2018 was marked by a series of major events that impacted the global economy including the Sino-US trade war, volatile oil prices, unstable currencies and the market correction of encrypted digital assets. While many choose to focus on this tumultuous year’s negative outcomes, the fact is that opportunity often lies in disorder. The reconstruction of the global economy has reached a turning point; and there is an urgent need to integrate, streamline and align a wide variety of industries through the help of innovative technologies.
As the only international shipping intelligent trading platform servicing the dry bulk market, the MBC Project is committed to solving problems that have plagued the industry for over a century. The MBC platform integrates traditional dry bulk market international shipping with internet services, while combining artificial intelligence and the latest in blockchain technology to optimize incumbent shipping practices, open new financial channels and reduce shipping costs while increasing success metrics for all global shipping participants.
As the world’s most important logistics solution, international shipping contributes greatly to the world economy. In 2017 alone, the total value of international shipping totaled approximately 20 trillion US dollars; the dry bulk market accounting for 40% of this total. Despite the huge related capital flows and the pivotal role international shipping plays in the transportation industry, procedural shortcomings have plagued industry participants. The world’s fleet is spread across more than 150 countries and includes more than one million seafarers. Ship and cargo owners are similarly dispersed. Geographical, time zone, legal, cultural and other differences result in a permanently scattered dry bulk market. It is clear that centralized logistics service solutions relying on traditional Internet and tracking technology are insufficient to tackle something of this magnitude and complexity.
The MBC Project’s core team members comprise shipping industry veterans with nearly 30 years’ experience. They have handled shipping logistics from the Russian far east, to Southeast Asia, South Asia, the Persian Gulf, the Red Sea, the Baltic Sea, East/West Africa, the west coast of Canada, Central America, South America, the east coast of South America, San Francisco’s Bay Area, the east coast of the United States, the Black Sea, etc. Based on 30 years of shipping experience, the MBC Project team summarizes the existing international shipping dry market pain points as follows:
Issues including the difficulties in matching transaction records, the high settlement costs associated with banks, the lack of intelligent and efficient processes in the industry, and poor information flow have beleaguered dry bulk market participants for over a hundred years. Because traditional Internet technology is management intensive, it has not been possible to properly integrate information and capital flow into a single data stream. As such, current solutions are inadequate and can only partially solve the problem of wasted resources in-and-between supply chains. In contrast, blockchain technology can perfectly solve issues of international payment settlements in the international shipping dry bulk market. Additionally, blockchain technology is a natural candidate for artificial intelligence integration. The application and combination of these two emerging technologies in the international shipping industry will completely revolutionize the international shipping market.
The MBC platform will be developed by the Matrix AI Network. It will exist in the Matrix ecosystem as a sidechain. Development will include a Payment Settlement System, Financial Service System and Transaction Matching System. Leveraging the Matrix AI Network’s expertise in both blockchain and AI, shipping industry bottlenecks will be shattered.
Payment Settlement System
Because the international shipping industry crosses several borders, funds are required to flow between several banks in several countries. As a result, many payment settlement issues plague the industry; for example, untimely settlement, high settlement costs and multilateral currency exchange fees. A blockchain-based payment system presents an effective and fitting solution to these problems.
The MBC platform uses a dual token system; the MTT and the MCoin. The first is the MTT. It circulates within the MBC platform ecosystem and is anchored to a basket of currencies. It serves as a settlement token to address the need for cross-border funds. Relationships with banks will be leveraged to open legal currency channels and minimize the exchange rate risk present in multilateral currency exchanges. This will also save on the high costs of interbank settlement.
The second token is the MCoin. This token encourages platform participation by offering rewards to platform users. It can be exchanged with the MTT using a real-time exchange rate. The MCoin will be sent to select registered users of the MBC platform during the initial promotion phase. Additionally, the MBC platform will distribute MCoin to platform users who have reached certain set volumes of transaction.
Financial Service System
The data transparency enabled by blockchain technology, combined with Matrix’s technical proficiency, allows the MBC platform to implement an AI-backed credit assessment framework and use a dual credit risk scoring mechanism. Additionally, the MBC Project will work with Matrix to create an AI-backed financial service system that includes investment and financing services, shipping insurance and related legal compliance consultation.
Transaction Matching System
The MBC platform enables consensus across the vast network of ships populating the international shipping industry through the Transaction Matching System; all while supporting multiple flexible customized services. Based on Matrix’s AI technology and the MBC Project’s massive database of shipping industry customer data, goods and carriers can be matched while still allowing for third-party generated and managed intelligent contracts. Using AI to collect, match and analyze data enables the generated information relating to cargo dynamics, ship and dock information to be shared widely. This encourages the identification of real customer needs. Additionally, the MBC platform will provide a number of additional services such as route optimization, contract verification, smart ports, etc. These additional services will be opened one-by-one following the construction of the platform.
The MBC Project is committed to creating an international shipping intelligent trading platform covering the entire industry. Industry data will be used to create a high-precision artificial intelligence model. Semantic models and intelligent mathematical modeling will be used to eliminate all parties’ processing and calculation time during the course of transactions, reduce communication costs and eliminate dispute resolution costs. With blockchain technology, there is information parity as data is bound to the chain and intelligent contracts are automatically executed. Funds are immediately available to the receiving account, which ensures fund safety and improved efficiency. The MBC team’s long history, customer resources and deep connections to the shipping industry have enabled them to reach user cooperation agreements with both PetroChina — via their logistics subsidiary PetroChina (Tianjin) Logistics Limited (“中油（天津）物流有限公司”) — and the Beijing New Building Materials Company (“北新建材”). The MTT tokens issued by the platform also have a real usage and value.
The MBC platform presents a revolution in the international shipping dry bulk market. It simplifies and streamlines transactions between market participants and fortifies long-standing weak links in maritime logistics, payment settlement and legal operations. The MBC platform allows the shipping industry to achieve third-party information symmetry so that anyone can engage without pre-existing trust. The MBC platform promotes optimal operations for both ships and crew. As the world’s first international shipping company to launch an AI and blockchain solution, the MBC will guide the world’s oceans to a true digital information age.
As one signing party in the above cooperation agreement has been obscured, an explanation is in order.
The MBC team have been working in collaboration with PetroChina and the Beijing New Building Materials Company in a variety of capacities for well over a decade. To adhere to PetroChina’s legal and regulatory compliance system, a plenipotentiary representative of the MBC Project served as signing party. The operational rights, control and equity of the MBC Project do not belong to this signing party. Rather, the MBC Project will establish a new company to manage the day-to-day operations of the MBC platform. In order not to unduly impact the business operations of the signing party, all operational rights, control and shipping teams will be transferred to this new operating entity later in the development of the MBC platform. At that time, the newly-established entity will be disclosed.
It goes without saying that this transfer of rights has been pre-approved by both PetroChina and the Beijing New Building Materials Company, as stated in Article 6.2 of the cooperation agreement.