Integrated logistics company Maersk and United States technology firm IBM plan to close down their jointly-developed blockchain-based supply chain platform TradeLens in the first quarter of 2023. Both firms presented a lack of “global industry collaboration” as the main factor behind the winding down of TradeLens.
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According to Rotem Hershko, the Head of Business Platforms at A.P. Moller – Maersk, TradeLens was founded by both IBM and Maersk in 2018 on the “bold vision to make a leap in global supply chain digitization as an open and neutral industry platform.”
“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.”
TradeLens Failed to Attain Commercial Viability
The process of winding down has already started with the withdrawal of its offerings but will finally conclude in Q1.
No customers’ business will be disrupted in the process as all entities involved will ensure that they are attended to. Also, Maersk assured the public that it has no plans to discontinue its effort to digitize the supply and logistics sector. Instead, it will continue to increase industry innovation via another approach.
“We will leverage the work of TradeLens as a stepping stone to further push our digitisation agenda and look forward to harnessing the energy and ability of our technology talent in new ways,” Rotem Hershko confirmed
The aim is to reduce the friction experienced in the trade and eventually, promote global trade.
When it was founded more than four years ago, logistics industry players were introduced to more efficient international supply chain practices. However, Maersk issued an apology, clarifying that it never expanded to the point of ‘commercial viability’ which would have made the operations sustainable.
Notably, many other organizations are exploring how to use Distributed Ledger Technology (DLT) to solve the problems of supply chain and logistics. Even as TradeLens did not attain the envisioned height, about 150 businesses still adopted it. CMA CGM and Mediterranean Shipping Company are part of the companies which integrated the system into their operations.
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