Amann Shipping has just handed over a boxship to its new Chinese owner, but for the Bruneian liner and bulker player the ship will live on in virtual form.
Tapping blockchain technology allowed the creation of a complete, secure record of the life of the ship, that could provide a very practical solution for handling documentation in future vessel transactions.
Amann delivered its pioneer containership, the 411-teu Padian 1 (built 1999), to its new Hong Kong-based owner Yongwang Shipping on Tuesday.
Lorne Lei, Amann’s general manager, told TradeWinds that the company decided to sell the ship after receiving a good offer.
Digital asset
Commercial decisions may have influenced Amann’s decision to sell, but the sale was tinged with sentimentality. It was, after all, the company’s first vessel.
To mark the symbolic end of the ship’s career with Amann, a non-fungible token (NFT) was minted to digitally represent the ship, allowing it to stay forever with the company in virtual form.
Increasingly popular in the art world, NFTs are tokens of ownerships for digital assets. They can be traded using blockchain technology, the same digital ledger software that many cryptocurrencies use, which protects them from forgery and fraud by using a unique digital signature to establish provenance and ownership.
Digital artwork by artist Mike Winkelmann, also known as Beeple, sold for a record $69.3m earlier this year.
Practical applications
The Pandian 1 NFT appears as an animated profile picture of the ship. It contains unlockable digitised records of the ship, include its ownership certificate and survey records, its principal particulars, structural drawings, capacity plans and other records and photographs.
"Padian 1 no longer physically exists after she's sold, but this ship NFT together with her proven digitised identity and history will remain on the Ethereum blockchain indefinitely. That's exactly what NFTs can do," said Roy Chan of Legalmapp, a maritime lawyer and NFT strategist who was commissioned to create what he claimed is the world’s first ship NFT.
“This ship NFT is a unique collectible item dedicated to the memory of this ship and to commemorate the hard work and services of those who had worked on board and for this ship,” he added.
Chan said that similar applications could also have a more practical implications for sale-and-purchase transactions as an NFT-type token containing a complete and secure set of records for a ship could be transferred along with a physical vessel whenever it is sold.
Under current practices, vessel records are usually transferred using email, a time-consuming process that is restricted by the megabyte capacity allowed by email servers.
NFTs have no capacity restrictions and can be downloaded instantly.
Chan said the idea to create a ship NFT came when he was approached by a company that wanted to conduct an entirely virtual sale of a physical ship.
However, he cautioned that more research into the technology is required to adapt it to create a moving record of a ship that can be added to over time.
“The problem with an NFT such as the one minted for the Padian 1 is that it is not amendable. It is an historical record that is frozen in time,” Chan explained.
“We are exploring more use-cases for the technology. Creating a token that is a record of one ship could also be very useful if S&P transactions are done via blockchain in the future,” he said.
Virtual museum
For Amann, the Padian 1 NFT will be kept as an historical record.
“This ship is very meaningful to our company and I want to preserve this permanently,” Lei said.
Amann was formed in 2015 as a joint venture between the Brunei Government and Hong Kong’s Go-Wide Shipping.
The sale of the Padian 1 leaves it with three feeder-size containerships that it operates on routes linking Brunei Darussalam with Singapore.
A pair of general cargoships along with a supramax and a panamax bulker round up its fleet.
Lei said that while the company may buy other vessels in the future, none will be named Padian 1, as it will be “dedicated to the one we just sold”.
“The name of Padian 1 will be the history in our company,” he concluded.
