TEU Tokens and also Blockchain Could Shape the Future of Container Shipping
By Sam Whelan (The Loadstar)–Blockchain effort 300cubits has actually developed a brand-new sort of cryptocurrency to resolve lining delivery’s US$ 23bn “booking shortfall” problem.
Named TEU, the de-facto market money is dispersed as symbols on the Ethereum network and also will certainly be tradeable on different worldwide cryptocurrency exchanges.
300cubits asserts the symbols will certainly assist to get rid of delivery’s “trust issue” by minimizing the counterparty default threat, brought on by carrier ‘no-shows’, and also by service providers ‘rolling’ freight.
According to New Jersey Institute of Technology’s Professor Michael Erlich, the influence of this reservation deficiency can be evaluated as 5m teu a year, which sets you back the market $23bn when ripple effects, such as service providers’ shed earnings and also carriers’ added stock prices, are determined.
300cubits’ option is to make use of TEU symbols as reservation down payments. The symbols are coded with a collection of unalterable problems to produce blockchain-enabled wise agreements to control the reserving deal.
“Once committed, neither party can alter what has been agreed,” stated 300cubits.
“Both the container lines and also their consumers will certainly be provided TEU symbols that will certainly be held as down payments with problems, and also paid later on, upon the implementation of the delivery reservation.
“The container lines will be compensated with the TEU tokens if the customer does not turn up with cargo. Likewise, the customer will be compensated with the TEU tokens if their cargo is rolled.”
The no-show concern is plainly a pushing one for delivery lines. In June, CMA CGM presented a $150 per teu termination cost for reserved solutions to the Indian Subcontinent, Middle East Gulf and also Red Sea ports.
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However, according to 300cubits founder Johnson Leung, termination charges and also various other charges can trigger additional ineffectiveness.
“Shipping companies are already putting in a lot of resources and spending millions on this lack of trust issue,” he informed The Loadstar.
“We located that their options, calling for consumers to pay charges for no-shows, or calling for money down payments or financial institution assurances for the reservation, are all points that are in fact fairly pricey.
“It’s the same with shippers using credit to pay these fees; every time you put money in you have something called the ‘time value of money’ – the interest is expensive,” he included.
Mr Leung stated TEU symbols can be made use of with minimal interruption given that no brand-new reservation user interfaces would certainly be needed.
“Nothing needs to be changed, they just need to have a digital wallet to receive the token. A smart contract is then derived that can accept the token, from their wallet, which is then held in an escrow account. Following the transaction, a signal is then sent from the terminal on the status of the cargo.”
After a very first set of TEU symbols are offered to some very early adopters, 300cubits intends to provide an ‘initial token sale’ to monetise the brand-new money. Use of the symbols by market gamers will certainly verify and also boost its worth, it stated, including that just 100,000,000 symbols would certainly be developed to guarantee their lasting worth.
Mr Leung stated this would certainly produce much-needed technique for the market.
“For instance, if I offer you $10,000, yet I inform you that you can just utilize it as a scheduling down payment in the very first number of years; after that you’ll utilize it yet at the exact same time you will not wish to shed it.
“So discipline will improve; it might not totally eliminate the problem but it will improve, because if you lose a token today then you’ll need to buy more tomorrow for a higher price,” he discussed.
“Every year, liner shipping revenue is $150b, but in a very good year the net margin might be seven or eight percent, meaning the profit in the industry is less than $20m. So every $1m saved is massive for the industry.”
The ‘initial token sale’ is prepared for November, after tests are finished.
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