Panalpina pilots blockchain for ocean, air freight document tracking

Dive Brief:

  • Swiss freight forwarder Panalpina has begun a blockchain pilot to digitize bills of lading, the company announced in a blog post yesterday.
  • Panalpina will work with two companies on this pilot, but it did not release the names, saying one is in high-tech industrial goods and the other office supplies. It is also working on an air freight application for blockchain with an unnamed IT company. Panalpina did not respond to a request for comment when asked for more details on these companies and the pilot’s timeline. The blog post underscored it is taking a pragmatic approach to blockchain technology.
  • “These early-stage projects are 85 percent about digitization and 15 percent about blockchain – we are starting to see clear benefits in cost savings through simplified and speedier processes, and lower document courier costs,” Cedric Rutishauser, the senior venture development manager at the Panalpina Digital Hub, said in a statement.

Dive Insight:

Panalpina acknowledged some of the current skepticism surrounding blockchain in its announcement, citing a 2018 report from Garter which said 90% of all blockchain pilots will remain in proof of concept stage through 2020.

“Panalpina is not a blockchain evangelist, but we have a rational and realistic approach towards the technology,” Luca Graf, head of Digital Innovation at Panalpina, said in a statement. “Blockchain is only one part of a larger vision that requires the Internet of Things (IoT) and smart contracts to exploit the full potential for end-to-end supply chains, with beneficial effects on costs and time.”

The pilot will digitize shipping documents including packing lists and bills of landing. These will be stored in a cloud environment and the blockchain will document the flow of goods as they travel from Asia to Europe. This system will be running in parallel to the existing equivalent process during the pilot, allowing Panalpina to easily compare the two.

It’s not clear how long Panalpina​ plans to pilot this technology, but the company said it will look into using blockchain with pharmaceuticals, spare parts and the ocean freight core processes in a “next phase.”

While criticisms of blockchain’s heavily-hyped possibilities mount, especially surrounding its technological immaturity, the shipping industry has seen enough promise to start not one, but two blockchain initiatives focused on ocean shipping. Both the Global Shipping Business Network and TradeLens continue to add carriers to their networks

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