Panalpina has launched a digital Hub to “embrace new technologies” that have the potential to disrupt its freight forwarding business.
The Panalpina Digital Hub, which reports directly to chief executive Stefan Karlen, will have a focus which includes the Internet of Things (IoT), cloud computing, predictive analytics, artificial intelligence (AI) and blockchain.
The Switzerland-based logistics giant said that the hub will explore “innovative technologies, develop new digital solutions for customers, and engage with digital start-up companies”.
Said Karlen: “We, like many of our competitors, are challenged by new market entrants, with innovative business models and digital approaches that improve upon the old way of doing things.
“Additionally, our customers increasingly demand the digital experience they have become accustomed to as consumers: they now expect a similar experience in a business-to-business environment.”
Karlen added: “It is therefore obvious that the frontier of freight forwarding and logistics does not lie in new modes of transport, but in digital transformation.
“Knowing that, we want to shape our industry’s future with innovative digital solutions that create new levels of value for our customers and accelerate growth for our company in the years to come.”
IoT is a technological development whereby all sorts of devices like smartphones and computers are connected to the internet.
Luca Graf, head of the Panalpina Digital Hub, said: “In the short term, IoT can help us streamline our processes and create more efficient supply chains. The challenge will lie in deriving the relevant actions from the wealth of IoT data.
“Predictive analytics and artificial intelligence will optimize products and services and create new ones, as can currently be seen in Amazon’s recommendation engine.
“Blockchain technology, which creates a digital record of every transaction made in a decentralized and secure way using cryptography, has the potential to disrupt the industry in the long term by impacting contracts, freight payments, chain of custody, and other issues facing the industry."
While conceding that it is “difficult to predict when blockchain will reach commercial break-through,” Panalpina plans to start pilots with the new technology in the third quarter of 2018. Recently, Panalpina also joined the Blockchain in Transport Alliance (BiTA).
The Panalpina Digital Hub also acts as a gateway “to the bustling community of digital start-up companies, beginning with the European ecosystem,” stated the forwarder.
Graf added: “For the moment, we are focusing on European start-ups of a certain maturity. Further down the road, we will expand our network to the USA, Israel and China.”
Panalpina sees three options to engage with start-ups: “To partner with a start-up and act as a vendor for certain applications (SaaS, Software as a Service); to enter into a strategic partnership where the start-up develops customized solutions for Panalpina, allowing the company to enter new markets; or Panalpina could also buy a stake in a start-up.”
The Panalpina Digital Hub is based in Zurich, Switzerland but its experts will also be present in Berlin and Hamburg, two European hotspots with a very strong digital start-up scene, said the forwarder.
“We will engage with promising digital start-ups and work closely together with our colleagues in Air and Ocean Freight, Logistics, IT and finance, to bring viable and value-adding digital solutions into daily practice,” said Graf.
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