Panalpina identifies applications of blockchain technology, begins pilot projects

According to Panalpina, blockchain technology has so far not yet reached its full potential, with almost 90% of all supply chain related projects remaining in the proof-of-concept stage until 2020. The company, which joined the Blockchain in Transport Alliance (BiTA) in May 2018, also said that blockchain tends to suffer from a lack of trust and community onboarding, something that the technology is supposed to be built around.

“Panalpina is not a blockchain evangelist, but we have a rational and realistic approach towards the technology,” said Luca Graf, head of digital innovation at Panalpina. “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 practical use cases for blockchain identified by Panalpina include: ocean freight core processes, ocean freight electronic bill of lading, captives, perishables, pharmaceuticals, spare parts, insurance and tracking.

In addition to starting projects to explore the electronic bill of lading, Panalpina has also launched a blockchain project with an IT company to optimize airfreight shipments from North to South America. The company plans to look at pharmaceuticals, spare parts and ocean freight core processes in the next phase.

“These early-stage projects are 85% about digitization and 15% about blockchain – we are starting to see clear benefits in cost savings through simplified and speedier processes, and lower document courier costs,” said Cedric Rutishauser, senior venture development manager at the Panalpina Digital Hub. “But the real advantage of blockchain lies in the ‘single source of truth.’ Improved data sharing between trade partners creates more transparency, with clear ownership and responsibility for each documented step in the supply chain.”

A team of IT developers from Panalpina will take part in the Swiss Blockchain Hackathon later this month. Panalpina and Cargolux have jointly defined one of the three major challenges to be solved during the event as creating a solution which ensures traceability and authentication of unique products within the pharma supply chain.