Have you ever seen the cargo moving on and off a Shipping Port?
The huge containers, the mammoth ships and the towering cranes, make it look like clockwork. At a closer look, there is much more to it than just loading and unloading the containers.
All is not well in the Container Shipping Industry, infact the industry has been contending with its biggest financial crunch in its 60-year old history.
Majority of the container shipping industry, has been running up losses for years. South Korea’s Hanjin Shipping became the first big container ship operator to enter bankruptcy since 1986.
To put things in perspective, in 2017, A.P Moller-Maersk’s CEO Soren Skou announced company’s second-straight year of losses. This happened for the first time since World War II.
In this post, I try and look closely at the problems plaguing the container shipping industry and then analyze an upcoming ICO – GSCP Blockshipping. Goes without saying that, Blockchain lies at the center of GSCP’s vision to disrupt the container shipping industry.
While there are multiple issues, plaguing the industry, I would like to focus on the few critical issues, which are the core and for which no ideal solution has been found till date.
Problem: Overcapacity
In 2006, the historic Panama Canal expansion was inaugurated. It was a massive, widely anticipated event and was hailed as the infrastructure event of the century. Since 2006, it had become clear that big ships would become the norm. Simply stated, larger ships meant fewer sailings lowering both fixed and variable costs between 2 points.
However, the same larger ships are now haunting the industry, as overcapacity is hurting shippers throughout the world. To explain in lay man terms, if a ship which has a capacity of 100 tons, manages to ship only 50 tons of goods in a specific route. The fixed costs for the ship almost remains the same, which its revenue potential only touched 50% (50/100 tons).
Shipping companies are trying to address this by coordinating among themselves, however there is lack of a truly global platform, which can help solve this problem.
Solution – Greybox Approach backed by Blockchain
What if companies, could have access to a shared pool of containers with visibility into the exact location, shipping routes and capacity of each of these containers. Given companies are already willing to co-ordinate, they can then chose the best possible combination and ensure that overcapacity is limited in a specific route.
Such a solution is also prone to manual errors and human interventions. There is also an inherent lack of trust among various parties involved in the value chain. This is where blockchain comes to the rescue!
GSCP Platform will provide a global container asset registry where the entire inventory of participants will be recorded along with real-time location of the containers. Each entry would be recorded in a global Fort Knox style blockchain backed registry.
Problem: Complicated Processes & Overhead Costs
Maersk commissioned a study carried in 2014 to understand these issues. They followed a refrigerated container filled with roses and avocados from Kenya to the Netherlands.
“The company found that almost 30 people and organizations were involved in processing the box on its journey to Europe. The shipment took about 34 days to get from the farm to the retailers, including 10 days waiting for documents to be processed. One of the critical documents went missing, only to be found later amid a pile of paper.”
The unnecessary burden of paperwork and processes has been one of the reasons, shipping has lagged other industries in moving to electronics forms.
These costs associated with document processing and administrative overheads were estimated by IBM to be up to one-fifth of the actual physical transportation costs.
On top of additional costs, the paperwork can be delayed, misplaced or altered, causing further problems and resulting in mounting costs.
Solution: GSCP’s Blockchain based Platform
IBM estimates that Blockchain could save $300 per container in terms of labour and processing associated documents.
GSCP’s platform can help automate lot of operational business processes which till date still are carried via traditional paperwork.
The platform also helps streamline payment procedures leveraging smart contracts, which enables transparency across the value chain.
Blockchain & Shipping Industry: Blockshipping is a tribute to Danish’s shipping Industry
IBM and Maersk first partnered on a blockchain trial in summer 2016. Post this trial, they have partnered with various other companies such as Dupont, Dow Chemical along with various ports and customs offices.
While these trials are a good sign that the industry recognized the benefits of blockchain, to enable the benefits for the entire industry we need a platform, which is open to all the participants of the eco-system.
It is fitting that a company from Denmark, would try and create a platform and lead the way in defining how blockchain can disrupt the shipping industry. Blockshipping is a tribute to Danish shipping industry and its legacy.
CPT Tokens & ICO Details
Let’s try and understand the nomenclature a bit.
CPT = Container Platform Token
These tokens will be offered on the global Ethereum blockchain for the ICO. Pre Sale was kick started in Feb 18 and currently token sale is underway.
CPT tokens can be purchased at a cost of $0.62 per token, with a minimum ticket size of $100.
For more details about the ICO, please visit:
Website: https://www.blockshipping.io/
ANN Thread: https://bitcointalk.org/index.php?topic=3502572.new#new
Whitepaper: https://www.blockshipping.io/wp-content/uploads/2018/02/Blockshipping_GSCP_ICO_White_Paper_public.pdf
Telegram: https://t.me/joinchat/HWi2Gw9VvUw1U5lZObNS2w
Blog By: maxxxks
Btalk profile: https://bitcointalk.org/index.php?action=profile;u=1929209
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If Maersk is onboard then this would seem to be a very viable opportunity. It could bring the cost of container shipping down by making more effective use of space available in containers, so long as companies get onboard. Brilliant idea.
Agree mate. While researching on this subject, I came across various articles which covered the IBM and Maersk partnership. If the #1 player is already exploring blockchain to address their issues, definitely there is lot of potential which a platform like Blockshipping can truly leverage.
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Been reading about IBM and Maersk trying to do something with blockchain, about time someone tries to pull something like this at scale. Good luck Blockshipping
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