IBM and Maersk to shut down TradeLens supply chain platform
- Reference: 1669812172
- News link: https://www.theregister.co.uk/2022/11/30/ibm_and_maersk_tradelens_shutdown/
- Source link:
TradeLens was launched in 2018, with the goal of digitizing and simplifying global supply chains. The system was jointly developed by IBM and Maersk's GTD Solution division as a blockchain-enabled shipping platform designed to promote more efficient and secure global trade.
However, Maersk has now posted a [1]notice on its website saying the TradeLens team is taking action to withdraw the offering and discontinue the platform, which is expected to go offline by the end of Q1 2023.
[2]
It said that steps would be taken to ensure that customers do not experience disruption to their businesses during this process.
IBM struggles to sign up shipping carriers to blockchain supply chain platform – reports [3]READ MORE
"TradeLens was founded on the bold vision to make a leap in global supply chain digitization as an open and neutral industry platform," Maersk's head of Business Platforms Rotem Hershko said in a statement.
"Unfortunately, while we successfully developed a viable platform, the need for full global industry collaboration has not been achieved," he added, saying that as a result, TradeLens had not reached the level of commercial viability necessary to continue operating and meet the financial expectations as an independent business.
[4]
[5]
TradeLens is understood to have started out as separate initiatives at Maersk and IBM, with both organizations seeking to streamline global supply chains by digitizing the exchange of information in the shipping industry.
It was intended to address problems such as inconsistent data sharing across supply chains and issues including the number of time-consuming manual processes that increase costs and delay cargoes, according to Maersk.
[6]
On the face of it, this application would seem to be a textbook case for blockchain technology, which enables a distributed ledger of records linked together using cryptography in such a way that once transactions are recorded, they cannot be altered without also changing all subsequent blocks.
A 2019 [7]white paper from Copenhagen Business School outlined the challenges facing the shipping industry that TradeLens was aiming to address, and notes that "blockchain technology continues with proof-of-concept initiatives to attract widespread attention; however, as of 2018, very few of those initiatives had moved to real-world operating solutions, enabling them to deliver their promised business value."
According to the paper, the TradeLens revenue model was a mix of free-of-charge offerings and subscriptions, plus transaction fees, with an initial fee used for the business case calculations within Maersk and IBM of $25 per container per journey.
[8]
This is stated to be just 1 percent of the average cost of transporting one container, "hence, the potential revenue of TradeLens can be calculated by multiplying the fee by millions of container journeys," the paper stated, but adds that "within the shipping industry, charges and fees are always negotiable."
Yet it seemed the platform was having some difficulty in attracting other carriers in the shipping industry, as The Register [9]reported at the time, perhaps because it was too closely associated with Maersk itself.
"Obviously the fact that Maersk is driving this is both a really good thing and a worrying thing because they are such a big player in the industry," IBM's head of TradeLens Marvin Erdly was quoted as saying.
[10]New York cracks down on carbon fuel-based crypto-mining operations
[11]Decentralized IPFS networks forming the 'hotbed of phishing'
[12]Crowdfunding platform Kickstarter planning move to blockchain. How will it work? Your guess is as good as ours
[13]The blockchain era is here but big biz, like most folk, hasn't a clue what to do with it
We asked Maersk to clarify what it meant when it said a lack of industry collaboration had led to the decision to shut down TradeLens, but the company had not responded at the time of writing.
Maersk said in its statement that it intends to continue efforts to digitize the supply chain and increase industry innovation through other solutions to reduce trade friction and promote more global trade.
"We will leverage the work of TradeLens as a stepping stone to further push our digitization agenda and look forward to harnessing the energy and ability of our technology talent in new ways," Hershko said.
IBM declined to comment, beyond referring us to the statement issued by Maersk. ®
Get our [14]Tech Resources
[1] https://www.maersk.com/news/articles/2022/11/29/maersk-and-ibm-to-discontinue-tradelens
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y4eMMSJoWJTyytjKXAVTOQAAAAU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://www.theregister.com/2018/10/30/ibm_struggles_to_sign_up_shipping_carriers_to_blockchain_supply_chain_platform_reports/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y4eMMSJoWJTyytjKXAVTOQAAAAU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y4eMMSJoWJTyytjKXAVTOQAAAAU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y4eMMSJoWJTyytjKXAVTOQAAAAU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.researchgate.net/publication/345356583_How_TradeLens_Delivers_Business_Value_With_Blockchain_Technology
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y4eMMSJoWJTyytjKXAVTOQAAAAU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2018/10/30/ibm_struggles_to_sign_up_shipping_carriers_to_blockchain_supply_chain_platform_reports/
[10] https://www.theregister.com/2022/11/23/new_york_crypto_mining_ban/
[11] https://www.theregister.com/2022/07/29/ipfs_phishing_trustwave/
[12] https://www.theregister.com/2021/12/16/kickstarter_blockchain/
[13] https://www.theregister.com/2018/02/01/overselling_blockchain_as_a_service/
[14] https://whitepapers.theregister.com/
Re: Third wheel
It was designed to unify the supply chain and cut down on problems with communication and documentation. The problem shipping companies like this have is that everyone uses different systems, stuff is still in paper, some places have different requirements than others. A single error in a bill of lading, for instance, can end up costing a company tens of thousands of dollars to rectify. Hell, even knowing where your shipping container is can be a nightmare depending on who you're dealing with. The idea behind it was sound. The technology allowed all participants to communicate far more easily with each other, to see where their stuff was, and view all the documents associated with each consignment in one location.
But like the article says, nobody wanted to sign up, and it being tied so heavily to Maersk was a big part of that. They didn't want to dance to Maersk's tune, regardless of how many assurances they were given that the system wasn't beholden just to what Maersk wanted.
Re: Third wheel
That's all fine, but there is no place in what you said where blockchain could fit in.
Seems like it was used as a buzzword to lure investors in and then mandated to be tacked in somewhere.
Re: Third wheel
Blockchain doesn't solve the double-spend problem. Proof of work or similar solves that. But if it is on a centralised server, then there are other far more efficient ways to solve it.
The big problem here is proving that the blockchain or other database entries actually reflect what is happening on the ground, and that is not a problem that bitcoin or similar needs to address.
A shame, but not a surprise.
I worked for IBM for fourteen years, the last three of them in the team that was responsible for both Tradelens and Food Trust from the IBM side. I jumped ship because there was no work, no customers, no money coming in despite management constantly telling us to just wait, the customers would come, the work would come! Honest! Any time now!. Aaaaaaany time...
They cut the team twice in the three years I was there, so honestly this doesn't surprise me and just makes me all the more glad I quit when I did.
expected to go offline by the end of Q1 2023.
With such a short notice, it must mean that the service has zero to very, very few customers.
Re: expected to go offline by the end of Q1 2023.
Most likely just Maersk, who will probably just bring the system in-house. But as other commenters have said, blockchain is only useful if consensus is needed between multiple parties.
I've been peripherally involved in several custom products that were designed for a single customer. Then commercial get the idea that with additional work, it could be turned into a product that can be sold to many customers. Lots of work and several years later, there's still just the original site using it.
Third wheel
What the blockchain was for in that project?
Blockchain only use case when it is remotely an appropriate tool for the job is distributed consensus and "double spend" problem.
I can't see evidence in the article that would suggest they were facing such issues.
Seems like they had bad database and API design that aided inconsistencies and if you get a hammer (blockchain) then suddenly everything starts looking like a nail.