300Cubits suspend operations

Blockchain based 300Cubits has announced that they will suspend the operation of the Booking Deposit Module for container shipping as of October 1st.

That we are seeing one of the freight-tech companies put an end to their initial core product is not surprising. One of the outcomes from my book "Liner Shipping 2025" which was published in 2017 was that we would be seeing a strong increase in the number of freight-tech companies in the short term. This was driven by a clear need for new technological tools and solutions in the shipping industry.

But it was also made clear that all of these should be seen as "experiments" - all would likely have good ideas and concepts. At least good enough to warrant the first investments. But following an initial period of a couple of years it would be crunch time - after that period, the cash from the initial funding rounds would be running dry, and in order to push forward, the companies would need to show real and tangible business uptake for their concepts.

This is no different than for start-ups in any other industry. The interesting part is that the shipping industry finally reached a tipping point where digitalization was gathering speed rapidly, and hence the field for tech start-ups was wide open leading to a mass injection of new companies in a short span of time.

It is not easy to determine beforehand which companies will make it through this second cut as it depends not only on the merits of their tools and ideas but also on the ability to gain commercial traction with the customers as well as the ability to develop and deploy the practical tools.

The outcome we now see from 300cubits is a sign of this anticipated change - we are getting to the point where the plethora of new freight tech companies launched in recent years is reaching this important cut-off-point in the digitalization of the shipping industry. In essence: Do they show sufficient actual commercial traction warranting further investment, or will they be left by the wayside?

The expectation would be that in the coming year we will see more of this with freight tech companies either making it to the next round and accelerating the growth they have been able to show thus far, or a pull-back from an idea which didn't pan out commercially. And make no mistake, we are entering a phase where it is the actual business-uptake of the tools and ideas which is becoming more important than the concept of the underlying ideas.

Shipping, after all, is a practical craft where a profit has to be shown at the end of the day – and digital tools are now getting out of the early incubators and have to prove their mettle in this respect.

Disclaimer: Please note that in addition to being an analyst I am also a current advisor to, and former board member of, NYSHEX.