IBM has admitted that its blockchain-based trade platform, set up with shipping giant Maersk, is struggling to gain traction with other carriers.

The joint venture began about 10 months ago with the aim of simplifying the cost, complexity and size of global shipping networks, while offering more transparency and cutting the costs and time involved. The platform, named TradeLens, was officially launched in August.

The product uses distributed ledger technology to establish a shared, immutable record of all the transactions that take place in the network, so the various trading parties can gain, with permissions, access to that data in real-time.

Maersk’s Michael White said in a blogpost at the launch that this would tackle industry issues such as inconsistent data, “complex, cumbersome and often expensive peer-to-peer messaging” and “inefficient clearance processes”.

IBM and Maersk began collaborating on blockchain in June 2016, and the reason for launching the joint venture was to allow them to commercialise the product.

TradeLens – which is sold as an “open and neutral platform” – has had some successes in signing up port operators and customs authorities: in the summer, it named a group of almost 100 adopters, and just last week added the Port of Montreal to that list.

It also announced that the Canada Border Services Agency, which processes more than 14,400 trucks and 127,400 courier shipments and collects more than CDN$88,200,000 in duty and taxes a day, was trialling TradeLens.

However, if the platform is to be a success it needs to convince more container carriers to join, as this will allow traders to manage inventory across different carriers. And, with just one carrier – Asian firm Pacific International Lines – signed up, it is struggling.

Even IBM is reported to have acknowledged the problem it is facing. As head of TradeLens at IBM Blockchain, Marvin Erdly, told blockchain publication CoinDesk: “We do need to get the other carriers on the platform. Without that network, we don't have a product. That is the reality of the situation.”

There appears to be broad support for the principle of an industry-wide blockchain standard that can be used for ocean shipping, and so the companies are concerned that the prominent role of Maersk – the world’s largest container shipping company – is putting off rivals.

"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,” Erdly is reported to have said. “As you can imagine that's going to be a factor."

Indeed, Shipping Watch reported in May that execs at carrier giants Hapag Lloyd and CMA CGM had warned against platforms that one firm controlled, calling for wider governance.

"Technically the solution (by Maersk and IBM) could be a good platform, but it will require a governance that makes it an industry platform and not just a platform for Maersk and IBM,” Hapag Lloyd CEO Rolf Jansen is reported to have told a conference.

“This is the weakness we're currently seeing in many of these initiatives, as each individual project claims to offer an industry platform that they themselves control. This is self-contradictory.”

IBM and Maersk do seem aware of the issue: Maersk has established an operational subsidiary to manage staff on the project, which the pair say “ensures TradeLens’ independence from other Maersk business units”.

In addition, the duo say they are in the process of setting up an advisory board to work with TradeLens leaders “to address key issues such as the use of open and fair standards”.

But the IP created from the work is jointly owned by IBM and Maersk – so the creation of a subsidiary and an advisory board could well be seen by the rest of the industry as sticking plasters not solutions.

The Reg has asked IBM for further details on plans for the advisory board and any other measures it might have planned, and will update this article if we hear back. ®

Updated to add

An IBM spokeswoman told us the biz is taking the concerns about equity and governance on board, and has worked with carriers to address them.

“As a result, a range of carriers on both the global and regional level recognize the TradeLens solution,” she said.

“Currently, discussions are progressing regarding potential pilots or full network participation with several of them.” The advisory board, the spokeswoman added, “will provide guidance and feedback to help drive open and fair standards for the TradeLens platform."