Blockchain solution for cost reduction in container industry

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The problem lies in the irresponsible behavior of a large number of customers whose hasty decisions cause considerable losses to shipping companies

The problem

On August 31th 2016, Hanjin – the Korea's largest shipping company and  the seventh largest one in the world, filed for bankruptcy at the Seoul Central District Court and was subsequently approved. The biggest bankruptcy in the history of the shipping industry has prompted a surge in freight rates, but the problem is about customers’ trust, as hundreds of millions of dollars worth of goods which had been deposited were still floating on the ocean at that time. One of the reasons for the loss in Hanjin’s revenue is due to the high costs increasing year by year.

ICO, blockchain, shipping industry, container, 300 Cubits, TEU, token

However, the source of the problem lies in the irresponsible behavior of a large number of customers whose hasty decisions cause considerable losses to shipping companies. The situation in which customers has booked a shipping slot for container space but do not show up with the cargo, results in liners having to overbook container space regardless of the actual capacity, especially at a time of increased number of order intakes. This vicious circle constantly repeats itself, causing many ships to sail with a large number of empty slots or packages that have been deposited but still left behind.

ICO, blockchain, shipping industry, container, 300 Cubits, TEU, token

300 Cubits – The best of both worlds

To solve this problem, 300 Cubits has been created. This is a blockchain-based project that builds a decentralized platform in which container information, booking conditions, commodity status, etc., are available to both customers and shipping companies. When a booking order is made, blockchain will generate a smart contract, requiring two parties to deposit the indicated amount of TEU token. The shipping companies will obtain  the compensation paid in TEU if the customers do not show up with the cargo, and vice versa, the shippers will also receive TEU if their cargo is left behind. Of course the deposit will be sent back to both parties’ accounts if the contract is fully complied.

ICO, blockchain, shipping industry, container, 300 Cubits, TEU, token

Paying freight by cryptocurrency

The 300 Cubits platform uses TEU token (TEU also stands for twenty-foot equivalent unit: a standard measure for a container for transporting goods). When customers book through the shipping companies’ website or through the booking system of 300 Cubits, they will be required to input all information about the terms of trade agreed upon the import-export contract (such as terms of goods, delivery, payment, etc.) and deposit the amount of TEU.

For shipping companies, after receiving the booking request, the system will check the terms of trade to find the liner and container space suitable with the shipment as well as verify the token already deposited. Once the request has been accepted, the liner will confirm the booking by providing the booking number as well as depositing a similar amount of TEU to guarantee the shipment. If the system can not find a suitable location and can not receive the cargo, the smart contract will allow the shipper to retrieve the tokens that were originally deposited.

ICO, blockchain, shipping industry, container, 300 Cubits, TEU, token

Basic information about 300 Cubits

  1. Token: TEU
  2. Platform: Ethereum
  3. Price: 1 ETH = 400 TEU
  4. Total supply: 100,000,000 TEU
  5. ICO strart: 12 April 2018
  6. ICO end: 12 May 2018
  7. Website: https://300cubits.tech/
  8. Twitter: https://twitter.com/300cubits_tech

ICO, blockchain, shipping industry, container, 300 Cubits, TEU, token

Three Co – founders of the ICO (Source: https://300cubits.tech)

Overview

300 Cubits is an ambitious project which wants to change the traditional container shipping industry. In the future, TEU is designed to be the main currency used in this field. However, TEU will have to deal with many problems. For example, shipping companies may conglomerate to raise freight temporarily and after TEU is sold, they will reduce the price to direct customers back to the traditional market.  

Written by Nami.today

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