The company, 300cubits, is aiming to use blockchain technology to alleviate a debilitating pain point for the industry: overbooking by carriers and no-show cargo from shippers. 300cubits believes the use of cryptocurrency to consummate transactions could radically change those behaviors.
The company, founded by longtime shipping finance analyst Johnson Leung and his partner Jonathan Lee, is basing its solution on Ethereum, a public, blockchain-based computing platform. The value of transaction on the 300cubits platform would be "tokenized" through smart contracts on the Ethereum platform. The token, or blockchain currency, is called, appropriately enough, TEU.
"Near term, the TEU tokens will be used as booking deposits for container shipping, of which the value could be lost if a customer does not turn up with a cargo or a container liner does not load a cargo according to a confirmed booking," the company said in a white paper describing its solution. "We believe a booking deposit in the form of cryptocurrency is the solution to one of the biggest pain points in the container shipping industry – trust or the lack of."
It's not, however, the only platform targeting a change in the overbooking/no-show behavior issue. The New York Shipping Exchange (NYSHEX) earlier this year launched its platform to facilitate forward contracts in the liner shipping industry. 300cubits likewise believes that providing a neutral place where carriers and shippers can transact with enforceable penalties is critical to the business. While NYSHEX is a platform that enables parties to transact, 300cubit's solution provides the currency with which they would transact.
"As booking deposits, the TEU tokens’ value will naturally be linked to the value of actual freight rates," the white paper said. "Hence, the trading of the TEU tokens will become the leading
indicator for freight rates, serving as much like a peer-to-peer crowd prediction platform for container shipping industry.
"Long term, we see the TEU tokens being adopted as a settlement currency for the container shipping industry, which could move the whole industry’s transactions or even the entire logistics industry’s transactions onto the blockchain. What does it mean in numbers? Container liners alone generate about $150bn revenue a year. On a higher level than above, the introduction of the TEU tokens will be a paradigm shift for the container shipping industry. Unlike other solutions that may improve an area of container shipping transactions or operations, the TEU tokens will eventually change how all transactions are conducted."
300cubits plans to kickstart the use of TEU tokens at the outset by giving away a certain number of tokens to container lines, their customers, "and those who actively promote the tokens for early adoption."
The company said it will initially release tokens Aug. 16.