- A shipping industry startup, 300cubits, intends to use blockchain technology to address an ongoing pain point for the ocean freight industry: overbooking by carriers and shipper no-shows, American Shipper reported Tuesday.
- Using Ethereum — a public, blockchain-based computing platform — 300cubits would "tokenize" transactions online, calling each token "TEUs." The startup plans to kickstart the use of tokens by dispensing numerous tokens on Aug. 16 to container lines, shippers, and early adopters.
- Once in circulation, reservations by carriers or shippers will constitute a token sale. Those sales will monetize the tokens, thereby adding value and accountability to each transaction, according to the startup.
No-shows and overbooking are an ongoing problem for the industry, as a vicious cycle of distrust and lack of accountability between shippers and carriers undermine ship utilization.
The problem is so pervasive, 300cubit is not the only startup looking to improve accountability. NYSHEX was formed in March to enhance trust via a contract system between shippers and carriers. Penalties of 40% of the agreed rate for no shows by shippers and 35% for roll-overs by carriers will be imposed for signers who violate agreed-on terms. Other methods include fees imposed by carriers such as CMA CGM and Hapag-Lloyd at $150 per TEU and $40 per shipment, respectively.
That the situation remains problematic is evident by the ongoing efforts to resolve it. Whether through blockchain, contracting methods, or fees, the industry is clamoring for a solution. Without one, shippers and carriers will continue losing money, or at a minimum, opportunities to be more efficient.