Yesterday, Hong Kong-based firm 300cubits announced that it will suspend operations of its blockchain Booking Deposit Module for shipping. The system aimed to streamline the booking process in container shipping, preventing delays and overfilling of capacity. While it saw limited successes, 300cubits made the decision over regulatory concerns and apprehension amongst clients.
The blockchain-based platform boasted participants such as Maersk, Cosco, and CMA CGM. Its linked TEU token, a maritime digital asset, was distributed to over 100 shippers. However, 300cubits revealed yesterday that only around 200 containers had been booked through its system, rendering it no longer commercially viable.
“The lack of clarity in regulatory regimes surrounding digital currencies has proved to be the greatest hurdle in the 300cubits’ marketing efforts,” the announcement read. Indeed, businesses are uneasy about projects related to cryptocurrencies due to their perceived volatility and lack of guidelines.
Leading booking portal INTTRA nearly partnered with 300cubits but pulled out “at the eleventh hour” over such regulatory concerns.
Another issue is that the pain point the system aimed to address turned out to be less important to shippers than other problems. The Booking Deposit Module primarily hoped to prevent ‘rolling’, when cargo is not loaded onto the correct ship. Rolling can occur for many reasons, including overbooking, documentation issues, and customs delays.
300cubits saw the potential for blockchain’s immutability, security, and transparency to avoid rolling. The firm’s vision made sense, as the technology has been used in customs, digitizing shipping documents, and booking systems.
But customers still saw delays in peak seasons and complained of not getting confirmation, even when they were within booking volume limits. These issues appear to be more critical to cargo shippers than rolling. Plus, they were not all that excited about blockchain’s capabilities.
The firm’s statement read: “From 300cubits’ experience, many of the core blockchain features, e.g. immutability and anonymity are either not intuitive or unappealing to the business users.” Customers have become comfortable with the familiarity of centralized server-based platforms. Platforms which are not necessarily interoperable with decentralized systems.
300cubits plans to burn more than 75% of its TEU tokens which have not been used. However, it will continue to work on blockchain in transportation, shipping, and finance.