A.P. Moller – Maersk and IBM announced that they have decided to discontinue their much-hyped TradeLens offering, a blockchain-enabled global trade platform, that promised to make the global supply chain making it more efficient and secure. Analysts are saying the industry continues to be slow in its adoption of technology and was skeptical of a product in part owned by a competitor.
Launched in 2018 as a joint venture between IBM and GTD Solution, a division of Maersk, TradeLens was designed to use IBM blockchain technology as the foundation for digital supply chains empowering multiple trading partners to collaborate by establishing a single shared access to real-time shipping data and shipping documents.
“TradeLens was founded on the bold vision to make a leap in global supply chain digitization as an open and neutral industry platform,” said Rotem Hershko, Maersk Head of Business Platforms. “Unfortunately, while we successfully developed a viable platform, the need for full global industry collaboration has not been achieved. As a result, TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business.”
During its five years of existence, the platform had managed to attract a network of over 300 members cutting across ocean carriers, port terminals, inland depots, customs authorities, and intermodal providers. In 2020, the companies reported that the TradeLens platform had grown to more than incorporating data from more than 600 ports and terminals, including 10 carriers and a total of 175 organizations.
The developers cited the shipping industry as having desirable attributes to run on blockchain, mainly due to its large networks of disparate partners. Thus, a distributed ledger technology they promoted the platform as a tool that would help in improving supply chain visibility. Some analysts however are attributing TradeLens failure to mistrust between shipping players, especially when it comes to data exchange.
“In an industry where we are still using glorified spreadsheets and sharing data using XML files over email, does blockchain technology really have its place? Maybe. But the application of blockchain in the global supply chain has to come naturally. Do not build a product and expect customers to come. Build a product that you know has customers ready to go,” commented Antony Miller, Logistics and Supply Chains technology expert.
Maersk said despite the platform’s failure, they intend to continue efforts to digitize the supply chain and increase industry innovation through other solutions to reduce trade friction and promote more global trade.
The TradeLens team immediately began a process to withdraw the offerings and discontinue the platform. They are targeting going offline by the end of the first quarter of 2023.
While the Maersk-supported offering is going offline, the industry remains committed to digitalization and analysts are saying there remains a place for blockchain applications. The Kong Kong-based Global Shipping Business Network emerged as the largest competitor with the support of a range of industry companies, including carriers COSCO and Hapag-Lloyd as well as port operators Hutchison Ports, SPG Qingdao Port, PSA International, and the Shanghai International Port Group.