The International Business Machines Corporation, an American multinational technology corporation, and Maersk, a Danish logistics firm, have decided to terminate their ongoing blockchain project. In 2018, the firms collaborated to develop a blockchain-based supply chain, “TradeLens”; however, they decided to discontinue it, citing a lack of global industry collaboration.
TradeLens was designed to help industry participants adapt to more efficient global supply chain practices. As per Rotem Hershko, head of business platforms at Maersk, the platform couldn’t reach the desired level of “commercial viability” required to sustain the operations.
“TradeLens has not reached the level of commercial viability necessary to continue work and meet the financial expectations as an independent business.”
The blockchain-based supply system functioned by tracking and processing critical supply chain data of every shipment in real-time before authorizing a distributed and unchangeable set of events. The records and data would be accessible to all the participants.
On Tuesday, the logistics firm stated that it has initiated taking immediate action to stop the operations on the platform and would be completed by the first quarter of the coming year. The platform’s workforce addresses the clients’ needs without affecting their businesses.
“The TradeLens team is taking action to withdraw the offerings and discontinue the platform. During this process, all parties will ensure that customers are attended to without disrupting their businesses.”
The firm also announced its plans to continue digitizing the supply chain and contribute to the industry innovation it had aimed through the TradeLens via other options.
TradeLens, before being discontinued, had managed to board over 150 companies on the platform, which also comprised port operators, shipping companies, and logistics providers. The companies on board also comprised several big industry names, including two of the world’s largest container carriers, CMA CGM and Mediterranean Shipping Company. The companies integrated the system in October 2020.
IBM also claimed that the platform helped the users save a reasonable sum of about 20% of documentation costs. It also helped reduce the time required to ship the goods by approximately 40%.
Statista, a German company specializing in market and consumer data, opines that blockchain technology helps in the storage of data and also makes it more transparent and secure, given its immutable nature.
Several shortcomings have been stalling the adoption of blockchain in the supply chain world, like the high transaction costs, privacy concerns, scalability issues, and lack of industry collaboration, as prevalent in the case of TradeLens.
Earlier this month, the Australian Securities Exchange (ASX) also suspended its seven-year-old initiative to expand its CHESS clearing and settlement system using blockchain. ASX created CHESS (Clearing House Electronic Subregister System) 25 years ago to handle electronic securities trading. The initiative reportedly resulted in a pre-tax loss of about $170 million (approximately AUD 255 million).
However, several countries across the globe have continued to adopt the blockchain system for their operations. In July, Colombia’s Ministry of Information and Communications Technologies (MinTIC) began piloting blockchain-based use cases and framed a guide for its use. The country envisions improving conventionally time-consuming processes for everyday citizens and making them less opaque.
In October, the President of Turkey announced the “e-Human project.” The project will be based on blockchain technology to integrate the services, data, and abilities used by the systems under substantial safety and protection. It is a digital service point where the Turkish president can share information related to the government’s services.