of global supply chains today, defines the problems, and outlines
solutions as enabled by emerging technologies to foster a Web3-enabled global commerce built oncommon standards. We feature specific business use cases of technology solutions, and ultimately
emphasize the importance of common standards as a key underlying factor.

THE GLOBAL SUPPLY CHAIN
Global commerce involves multiple players, jurisdictions, and processes. The ‘global supply chain’
today refers to the intricate network of literally millions of interconnected organizations, processes,
and resources involved in producing and delivering goods and services on a global scale. A typicalexample could span multiple countries and continents, with each participant playing a specificrole in the production, distribution, and delivery of products to end consumers. This network of
stakeholders collectively converts basic commodities or raw materials (upstream) into finishedproducts (downstream) for delivery to end customers, with financial transactions and data being
exchanged at each stage.1

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Table 3 courtesy of New America. View the original here.

Global supply chains encompass various stages and entities, including:

SOURCING

Acquiring raw materials, components, or services
from suppliers around the world

MANUFACTURING

Transforming raw materials and components into
finished products

DISTRIBUTION

Storing, transporting, and managing inventory
throughout the supply chain

CLEARANCE BYREGULATORY AND
CUSTOMS AUTHORITIES

Government agencies responsible for enforcing
trade regulations, tariffs, and customs
procedures, for both export and import into eachcountry involved

RETAILING

Selling products to end consumers throughvarious channels, such as physical stores,
e-commerce platforms, and more

Every step of these processes has documentation to establish necessary checks and balances
including movement, payment, and applicable Customs duties and taxes.
Global supply chains are essential for virtually all industries, enabling companies to access costeffective resources, expand their markets, and optimize production processes. However, they also
introduce complexities and challenges, such as logistical issues, regulatory compliance, and theneed for risk management.
This all started with ‘trade’ by the Phoenicians, the Indus Valley trade, Egyptians, Silk Road, andRomans, as far back as 15,000 BCE (‘Before Common Era’). Methods of movement were limited
to the tools and innovations available at the time, including ships for maritime trade, overland
caravans for land-based routes, and river transport, where applicable. The choice of transportation
method depended on geographical factors, available infrastructure, and the nature of goods being
traded. In the same way, supply chains today are shaped by the technology available which shapes
all facets of the lifecycle of the physical movement of goods, records of those movements, andcorresponding transactions.

Modes of Transportation‘Movement’ of goods being traded gets us to ‘mode’ (initially, overland caravan or ship, and, later,
rail, road, air, etc.), and as additional modes were developed, especially with highways and air
movement, we quickly get to speed. Finally, once multiple speed options exist, and increased
technology like the internet, deeper fragmentation has occurred to create Business-to-Business(B2B), Business-to-Consumer (B2C), and other similar areas of focus and types of commerce.
Global supply chains have been foundational to the millennia of human civilization, and they
are continuing to evolve today with technology and innovation that enable different modes oftransportation. Today, the main modes of transport are ship, rail, ground, and air, listed in orderof speed. The most complex scenario actually includes multiple modes, known as intermodal or
multimodal, in which two or more modes of transportation are involved to ship a package from its
point of origin to its final destination.

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• Ship – Ships are used for transporting goods over water, including oceans, seas, rivers, andcanals. They are especially efficient for long-distance and bulk cargo transport. Ships typicallyare the slowest and least expensive mode.

• Rail – Rail transportation involves the movement of goods on railroad tracks using trains. It is
known for its reliability and cost-effectiveness for land-based, long-distance transportation.

• Ground – Ground transportation includes movement by road (trucks and vehicles). It is
versatile, used for both short-distance and regional transportation of goods on land.

• Air – Air transportation relies on aircraft to carry goods quickly over long distances. It is known
for speed and is often used for high-value or time-sensitive cargo. Increasingly, drones will likely
play a larger role in air transportation. Air is typically the fastest and most expensive mode.

• Intermodal/Multimodal - Intermodal shipping is the transportation of freightusing two or more modes. The concept was brought about in the mid 20th century through thedevelopment of modern containerization. As standards were developed for container sizes andshapes, it scaled beyond ships to include rail and ground movement. Intermodal freight can
reduce costs and handling on cargo, and is more eco-friendly, but is also much more complex
due to multiple entities each having their own processes and requirements.

Figure 2: Modes of transportation

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Types of Commerce
The notion of “business-to-business” (B2B) and “business-to-consumer” (B2C) in commerce began togain prominence with the rise of modern industrialization and the development of mass markets in
the 19th and 20th centuries. These distinctions became more pronounced as economic structures,
trade practices, and technology evolved.

• Business-to-Business (B2B) – Late 19th century onwards – The growthof industrialization and the expansion of manufacturing industries led to increased trade
between businesses. Companies began to specialize in producing goods and services for otherbusinesses rather than solely
for consumers.

•

Business-to-Consumer (B2C) – Late 19th century onwards – With more significant
distinctions in the mid-to-late 20th century, mass production, marketing and advertisingstrategies emerged, leading to the development of consumer markets. The advent of the internet
and e-Commerce in the late 20th century further transformed various types of commerce,
leading to even more distinctions in these categories.

• Other categories – Business-to-Government (B2G), Business-to-Business-to-Consumer(B2B2C), Business-to-Employee (B2E), Consumer-to-Consumer (C2C), Consumer-to-Business(C2B), Business-to-Government-to-Government (B2G2G – national level), Government-toGovernment (G2G – international level), and Business-to-Business-to-Government (B2B2G– Traders/Regulatory), etc. have emerged with the increased sophistication of supply chains
involving multiple parties.

Parties Involved
There are millions of entities involved in global commerce, across 200+ countries, conducting
business in thousands of languages. In addition, each transaction requires multiple documents(could be up to 100 or more), making the end-to-end process extremely complex.

• Manufacturers – Produce goods and products for the global market, playing a central
role in the supply chain by creating the physical items that are bought and sold.

• Wholesalers – Facilitate the distribution of goods by purchasing large quantities frommanufacturers and selling them in smaller quantities to retailers, helping products reach abroader market.

• Transport Companies – Ensure the physical movement of goods across borders

and regions, using various modes of transportation as defined above, to connect producers andconsumers.

• Logistics Providers – Manage the movement and storage of goods, optimizing supply
chains to ensure efficient, timely, and cost-effective delivery.

• Financiers – Provide the capital and financial services necessary for businesses to operate
and expand globally, offering funding, loans, and investment opportunities.

7• Insurers – Mitigate risks associated with global commerce, offering coverage for cargo,shipping, and other business risks to protect against potential losses.

• Payment Providers – Facilitate international financial transactions, enabling secureand efficient cross-border payments between buyers and sellers.

• Retailers – Sell products directly to consumers, offering a wide range of goods andservices through various channels, including brick-and-mortar stores and e-Commerce
platforms.

• Regulators – Oversee and enforce laws and regulations related to international trade,ensuring fair competition, consumer protection, and adherence to trade agreements.

Data Exchange
As the multiple stakeholders that make up the global supply chain convert basic commodities or
raw materials (upstream) into finished products (downstream), and ultimately deliver them to end
customers who will utilize them, data is exchanged at every stage. Flows of information include
records of the trajectory of inputs and finished products, financial transactions, and personal
information from customers and all stakeholders involved carrying out activities.2
The following image illustrates the flows of information, represented as arrows, between the typicalparties involved in international commerce, as inputs become transformed into finished goods andtransported from shippers to final consumers.

Figure 3: Data exchange across the supply chain8Documentation & Trust
A key part of the story of trade, leading to what we now think of as global commerce, isdocumentation, which emerged as a proxy to ensure trust. In the context of global digital trade,trust requires verifiable trust of the physical, financial, and informational exchanges. In all cases,
trust requires the presence of a human subject (or a trustor) who forms a trust perception aboutan object trust (or trustee) in a specific context. A human may trust another individual, group,
organization, or society; humans may also trust a thing, such as a policy or technology.3
Historically, all examples previously covered used some type of documentation for trade contracts,
letters of credit, manifests, etc. By 3,000 BCE, the first customs and regulatory roles appeared in
Mesopotamia. Since then, many of the underlying processes have been in place for as long as
several thousand years, relying on a form of documentation to verify information.
Documentation, starting originally with clay tablets, and then papyrus, and and eventually paper,
allowed some level of subjective ‘trust’ to be built into the movement of goods, such that, whensomething was being moved for the past several thousand years, the person/entity moving theitems had some type of documentation to address custodianship, ownership, value, etc.
Today, current technologies are allowing us to digitize these traditionally document-driven
processes, and digitalization and emerging technologies will allow us to completely rethink notonly entire global movement processes, but how to significantly streamline those processes. These
technologies will, for the first time, allow us to move from subjective trust to objective trust, where
we know the true source of the data.
Current and emerging technologies allow virtually all paper documents to be replaced, and, once
digitized, the data can be analyzed and optimized, significantly reducing delays that currently exist
at borders and when changing hands between the many parties involved in global commerce.
Peer-to-peer technology, like blockchain, will allow digital ‘trust’ to be built into new solutions.
Emerging technologies allow us to completely rethink processes that may have been used formillennia. The result will be significantly reduced friction (paper, delays, resources) in theseprocesses, which across borders, has a major impact on global commerce. Increasingly, global
supply chains are also expected to capture data to make sure goods were produced with fair labor
practices and with environmentally sustainable practices.

PROBLEM & SOLUTION
Problem
Today there is no end-to-end visibility into the supply chain lifecycle. The magnitude of thisproblem can be seen with major global concerns such as undetected forced labor scenarios andmislabeled products that mislead consumers (e.g., murkiness in the beef supply chain, where not
only the origin but also the nature of the product have been misrepresented). This section covers
those undesired aspects of the global supply chain, from the past hundreds, and in some casethousands of years, in the context of the following: What failed in the past? What problems can beaddressed? What are the implications?

Global supply chains today are not harmonized.

9Virtually none of the processes in global commerce today were designed with a ‘global’ focus,
so it should not be surprising that global supply chains are not harmonized. In this case,‘harmonized’ means interoperable, with a common data language and open data standards. Lackof standardization causes myriad complexities and difficulties, where inconsistencies in formats
and access to data lead to inefficiencies and unnecessary friction, including massive amounts ofpaperwork, resources, and delays. The world experienced this in real time during the COVID-19
pandemic, when many everyday products suddenly became unavailable and supply chains
experienced massive bottlenecks.

DATA SILOS & INCONSISTENT DATA STANDARDSWith multiple stakeholders collecting massive amounts of data throughout the supply chain in
disparate ways, a range of inefficiencies can be attributed to data silos and complexities of information
flow. While data on physical and financial flows across every step of the supply chain remains
inconsistent, it can be very difficult (if even possible currently) to create a holistic view of the end-toend journey from raw material to finished product. Data silos and inconsistent data standards are
estimated to cost the global supply chain $1.1 trillion each year.4
Inconsistent records across trading partners can also trigger disputes, while loopholes can enablecounterfeit and sub-par products to slip through the supply chains. Missing paperwork and disparate
records can also lead to assets getting lost or stolen, causing shipping containers to be delayed in
ports, just as one example.
Moreover, data silos can hinder communication and collaboration across stakeholders. Not only
do parties across the supply chain often create and store data in their own separate formats, they
may also share it only with the next partner in the supply chain to create a limited “one step up, one
step back” visibility that makes it very difficult to have a holistic view of the end-to-end trajectory of a
product.
As a result, in cases where a retailer must respond to a food recall, for instance, the task of tracing
produce on the shelves to the farmers who grew it can be a daunting task taking days or even weeks.
LACK OF TRUSTIn order to build trust into the system, we operate in a complex, often cumbersome and documentladen process, in place for centuries, even millennia. Most of that trust has been artificially createdwithin these processes as a system of documents and signatures, and, in some cases ‘chainof custody’ scenarios. Manual processes bring time consuming documentation and revisions
procedures. Many of these processes and requirements have essentially been created as proxies
for trust.
In only a small subset of the global commerce space, a single delivery carried out by a truck to fulfill
a single invoice can involve hundreds of data elements. Moreover, additional charges for wait times,
layovers, and specialized services (e.g., liftgate services, inside delivery, temperature-controlled
services, handling of hazardous materials, unloading, etc.) can add to the amount and complexity ofdata far beyond basic shipping information and freight description.
Often customers dispute the charges presented to them by freight carriers. In the US transportationindustry, which amounts to $8 trillion annually, an average of $140 billion in invoices are disputed
daily, with disparate accounting records among different stakeholders.5

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It is estimated that up to 38% of invoices are overpaid, as a cheaper alternative for enterprises
than investigating unexpected charges. Other indications of lack of trust include disputes over thecondition of freight and compliance with specialized requirements for certain supply chains, such as
keeping items at the proper temperature throughout the entire route.
Counterfeiting in particular is a major concern. For instance, in 2019, the global fake foods market
was estimated at $449 billion, or 2.5% of all global trade – greater than the entire economy of
Ireland.6 The COVID-19 pandemic further aggravated the concern of counterfeiting, particularly for
vaccines. Counterfeit medicines have been on the rise globally, with nearly 6,000 pharmaceuticalcrime incidents recorded by PSI in 2021 – a rise in 38% from the prior year, and a new 20 year high.7
In addition to counterfeit products as a concern, goods may be unsafe or contaminated.
Finally, vulnerability to fraud can lead to security concerns due to lack of transparency. This canlead to poor collaboration between partners in the supply chain, where incentives toward dishonest
behavior may prevail. Unethical and unsustainable practices can also go unchecked.
OUTDATED PROCESSES
Digitization alone does not solve the underlying issues that come from outdated processes, whichto lead to a wide range of inefficiencies. Friction in supply chains, caused by document-laden
processes, is estimated to cost the global supply chain $1.2 trillion each year.8 It is difficult toalign incentives among stakeholders across common global supply chain processes (e.g., export
clearance, import clearance), and also across industry-specific processes (e.g., batch traceability forpharmaceuticals).
The sheer number of intermediaries and lack of openly available, harmonized data can lead tosignificant logistical and operational challenges, alongside outdated and inconsistent infrastructure.
The average international trade transaction involves dozens to hundreds of original documents,
copies, and entities to send them to, often involving cumbersome manual processes.9 Sourcing raw
materials at a global scale, and shipping, and any stage along the supply chain becomes highly, andunnecessarily, complex.
Often delayed payments and verifications lead to a wide range of friction stemming from disparate
and long reconciliation times, lack of clarity on how items are transported, and lack of data. The
complexity of payments in shipping is best exemplified by the payment of truck drivers. One
challenge facing ground transportation drivers is that they do not get paid until a shipment isdelivered, and they may have to wait weeks, or even months, to receive payment. This creates cash
flow challenges, so entire business models have emerged to pay these operators 70%-90% of their
invoiced amount at an earlier point in time, which introduces yet another party in the process, with
its own set of complex systems. Drivers can choose to be paid – albeit less than what they are owed
– more quickly, or they must wait much longer to receive the full amount.
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Figure 4: Each stakeholder faces a particular set of challenges along the supply chain

LACK OF INCLUSION & RESILIENCE
Foreseeable and unanticipated disruptions in the supply chain can have significant repercussions. The
world immediately discovered just how fragile global supply chains were during COVID-19, and otherexamples could be natural disasters or other catastrophes. These systems can be far from resilient withseemingly minor events taking place to start a domino effect with major repercussions on the ability todeliver of essential products to those who need them most.
Global commerce, with its cumbersome processes and siloed data as it istoday, can make it very difficult toaccess global markets for small and medium enterprises, particularly in economically disadvantaged areas.
This affects those players who would most benefit from accessing global markets. Roughly one in five
adults, or around 1.7 billion people in the world still do not have access to formal banking services, withwomen more likely to be unbanked than men. Lack of access to mainstream marketplaces can perpetuate
global inequalities, which often fuel geopolitical conflict.

SolutionsWith Web3/blockchain and emerging technologies, along with the desire and ability to create common
and open data standards to reduce friction in existing processes, there is a – much – more efficient anddigitized global supply chain in our future. This is not a process improvement exercise, where we are
essentially trying to improve processes that in some cases are literally hundreds to thousands of years old.
Today’s emerging technology will allow us to completely rethink and reinvent existing processes, making life
much easier for Maria making everyday purchases, as opposed to the state of supply chains today.
This section discusses the following key elements toward optimizing supply chains:
•
•
•
•
•

Harmonization
Common language and standards
Trust through data
Better processes
Resilience

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HARMONIZING GLOBAL SUPPLY CHAINS
Harmonization is at the core of every solution to address the issues mentioned in the section
above, to reduce friction across the life cycle. This requires reimagining a new model for supply
chains that are efficient and resilient.
The attributes of blockchain technology, in convergence with other emerging technologies, canhave numerous benefits across several solutions that ultimately are pointed toward harmonizing
supply chains at a global level. First, blockchain allows participants to store digital records ofinformation, exchange that information directly among participants, and abide by common
business rules (e.g., smart contracts, standards, etc.).

Interoperability is key, where open data is fundamental for
scale. A new model leveraging emerging technology can enable a
pro-competitive coopetition to increase the available
opportunities to all stakeholders with increased collaboration
and alignment.
COMMON LANGUAGE AND SHARED OPEN STANDARDSConsistency for the financial and physical movements of data is key. Shared records thatblockchain technology allow can be revolutionary. The need for interoperability in the blockchain
space goes beyond connecting multiple blockchains, but also implies the ability to integrate withexisting systems. Shared data can streamline processes, reducing time and paperwork required
do complete tasks. Open standards enable interoperability and ease of communication amongdevices and systems, toward more efficient use of existing resources.
Open data can also enable a single source of trust for vendor verification, stakeholder
authenticity, and authenticity of products. For instance, a public key infrastructure to verify digital
signatures or zero-knowledge proofs can increase trust in authenticated evidence on physicaland financial flows. In turn, developers of digitized solutions can also quickly adapt to changing
circumstances and conditions, leading ultimately to faster development, better applications, andgreater trust.
Shared invoices, for instance, can greatly reduce disputes. The disputed invoicing problems
mentioned above in the context of truckers can be solved by creating one shared version of theinvoice, managed with a smart contract, and integrated with IoT devices that can monitor thetemperature and location of freight, as applicable. When freight carriers can move to a sharedinvoice managed with smart contracts using blockchain technology, which can connect to IoTdata, invoice disputes can fall from as high as 70 percent to as low as under 2 percent. Invoices
can also be finalized more quickly – such as within 24 hours instead of days, weeks or longer.
Moreover, with costs reductions for both parties in a commercial exchange, relationships canalso be improved.
Emerging technologies, such as blockchain, enable an unprecedented level of transparency,
allowing an end-to-end view of the status of a shipment. The concept of a ‘digital twin’ will be usedby industry to model opportunities in a number of areas, and, with tokenization, representationsof data or value on a blockchain can be exchanged and new value created. Self-sovereign identity
will also be foundational with these emerging technologies. ‘I am who I say I am’ is a dramatic
improvement over legacy paper-driven processes.

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As physical and digital worlds are colliding such that physical and digital information flows alongsidein parallel, the opportunities of digital twins for global supply chains highlight how the information
about a package may be as important than the shipment of the package itself.
Figure 5: Digital twins for packages

Current technology allows us to create a ‘digital twin’ of virtually anything, and in the context of the
global supply chain, it becomes possible to essentially clone the data from all packages movingaround the world, along with many other applications. There will still be a physical movement frompoint ‘A’ to point ‘B,’ but having a digitized version of that will streamline a wide range of activities,
from crossing a national border to creating virtual supply chains where efficiencies can be modeled
for improvement. All of this allows opportunities for analytics, optimization, and both predictivemodels (‘What -will- happen?’) and prescriptive models (‘How can we -make- it happen?’) to enhanceand streamline existing, and, in some cases, archaic processes. Such a digitized process cansignificantly reduce friction across borders (e.g., paper, delays, resources, etc.). True paperlesstrade will transform global supply chains and customs processes, disrupting business models thatare currently reliant on multiple ‘middlemen.’

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Figure 6: End to End Supply Chain Matrix Subset Example

EFFICIENCY WITH BETTER PROCESSES
Updating current models to harmonize global
processes is the essence of the “true north” to which
global supply chains are pointing toward, as enabled
by emerging technology. Blockchain and emerging
technologies allow us to completely rethink systems
and processes that weren’t originally built with digital/
paperless and trusted systems in mind. Processes
centered on sharing open data and common
standards are fundamental.
These processes will be redesigned with digitalizationin mind, ensuring objective trust is built into futuresystems, not only significantly streamlining many ofthese processes, but also minimizing the friction thathas always existed in these processes to date. A
streamlined and paperless supply chain framework
can provide a full end-to-end life cycle view of thewhole supply chain, as well as subsets of thefull lifecycle.
Technology allows users to hold a digital asset that
represents value, and transfer the digital asset, asa replacement to the historical model of a paper
data record. Digital records on a blockchain willconsist of information captured in a standardized
format. Transfer of information directly among
different parties without intermediaries increases
transparency and reduces costs, besides having theability to verify information and authenticity of the
publisher of information regarding the legitimacy ofplayers involved and goods produced & shipped.
Blockchain technology provides an opportunity tocreate seamless information exchange between
various parties, where information and trust can beestablished. Peer-to-peer interactions can reduce
costs and streamline processes, allowing feedback
loops from top down and bottom up.

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PUBLIC & PRIVATE MODELS FOR SUPPLY CHAIN LIFECYCLES
Broadly speaking, a private blockchain prioritizes controlled access and confidentiality among aselect group of companies and participants in a network, while a public blockchain emphasizes
transparency and trust across a broad network of participants. The choice between the two
depends on the specific needs and objectives of the supply chain participants.
In a private (also known as a ‘permissioned’) blockchain, normally a consortium of companies
involved in a specific supply chain (e.g., manufacturers, distributors, retailers, etc.) operates
the network. They maintain control over who can participate and what data is openly visible.
Each participant has a designated role, and sensitive pricing or proprietary information is kept
confidential.
In a public blockchain, multiple stakeholders in a global supply chain use a shared, transparent
ledger to track the movement of goods. Any participant can join the network, view the entire
transaction history, and validate transactions. For instance, consumers can scan a QR code on
a product and see its entire journey from the manufacturer to their hands. Benefits of a publicblockchain include transparency, immutability of records, and decentralization.
To scale globally, the shared transparent ledger of a public blockchain must also addressconfidentiality while preserving the benefits of transparency.

			Figure 7: Public vs. private models for supply chains

Public blockchains

Open to anyone to update and view with full access. For instance, a
supply chain ledger for a retail brand would be viewable by anyone in the
network.

Private blockchains

Permissioned model restricted to authorized set of participants toauthorize updates and make changes. For instance, industry specificledgers with payment contracts may restrict sensitive data. In theenterprise sector, ledgers may be shared between a parent company andsubsidiaries with restricted access.

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TRANSPARENCY
Transparency doesn’t mean everything is visible to everyone in the network, or blockchain and emerging
technologies would simply not scale because no one would (or should) share confidential information suchas intellectual property, pricing information, etc. There are also laws such as the EU’s GDPR (General Data
Protection Regulation), which introduce obligations such as ‘the right to be forgotten.’ GDPR would require
administrators to comply with requests such as making changes or even remove records from a ledger. If I
have the right to be forgotten, how can that take place if the data on a blockchain is immutable? The answer
is, it can’t when sensitive or personal informational is recorded directly on the ledger. This is the same
reason why private information will be kept behind a firewall. On a blockchain, when information is recorded
in a pseudonymous format through encryption mechanisms, it can be made available upon request toauthorized parties that receive an anonymized link to the underlying data.
Transparency in the reference around blockchain, Web3, and broader emerging technologies, means
creating a trustworthy, accountable and visible environment for transactions and processes along the
supply chain lifecycle. For public blockchains to scale globally, technologies like zero-knowledge proofs,
permissioned data access, control mechanisms, and keeping private information off-chain will all likely play a
key role.
TRADELENS
While blockchain and emerging technologies have the potential to be transformative for global commerce,
not all are created equal. TradeLens is an early example of a deployment on a permissioned blockchain,launched by Maersk’s GTD Solution division in collaboration with IBM. This was a business model attempt
to digitize and simplify global supply chains through an electronic shipping ledger that would track cargo
shipments from origin, ports, overseas locations, and, ultimately, final destinations.
While the business model did not work for multiple reasons (high costs, broad scope, significant system
integrations and consulting services, and unwillingness among key players and competitors to share data
they considered business sensitive), the belief is that a public version of a blockchain solution for supply
chains can still scale with open data standards, and, assuming confidentiality can be managed, as discussed
in the ‘Transparency’ section.

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RESILIENCE
Transparency and open data also make supply chains more resilient, able to adapt and respondto unexpected events and disruptions, and able to recover from negative consequences bymaintaining the continuity of essential operations and functions. Connectedness is key toresilience, and the attributes of blockchain technology can enable an unprecedented levelof visibility into potential bottlenecks across the supply chain. Providing organizations in a
supply chain with the ability to be predictive and proactive, rather than reactive, in terms ofrisk management, can greatly decrease the severity of an unwanted event before it happens.
Ultimately this can save money, reduce the stress of managing these situations, and avoid
compliance violations that can damage the reputation of companies and organizations.
In addition, a decentralized and peer to peer system can facilitate access to global markets andbusiness opportunities for smaller businesses and less developed geographical regions, which
would support their global competitiveness. Increased inclusion of entities can also mitigate theimpacts of strained supply chains, providing additional access to suppliers.

REAL WORLD USE CASES
Successful real-world applications of blockchain technology for the global supply chain are
already addressing the multiplicity of issues emanating from a lack of harmonized supply chains,connecting various disjointed steps along the way, and ultimately facilitating outcomes foreveryday individuals like Maria above, who buy and sell items consistently.
Provenance (authenticity/pedigree) is key in this context, where the benefits of recording andsharing provenance data can provide tremendous value across industries. In a 2020 report,
economists at PwC identified provenance as the top application of blockchain technology that is
driving adoption and has the potential to yield the most economic value. The potential boost to
global GDP by 2030 was estimated to be US$962 billion.
With reliable provenance data, organizations can also demonstrate that their products areenvironmentally friendly, and produced in a socially responsible way. This is increasingly relevantwith upcoming forced labor compliance rules, where shipments will be halted at customs upon
the mere suspicion of involving forced labor at any point across the supply chain.
These applications are deploying Web3 technology to connect multiple exporters and importers
to participate in a larger connected ecosystem where commercial interactions can take place. A
technology platform that can validate a shipment, including all its parts and inputs, can optimize
and harmonize the process for all participants in this ecosystem – with benefits ranging from
improved resilience, authenticity, security and privacy, and interoperability.

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By increasing efficiencies, reducing costs, and expanding market opportunities, blockchain
technology can foster coopetition among traditional competitors, where collaborative practices
can improve outcomes for all entities, even traditional competitors, and can do so in a procompetitive way, to the benefit of all.

Circular Economy with End-to-End Traceability: Battery Passports
Digital product passports (DPP) are being envisioned to establish and contribute to a circular
economy. Early work in the EU revolves around battery passports, digitally documenting every
step of the life of a battery, from raw material, through all the stages of the supply chain, and eventhroughout the lifetime of the battery’s use, and ultimately connecting to ways to reclaim andrecycle the product at the end of its lifetime. The battery passport work in the EU will becomefoundational for Digital Product Passports in many other areas and for the logic of acircular economy.

Better Economic Outcomes for Producers: Coffee and Cacao Supply
Chain Traceability in Honduras
Provenance enabled by blockchain technology can serve to greatly improve economic
opportunities for producers of basic commodities. As customers are increasingly demanding
insight into the provenance of products, the ability to demonstrate who grew the coffee bean
becomes a competitive advantage. Consumers value access to this data, and with it they are
more willing to purchase finished goods where a fair portion of the profits go to the farmers who
did the work.
For instance, smallholder coffee and cocoa farmers in Honduras are leveraging public and private
blockchain infrastructure to enhance transparency and make informed business decisions.
These farmers, who often operate at a significant loss and earn a mere fraction from the sale ofcoffee and chocolate in retail outlets, are now empowered by a traceability system that provides
insights from farm to point of sale. Blockchain has allowed farmers and their cooperatives to
upload lot, quality score, certification, and other provenance data. This transparency not onlyoffers buyers a clear view of the product supply chain but also positions farmers to negotiate
better prices. The intricate journey of coffee and cacao, from farmers to consumers, involves
multiple intermediaries, often diluting the profit margins for the initial producers. However, withblockchain solutions, there’s an authentic record of provenance, granting these smallholder farms
a competitive edge in the market, and increasing the resiliency of commodity-based supply chains.
This enhanced resiliency is crucial in mitigating risks such as market fluctuations, climate change
impacts, and geopolitical tensions, thereby ensuring a more stable and sustainable supply chain
for all stakeholders involved.

19

19

Efficiency for Global Customs Organizations
There are approximately 200 customs organizations around the world, which would greatly benefit
from an efficient chain of custody and provenance for cross-border shipments and returns, witha resulting duty drawback. Customs organizations are also undergoing increasing pressure fromgrowing small packet commerce to handle the regulatory export and import clearances andassociated duties.
Transparent value reconciliation, which is a major initiative for several customs organizations, canreduce frictions where blockchain-based and other emerging technology solutions can benefit all
participants in a network with authenticated, trusted information exchange. In addition, manifest
reconciliation can also record areas of labor exploitation, resource waste, plundering the earth, andpollution of natural ecosystems. This is particularly relevant today given upcoming regulations on
stamping out forced labor, sustainable sourcing, and overall responsible behavior. These solutions
can also improve turnaround time for clearances, thereby reducing customs holds caused by
missing information or data silos. Customs compliance scores recorded on blockchain networks
can help importers evaluate alternate sourcing options to mitigate risks and enhance planning andexecution, ultimately resulting in more resilient supply chains.

Ensuring Specified Conditions for Supply Chains: Global Pharma
In combination with sensors across a supply chain capturing data through the Internet of Things,
blockchain technology can record that data immutably to verify that specified conditions requiredfor certain supply chains have been met across the journey from production, shipment, and final
sale and use by the customer. In global pharmaceutics, requirements for cold chains are often
necessary to ensure medical products such as certain critical vaccines (e.g., Covid vaccines) are
fit for use. One example would be the combined use of IoT sensors and blockchain technology,
where a blockchain would record the sensor information about a cold chain shipment and permanently memorialize that data, confirming whether the temperature requirements have been met
across the entire journey. This helps identify with certainty the instances where IoT sensors detect
a breach in the cold chain. This process can help stakeholders identify a batch that is deemed nolonger safe for use, and take actions accordingly. Smart contract functionalities can make an autonomous decision to return the faulty batch back to the shipper, based on proof and understanding that across the lineage of destination the cold chain was broken.

20Streamlining Payment Processes: Invoicing
Blockchain technology enables open sharing of validated information among network participants. In
the case of global freight, a single invoice for one truck to make one delivery can have up to 200 data
elements. Besides the obvious shipping information and freight description, freight carriers add accessorial charges are added to the invoice along the way, such as charges for wait times and layovers. Other
common accessorial charges can include liftgate services, inside delivery, temperature-controlled service,
hazardous materials handling, and unloading services. The customer must review accessorial charges,
which can lead to disputes when the customer expects costs to be lower than the freight carrier’s
charges. In addition to disputes over costs, disputes also arise pertaining to the condition of the freight,
such as if the freight was kept at the proper temperature during the entire route. Across the U.S. transportation industry, for instance, an average of $140 billion worth of invoices are in dispute on any given
day while partners attempt to reconcile disparate accounting records across firm boundaries. Up to 38%
of invoices are overpaid because it’s sometimes cheaper for enterprises to simply pay these invoices thanto investigate unexpected charges.
The series of issues associated with disputed invoices can be solved by creating one shared version of
the invoice, managed with a smart contract, and integrated with IoT devices that can monitor the freight
conditions such as temperature and location. For instance, when Walmart Canada and its freight carriers
adopted a shared invoice system managed with smart contracts using a distributed ledger connected
to IoT data, invoice disputes fell from 70 percent to under two percent. This system also allows invoices
to be finalized within 24 hours instead of days, weeks or longer. Finally, reduced costs as a result also
improved commercial relationships for both parties.

STANDARDS
While multiple data elements and standards exist in global commerce, they don’t exist at the International
Space Station – that is, truly global – level. Existing standards cover different aspects of supply chains andblockchain technology, although there still exist gaps where standards are unclear or non-existent, andultimately certain standards may overlap.
This points to the need for a “harmonizer” role where open standards can apply to the full data journeyof elements across the entire supply chain. Global standards for open data, precisely in the context of
supply chains, are what it will take to scale Web3 technologies consistently in a way that can transform
global commerce. Standards are the underlying condition for harmonizing global supply chains, allowing
the solutions outlined above to address the challenges that have faced global commerce for thousandsof years. Standards also lower the hurdles to leveraging blockchain as an achievable solution.
At the truly global International Space Station level, there is no individual company, no industry, and noborders. Data knows no geographic borders, but we don’t yet have global standards to enable this vision.
Global, pro-competitive, royalty-free, and open-source data standards must also apply to all players
across the supply chain, which is key for scalability of Web3 technology solutions that are built on open
data (e.g., digital twins). To optimize supply chain enhancements enabled by these innovations, open andinteroperable standards provide a common data language to reinvent and redefine processes. Only thenwill global commerce accelerate to the speed of data.

21

The diagram below is a mapping of the existing standards as they are, an assessment of
expected standards in development, and a gap analysis that identifies areas where there
is still a need for standards. The resulting standards framework ultimately demonstrates ahierarchy of standards, where often standards bodies focused on certain aspects of the global
supply chain draw their requirements from larger global standards bodies. For instance, many
standards bodies dictating requirements on aspects of the supply chain, such as data elementson country of origin, ultimately point to requirements set by larger global standards setters suchas the International Organization for Standardization (ISO).

Figure 8: Landscape of standards across supply chain data elements

Type of element
Data Element
1

Country code/Country of origin

Description
Code

Reference

Standard Free Form Standard WCO DSI OCB
ISO 3166x

representing a

EDIFACT

specific country

3207

x

x

x

x

x

x

x

x

x

x

x

x

3

x

x

x

x

4

x

x

x

x

5

x

x

x

x

x

6

x

x

x

x

x

x

x

8

x

x

9

x

x

10

x

x

x
x
x
x

x
x

x
x
x
x

CI

x

2

7

CO

x
x

x

x
x
x

WCO - World Customs Organization
DSI - Digital Standards Initiative
OCB - Open Customs Blockchain
CO - Certificate of Origin
CI - Commercial Invoice

22

Examples
1. Tokenization allows for a digital representation on a blockchain of a real world asset that is notnative to the blockchain. While this term has mostly been associated with a cryptocurrency
token, a token is not a currency but a representation of any form of data, which functions as an“asset” (e.g., document, data files, historical tracking) . This digital representation is a key aspectof supply chain optimization using technology to efficiently transact at a global scale.
GBBC’s InterWork Alliance (IWA) has developed a Token Taxonomy Framework that has
already produced a blueprint to develop open source, platform neutral tokenization standards
to promote interoperability between disparate systems. With the shift to digitizing the supply
chain ecosystem, adopting the needed data standards will be key to ensure token (“data”)
interoperability (e.g., cross-chain), while connecting legacy logistics systems to trigger token
transfers for certain supply chain events. While the data standards will still be important, thetokens themselves will serve as a gate to the data recorded on a chain. Token standards canprovide stakeholders with access to more industry-specific taxonomies. When the taxonomy
and the underlying technical code for a use case are available to the community via open-source
standards, they provide the blueprint that enables faster implementation of products
and services.
Figure 9: Tokenization to trace supply chain packages through digital twins

2. For instance, W3C’s PROV-O10 open specification provides a foundation to implement
provenance applications in various domains that can represent, exchange, and integrate
provenance data generated by multiple parties, across different systems, and under diverse
contexts.
3. The Digital Container Shipping Association (DCSA) has set a goal by 2030 of 100% adoptionof standards-based electronic bills of lading for its members, contributing to end-to-end
digitization.
4. The Digital Standards Initiative (DSI), hosted by the International Chamber of Commerce(ICC), has provided recommendations to harmonize digital trading standards to benefit
businesses, governments, and individuals.11 These standards are designed to ensure trust,
where trust in global trade requires verifiable trust with respect to the physical, financial, andinformation exchange involved in the trade of goods and services, which ultimately depends ontrust in legal, governance, and technology infrastructures underlying. 1223

Methodology
Due to the relatively short time between the announcement that BITA and GBBC had merged (July2023) and the delivery date of GSMI 4.0 Supply Chain, the initial review of standards was limited.
We will use the 4.0 version as our backbone/foundation moving forward, as we expand both thenumber of data elements included, and the number of standards entities and documents.
The initial 48 data elements included come from multiple sources, as explained below, and frombusiness data element requirements, and are intended to form the backbone of future work as
data elements and standards entities are added.
The one example above walks through the methodology:

•
•
•
•
•
•

Data Element – Country Code/ Country of origin
Description – Code representing a specific country
Type of standard, e.g., an actual standard to be followed, or a free form entry
Identified standard(s) – e.g., ISO, UN Trade Directory Code, WCO, etc.
Entities reviewed – for the 4.0 version, this included World Customs

Organization (WCO, Digital Standards Initiative (DSI), and Open Customs Blockchain(OCB)
Documents reviewed – for the 4.0 version, this included Certificate of Origin(CO) and Commercial Invoice (CI)This early work points out multiple observations, all pointing to the need for global harmonization,e.g., a common language, in global commerce:•••

Some entities focus on specific forms or only customs, etc., and map their data
elements that way, but we started with the business/movement/transportationside of this, e.g., what data elements are the most basic that are required to movea shipment from point ‘A’ to point ‘B’? This list is likely in the hundreds, and BITA/
GBBC/GSMI will continue to move forward with additional data elements andstandards entities reviewed to make this more comprehensive and also to create aliving, breathing list with applicable links.
We quickly realize that not every data element has been identified by all entities, orexists on all forms, and we also quickly realize some data elements have a hierarchyof standards. In the country example shown, there is a UN EDIFACT number
assigned (3207), but if you refer to that, it also points you to ISO 3166. There are
numerous examples where multiple standards exist, or one standard points you toanother standard, though, again no fully harmonized code.
Other items above were simply reduced to an ‘x’ in appropriate cells just to
further show the diversity of responses. The full list of 48 items, with all applicable
responses, is included with this document for review.

This initial effort (GSMI 4.0 Supply Chain) points out that the more we can put into focus the fulllist of data elements, and a single standard, or multiple standards, or, likely, no standard, themore we can discuss with other like-minded open standards entities so we can agnostically alignand harmonize these open standards results, to the benefit of all. One great example is that asrecently as 2019, World Customs Organization (WCO) had proprietary standards, and as of 2023,
those standards are now open.

24

CONCLUSION & BITA FUTURE OUTLOOKWhile thousands of years of trade have led us to the global supply chain of today, blockchain
and emerging technologies are leading us to a future where paperless trade can becomea reality, transforming industry and regulatory processes, and entire industries. That is
why GBBC’s BITA initiative has come to fruition, bringing together major global logistics andtransportation stakeholders to thoughtful adoption of Web3 innovations toward a newgeneration of global commerce that can finally adopt an “International Space Station” view.
BITA is working as a global harmonizer for open data standards in global commerce.
An effort to map, produce, publish, and implement open data standards harmonization for
emerging technologies in the global supply chains is the “True North” guiding this initiative.
Moving forward, the goal is to produce a living repository of standards documentationthat is constantly updated (e.g., Wikipedia concept), to serve as an open-source standards
foundation for emerging technology for global supply chains. These standards are meant tosupport future reference architecture for foundational use cases.
These standards will also serve as a roadmap to educate stakeholders and guide public andprivate models of that can shape a new era of commercial activity that can include a wider
range of large, small, and medium enterprises and organizations from around the world toparticipate in connected, trusted, efficient marketplaces. New and efficient processes basedon these standards can also enable point-to-point global commerce, addressing barriers thatcurrently prevent individuals, for instance, to make purchases directly frommanufacturers abroad.

CALL TO ACTION
The BITA initiative calls companies and organizations
participating in the global supply chain to commit tocollaborating on open source solutions.
Tomorrow, with emerging technologies deployed inharmonized and scalable ways underlying the processes
involved in global commerce, Maria can make her dailypurchases in a much simpler world. We expect most 10-yearolds today, as adults in the future, will want to know where
the coffee they are drinking came from, if the clothes they are
wearing are sustainably made, and many other details on the
products they consume, which originate from data collectedalong global supply chains.

25

ENDNOTES.

SUPPLY CHAIN
1
2
3
4
5

6
7
8
9
10
11
12

(Harrison et al. 2014)(Harrison et al. 2014)
Lacity, M., Schuetz, S., and Steelman, Z. (2023). IT’s a Matter of Trust. University of Arkansas
white paper: https://walton.uark.edu/departments/information-systems/files/bcoewhitepa
per2023post.pdf
2022 Deloitte Reporthttps://www.computerworld.com/article/3454336/walmart-launches-world-s-largest-blockchain-based-freight-and-payment-network.html (Computerworld, 2019) - “Logistics andtransportation is an $8 trillion industry and as much as $140 billion per day can be tied up
in disputes or settlements between supply chain participants, according to Laurie Tolson,
chief digital officer of GE Transportation.”
https://www.statista.com/chart/27289/global-trade-volume-with-counterfeit-goods-com
pared-to-gdp-of-selected-countries-regions/
https://www.statista.com/chart/30067/worldwide-counterfeit-pharmaceuticals-incidents/
2022 Deloitte report
Global Express – [source]
https://www.w3.org/TR/prov-o/
Key Trade Documents and Data Elements paper: https://www.dsi.iccwbo.org/_files/ug
d/8e49a6_2d93b2f219cf404ab91bafd028e31fcc.pdf
Trust in Trade paper: https://www.dsi.iccwbo.org/_files/ugd/8e49a6_5a75a77950d7474d
a772bf9cfc2d985b.pdf

26

GLOBAL BLOCKCHAIN
BUSINESS COUNCIL
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