Blockchain-based supply chain platform canned by IBM and Maersk

US technology company IBM and Danish logistics firm Maersk have decided to discontinue their co-developed blockchain-backed supply chain platform, TradeLens, citing a lack of “global industry collaboration” as a key reason behind the decision.

Maersk stated on 29 November that it has begun taking immediate measures to halt operations on the platform, which will take full effect by Q1 2023:

“The TradeLens team is taking action to withdraw the offers and decommission the platform […] During this process, all parties involved will ensure that customers are taken care of without disruption to their business.”

While the blockchain-based shipping solution was introduced by the two firms in August 2018 to help industry participants adopt more efficient international supply chain practices, Maersk stated that the platform did not reach a level of “commercial viability” to sustain operations:

“While we have developed a viable platform, the need for full global industry collaboration has not been achieved,” said Maersk’s Head of Business Platforms, Rotem Hershko. “As a result, TradeLens has not reached the level of commercial viability necessary to continue operating and meet its financial expectations as an independent business.”

Maersk said the firm will continue its efforts to digitize the supply chain and increase industrial innovation through alternative solutions to achieve the desired goals envisioned through TradeLens.

TradeLens worked by tracking and processing critical supply chain data for each shipment in real time, before stamping a distributed and immutable record of events in the chain for all involved participants to access and validate.

Related: How is blockchain technology used in supply chain management?

Despite TradeLens not reaching the heights that IBM and Marersk initially envisioned, the two companies were able to integrate over 150 companies on the supply chain-focused blockchain that included a number of port operators, shipping companies and logistics providers.

Among these companies were two of the world’s largest container ships, CMA CGM and Mediterranean Shipping Company, which integrated the system in October 2020.

The discontinuation of TradeLens comes as data from IBM claims the platform saved users an estimated 20% in documentation costs and reduced the time it takes to ship goods by 40%.

According to Statista, blockchain technology makes keeping data records easier, more transparent and more secure, mainly due to its immutable nature.

Despite this, several shortcomings continue to hold back blockchain adoption in the supply chain world, including high transaction costs, privacy concerns, scalability issues and a lack of industry collaboration, as evidenced by the lagging adoption of TradeLens.