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Danish logistics company Maersk and US tech firm IBM have decided to close TradeLens. TradeLens is a blockchain-based supply chain platform co-developed by both entities.

Both companies cited inadequate collaboration in the global industry as the reason for the decision. Meanwhile, Maersk noted that it would continue on other projects to digitize the supply chain sector.

On November 29th, Maersk announced its decision to close TradeLens. The Danish firm has commenced actions to stop operations on the blockchain-powered platform. Additionally, it stated that this shutdown would take effect in Q1 2023.

“TradeLens team is taking steps to withdraw its services and terminate the program. During the process, the team will ensure that users receive full attention and enjoy the platform before its discontinuation,” the announcement read.

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Maersk and IBM first launched the program in 2018. It aimed to help industrial firms embrace more efficient practices in their supply chain.

However, Maersk complained that the company did not attain commercial viability. Hence, the platform can no longer sustain its operations.

Maersk also complained about the lack of collaboration from the global industry. Nevertheless, the Danish logistics firm said it would maintain its attempts to automate the supply chain.

“We would also encourage industry innovation by implementing alternative solutions to reach the desired objectives envisaged through TradeLens,” Maersk added. TradeLens was able to perform its functions by recording and analyzing crucial supply chain information of every shipment in real-time.

Afterwards, the platform would create an immutable and distributed record of events on the chain, which all involved players could access and confirm.

Over 150 Firms Joined The TradeLens Platform

Meanwhile, TradeLens did not attain the height of development that Maersk and IBM envisioned. Yet, both firms onboarded about 150 organizations into the blockchain-based supply chain platform.

Among the onboarded companies are logistics providers, port operators, and shipping firms. Besides, the Mediterranean Shipping Company and CMA CGM, the two largest container carriers in the world, adopted TradeLens in 2020.

The news of TradeLens 2023 termination is coming after a recent report from IBM. IBM claims that TradeLens saved its users 20% in the cost of documentation. Also, the time it took to ship goods dropped by about 40%.

Per Statista data, blockchain tech has several benefits. This tech makes storing and maintaining data records simpler, more secure, and more transparent. This is mainly because the system is irreversible.

However, several drawbacks prevent blockchain from becoming widely used in the supply chain sector. These drawbacks include the high cost of transactions, scalability issues, and privacy concerns.

Another major setback is the industry’s lack of collaboration and support. This is evident judging from the slow adoption of TradeLens by most companies.

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George Ward

By George Ward

George Ward is a crypto journalist and market analyst at Herald Sheets, known for his engaging articles on the latest digital currency trends. With a background in finance and journalism, he presents complex topics accessibly. George holds a degree in Business and Finance from the University of Cambridge.