In the second half of the 20th century, shipping was revolutionised by the introduction of standard containers. Today, container shipping accounts for approximately 60% of the global maritime trade. The industry is huge and highly profitable, but also rife with problems: inefficiency, waste, outdated IT support, complicated, error-prone paperwork and substandard customer service. Increasingly it is also dogged by environmental regulations and mounting financial troubles for some of the leading companies.
The shipping industry is widely acknowledged to be “ripe for disruption”; moreover, given its recent problems, it couldn't afford to neglect innovation. The adaptation of blockchain technology to eliminate inefficiencies is a tempting and increasingly popular solution. Nonetheless, Blockshipping's Global Shared Container Platform (GSCP) stands out among other such projects due to its remarkable support within the industry and its ambitious goal of creating the world's first complete registry of shipping containers.
How will the GSCP work?
This project has two main goals. The first is to create a global inventory of shipping containers along with their ownership and real-time locations. As there are over 27 million standard containers, the task will be difficult, but Blockshipping hopes to achieve 60% coverage within three to four years. In addition to blockchains, the company intends to encourage the use of real time tracking devices that would upload information to the platform.
Blockshipping intends to build on this database to accomplish its second goal: turning the GSCP into the shipping industry's leading operational payment solution. The platform is targeted at industry players only, giving them access to reliable, up-to-date information about vital cargo space on the market. They will then be able to negotiate its use with other parties. The platform can be used to pay for transactions – from simple leases and fees to greybox (sharing currently-unused or underused containers across companies) and street-turn (rerouting empty containers without intermediate stops at ports or depots to suit real-time local needs) operations enabled by the database. The Container Platform Token (CPT), fixed to the US dollar, will be used to carry out transactions and pay the platform fees.
How can you benefit from this project?
GSCP has much to offer to everyone involved in the shipping industry, from transportation companies to port authorities. Real-time information about shipping containers and the possibility of doing business on the platform rather than through banks can already save a lot of time and money. But Blockshipping promises far greater indirect savings as a result of widespread adaptation of its model: using the container database, it will be possible to streamline the troubled industry by cutting down on waste and ensuring more rational use of its resources. This, in turn, would make it easier to adapt further technological innovations and attract investment from banks. In addition to the obvious economic benefits (Blockshipping estimates the overall savings for the industry to be around $5.7 billion yearly), the optimisation of shipping would also mean reducing the size of the global container fleet by 15%, with a corresponding reduction in CO2 emissions.
Additionally, the GSCP features an innovative revenue sharing model. Until the revenue from transaction fees reaches $30.8 million, those who acquire its external revenue token, the Container Crypto Coin (CCC), will receive 20% of the revenue. Afterwards, they will receive 3%. It is estimated that this shared revenue will gradually increase from 1.42% in 2019 to 19.43% in 2022. So while the CCC cannot affect the stability of the CPT, the CPT will contribute to the external token's value. The revenue will be paid out by means of a “reverse Dutch auction”, in which owners of the CCC will be allowed to sell their tokens for a sum of ETH that will rise at every fixed interval. The CCC tokens acquired by the company during the auction will then be proportionally redistributed among remaining CCC owners, thus ensuring that all of them will be rewarded.
What are Blockshipping's advantages?
Blockshipping is a Denmark-based company that enjoys the support of many key players of that country's disproportionately large and influential shipping industry, including the Danish Maritime Fund. Its founders are themselves veterans of that industry. Its ICO is the first to use The ICO 2.0 Framework, which ensures its full compliance with Danish law and incorporates the experience of recent years. A key advantage for the company is that, although it is very well-connected in the industry, it is also a neutral third party, not attached to any existing shipping company. This means that the GSCP can indeed live up to the promise of a trusted and impartial platform, enabling new modes of cooperation in the industry. The environmental benefits of this idea are also likely to play well in the current climate.
The token being offered is the Container Crypto Coin (CCC), based on the Ethereum ERC-20 platform. The minimum investment is $100 dollar equivalent. The ICO will run from 14th May to 14th June 2018.
Will blockchain technology rescue the shipping industry?
The shipping industry has a well-deserved reputation for conservatism, reinforced by its sheer size. Yet its history shows that, when pressed, it is certainly capable of groundbreaking innovation – such as the adoption of standard shipping containers. Currently the industry is facing many problems that can be solved, or at least mitigated, by the introduction of blockchain technology – as it can enable much-needed cooperation and streamlining. Blockshipping is not the only company to offer such a solution, but it enjoys a unique advantage due to its shipping industry credentials, reputation for impartiality and use of some of the latest advances in the cryptoindustry. As such, its project has a good chance of success, and may breathe new life into the world of shipping.
This review by Bonanza Kreep is all opinion and analysis, not investment advice.