Blockchain won’t die with TradeLens; write it off at your peril

Blockchain has encountered turbulence since the technology was first touted in the enterprise market. Most recently, Maersk reported that it and IBM would be discontinuing TradeLens, which many considered the poster child of enterprise blockchain when it launched in 2018, followed by countless articles labeling it a “success.” We’ve seen claims this news marks the end of enterprise blockchain, proving the technology isn’t effective for enterprises. That’s simply not true. If your organization is considering enterprise blockchain, don’t write it off just yet.

TradeLens came at the peak of blockchain hype, and that’s why it’s in the headlines today

TradeLens, founded by IBM and Maersk, is a blockchain-fueled platform that follows cargo from origin to destination, connecting and informing all relevant stakeholders en route. The platform was announced in August 2018 and promised to digitize global supply chains and enable ecosystem data sharing between international shipping firms, all leveraging blockchain. At the time, blockchain was stealing headlines at the peak of its hype cycle, but very few genuine business cases had emerged, so TradeLens became the poster child. To that end, TradeLens’ demise caused an outcry that blockchain was behind its failure, but the official line from Maersk is TradeLens “did not reach the level of commercial viability necessary to continue.” But was blockchain the problem?

TradeLens’ failure was not a technology problem…

TradeLens failed to overcome the reliance on paper-based documents in international shipping, particularly paper bills of lading (the legal document that details goods and their destination). Even TradeLens’ e-bills of lading offering couldn’t eliminate paper-based processes. We attribute this to a lack of stakeholder buy-in, as digitizing bills of lading requires organizations globally to accept the new format. Further, many governments didn’t recognize the possession of digital records. In fact, the UK only recently announced the Electronic Trade Documents Bill, allowing carriers to digitize bills of lading.

But that wasn’t the only hurdle TradeLens couldn’t overcome. IBM and Maersk planned for TradeLens to serve the wider global shipping industry—not just Maersk—but shipping firms reportedly couldn’t overcome Maersk’s involvement in the project. Despite being registered as an independent entity and marketed in its own right, the perception remained that TradeLens was a Maersk offering, and the shipping industry didn’t have the appetite for sharing confidential data with a competitor.

Instead of abandoning their blockchain projects, enterprises should take three learnings from the closure of TradeLens

• Confirm blockchain is the right solution: In the early years of enterprise blockchain, we saw very questionable applications, and now we’re seeing initiatives from that era wind down. Enterprises must ensure blockchain is the right solution for their problem and that it will deliver genuine business value; otherwise, they should look elsewhere. We wrote something in 2018 that might help.
• Be ready for technology: The most exciting technology can only do so much, and blockchain is no different. Before developing a blockchain solution, enterprises must ensure their process is ready for disruption and their people are ready for change. Ultimately, this proved to be one of TradeLens’ biggest downfalls, so it should serve as a warning to every organization exploring enterprise blockchain.
• Avoid biased central authority: If you’re developing a blockchain-fueled offering that extends beyond your organization, be wary of becoming a biased central authority. One of the key drivers of blockchain adoption is trust, and if one organization has added benefit, stakeholders are less likely to consider it a genuine solution. Perhaps this adds more fuel to the fire as organizations lean to public blockchains like Ethereum in search of true decentralization, something we discussed here.

The Bottom Line: Don’t overlook blockchain for enterprises. Instead, drive forward with blockchain exploration—but heed our advice.

There’s an endless list of reasons blockchain-fueled projects are winding down en masse. For enterprises, this shouldn’t mark the end of blockchain. Instead, it should act as a warning to carefully consider and assess their blockchain use cases—but don’t write them off completely.