TradeLens, an open and neutral industry platform underpinned by blockchain technology started by Maersk and IBM to offer customers digital freight solutions will soon be no more.
In what many are seeing as a blow to the efforts to digitalize the shipping and freight industry, A.P. Moller – Maersk (Maersk) and IBM announced on 29th Nov 2022 their decision to withdraw the TradeLens offerings and discontinue the platform.
Commenting on the reason for this decision, Rotem Hershko, Head of Business Platforms at A.P. Moller – Maersk said “TradeLens was founded 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.”
As per a release on the Maersk website, the TradeLens team is taking action to withdraw the offerings and discontinue the platform with the platform set to go offline by end of Q1 2023.
The release advised that Maersk will continue its efforts to digitise the supply chain and increase industry innovation through other solutions to reduce trade friction and promote more global trade.
“We are deeply grateful for the relentless efforts of our committed industry members and many tech talents, who together have worked diligently to advance the digitalisation of the industry through the TradeLens platform. 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,” said Rotem Hershko.
The TradeLens platform was announced in 2018 and jointly developed by IBM and GTD Solution, a division of Maersk, as a blockchain-enabled shipping solution designed to promote more efficient and secure global trade.
Surprise announcement of TradeLens closure
The announcement has come as a surprise to many in the industry, as the platform was considered by many to have a transformative approach to immutable visibility for all participants, fostering engagement among various stakeholders in the chain including ports, customs brokers, truckers, and shipping lines.
TradeLens’s electronic bill of lading (eBL) system was also approved by the International Group of P&I Clubs (IGP&I) for use by its members in 2021.
TradeLens platform received a major boost on the 23rd of December 2019 when The Federal Maritime Commission (FMC) published “The TradeLens Agreement” which “authorizes the parties to cooperate with respect to the provision of data to a blockchain-enabled, global trade digitized solution that will enable shippers, authorities and other stakeholders to exchange information on supply chain events and documents.”
CMA CGM, Maersk, Hapag Lloyd, MSC, and ONE were listed as the Parties to the Agreement whereas IBM and Maersk GTD Inc have been named as Platform Providers.
What will happen to these initiatives on the back of this announcement remains to be seen.
Way forward for others in this space
While there are several naysayers and “I told you so” ers gloating on social media about this announcement, the industry view is that this should not be seen as an unsuccessful venture.
TradeLens has proved that the concept works but like any business, a concept requires adoption by the industry and in the case of electronic bill of lading and electronic trade documentation, widespread adoption by the industry has been delayed due to many reasons that have been discussed here previously. The endorsement by IG P&I Clubs and the FMC is a testament to its use and benefits.
However, the world of electronic and paperless trade documentation continues with its innovations and work of reducing the barriers to electronic trade with the likes of South Korea having acceded to The Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific on 29th Nov.
The United Kingdom’s efforts to legislate electronic trade document transfer are also continuing, with the Bill in Parliament undergoing debates.