Hong Kong-based 300cubits, one of the pioneers in the application of blockchain solutions to the container shipping market, has decided to suspend the operation of its Booking Deposit Module effective October 1, 2019.
As explained, the lack of clarity in regulatory regimes surrounding digital currencies has proved to be the greatest hurdle in the 300cubits’ marketing efforts.
What is more, the lack of liquidity for the TEU tokens and the volatility of all cryptocurrencies in general also cast a constant doubt among the users on whether the value of the tokens could be realized.
The cloud-based system built on blockchain started accepting trial shipments in March 2018 and was launched into live production in July 2018.
The system has had participation from the largest shipping companies such as Sealand of Maersk Group, CMA CGM, MSC and COSCO while the 300cubits has gone the length in its discussions with the rest of the top ten container liners about running trial shipments on the system. Additionally, more than a dozen shippers have tried the system and over 100 registered to get their allocation of TEU tokens, according to 300cubits.
When using the system, both carriers and shippers were careful about their commitment. Nearly all except one shipment where booking deposits were placed were executed according to the booking.
However, only a couple hundred containers have gone through the system, which is not sufficient to keep the system going commercially, 300cubits said.
Specifically, many potential users shied away from trying as they were not sure about what regulatory measures the authorities may take in respect to digital currencies. Apart from this, 300cubits has also learned that shippers face bigger booking pain point than rolling, which is what the system is designed to solve. Instead, these shippers complain that they often could not get their bookings confirmed during peak season despite their booking volume are still within contract commitment.
The company further explained that, from its experience, many of the core blockchain features such as immutability and anonymity are either not intuitive or unappealing to the business users.
With the system being suspended, 300cubits will burn at least 75% of the TEU tokens that have not been sold or picked up by the industry users. Going forward, 300cubits will burn even more TEU tokens as the ones currently being allocated to industry users circulate back to 300cubits.
Moving forward, the company said it would continue with its other projects. It plans to promote the use of blockchain in the areas of transportation and explore the use of other technologies in areas such as shipping and finance.