One of the world’s pioneers in the use of blockchain technology for international shipments, 300cubits, is calling it quits regarding its TEU token because, allegedly, a lack of business. The company explained the situation via a statement published in the last few days.
The statement read that “the transaction volume through the system have been far from commercial. Only a couple hundred containers have gone through the system, which, although may seems plenty among the shipping blockchain projects, is not sufficient to keep the system going commercially.”
TEU is a word play derived from Twenty foot Equivalent Unit, which is usually the go-to unit of measure in the shipping world. The asset was initially issues via an Initial Coin Offering (ICO) in the early part of last year, and it was dubbed as the medium of exchange for 300cubits’ Booking Deposit Module.
Booking Container Space
The clients of the platform would use the tokens to book container space with fellow participating shippers. The idea behind the project was that the TEU token would hold value of some kind by solving booking issues that have surrounded the container industry for quite some time. Clients would not be inclined to cancel orders and the probabilities that shippers would overbook their ships would be lessened.
The first trials were performed at the end of the Q1 in 2018, and by the month of July of that same year, the system was up and running. However, the developers’ dreams did not materialize, as interest was low and there were not many completed transactions.
Among the companies that tested the TEU token were Sealand (a Maersk firm,) Cosco (based in China,) and Swiss enterprise MSC, per the published statement. It was also reported that 300cubits was in talks with several other major actors in the container shipping industry.
According to 300cubits, most of the obstacles were of the regulatory variety, as it often happens with digital assets. As it turns out, numerous potential clients preferred to stay away because of the uncertainty surrounding the authorities’ treatment of the token.
In the same vein, other reasons why the project did not come to fruition were liquidity and volatility, and several potential clients were scared off. Traits such as immutability and anonymity, which happen to be two of the most commonly advertised benefits of the blockchain technology, were seen as problematic by the market.
As a result of the latest decision, the company will proceed to burn at least three quarters of the total TEU supply; now, they plan to continue to do so the moment they receive them from customers, per the statement. The Hong Kong-based firm will not quit in its pursuit to deploy a blockchain solution, however.
Introducing Blockchain Solutions
The shippers and the New York Shipping Exchange (NYSHEX) have introduced solutions for booking no-shows. The NYSHEX happens to offer enforceable freight pacts.
Whilst 300cubits’ TEU token was not particularly successful, that does not mean that the blockchain technology has failed in the shipping industry, quite the contrary in fact. The approach is being used, but in different ways. For example, two heavyweights, IBM and Maersk, worked together to develop TradeLens, which is a system based on the blockchain that shows real-time shipping data being shared between two or more parties in a supply chain.
By Andres Chavez