Meet Paket: The Start-Up That's Decentralizing Global Deliveries

Meet Paket: The Start-Up That’s Decentralizing Global Deliveries

Paket is developing a trustless, secure, and global network for parcel deliveries using its native BUL token. Here’s your primer on what the company is calling “the world’s first decentralized open marketplace for parcel deliveries.”

This is a sponsored article provided by Inbound Junction

Despite the proliferation of online goods and services, the market for parcel deliveries shows no signs of waning. In fact, precisely the opposite. One Accenture report stated that the global parcel delivery market is growing by 9% each year. This is driven mainly by the growth in e-commerce, which has caused business-to-consumer (B2C) deliveries to outpace business-to-business (B2B) deliveries.

These changes have led to one of the most significant challenges facing the parcel delivery industry—that of “the last mile.” Typically, market leaders like DHL and UPS have no issue moving goods to and from major transport hubs. Getting a parcel to the residential address of a home consumer, on the other hand, presents the biggest challenge in the parcel life cycle.


While B2B deliveries were concentrated around major hubs, this was less of a problem. However, consumers are a far more scattered customer base. So, the problem of “the last mile” has increased without a ready solution, at least so far.

The peer-to-peer connectivity of blockchain could soon solve this problem. One company currently set to enter the market is Paket. The company is creating what it calls “the world’s first decentralized open marketplace for parcel deliveries.”

How Decentralized Parcel Delivery Can Work

Paket is developing a trustless, secure, and global network for parcel deliveries using its native BUL token. To use a straightforward example, let’s say Alice in Argentina wants to ship a parcel to Bob in Barbados.

Alice gives her parcel to Colin the courier, so he can deliver it to Bob’s address in Barbados. Alice and Colin agree on how many tokens will be paid to Colin as a fee for him to deliver Alice’s parcel. At the same time, they agree that Colin will commit a collateral payment to Alice, also in tokens, as a form of insurance in case Colin fails to deliver the parcel to Bob.

Finally, they agree on a “transfer deadline,” the final date by which Colin will deliver the parcel. Both the payment and the collateral are held in escrow using smart contracts until Bob confirms to Alice that the package was delivered. Upon confirmation, the smart contract executes the release of Alice’s payment to Colin and returns his collateral payment.

Payment Security

To ensure the security of Alice’s payment (continuing the example from above), if Colin does not deliver the parcel to Bob before the transfer deadline, his collateral payment is released to Alice as compensation. Her fee is also refunded.

The fee charged for the delivery and the value of the collateral are entirely flexible and agreed together by Alice as the sender and Colin as the courier. In general, the value of the collateral will reflect the value of the parcel contents.

If Alice is sending something expensive like jewelry, for example, she may request a higher collateral payment as insurance against loss. Similarly, Colin may demand a higher payment fee for delivering something more expensive, as it creates more risk for him.

Multi-Leg Deliveries

The hypothetical example above is simple in that it requires only one courier taking a single route. In reality, a blockchain-based system utilizing smart contracts can be designed to allow for a parcel to be passed between multiple couriers. Each courier who takes custody of the parcel will receive part of the payment that the sender has agreed to pay.

Any courier taking custody of the parcel would also have to cover the collateral payment requested by the sender until they either make the delivery or pass it on to the courier at the next leg of the journey. In this way, complicated, multi-leg shipments can be undertaken between any two points in the world.

Uniting a Fragmented Market

Today, the parcel delivery market is fragmented. There are a few major global shipping providers such as UPS or DHL. Aside from these, there are numerous companies and individuals providing more localized courier services at different locations throughout the globe.

However, in the current market, most of these parties are not interconnected and operate entirely independently of one another. This creates a tremendous amount of inefficiency and also means that there are many parts of the world, particularly developing countries, that are underserved by delivery networks.

The industry recognizes this complexity and has already taken steps to form an alliance with the goal of using blockchain technology to develop common standards and try to better integrate the sector. The Blockchain in Transport Alliance (BiTA) was founded at the end of 2017. It comprises big names in the freight industry, such as FedEx and UPS, along with technology firms like SAP and HP, and smaller blockchain firms.

Decentralization of the freight industry would allow full market integration and create the opportunity for efficiencies—particularly around “the last mile.” It would create better opportunities for smaller businesses or even individuals to get involved. The average daily commuter who makes the same journey to work each morning could earn income on their commute by taking a parcel along with them in the car.

Routing in Real-Time

Building an integrated system will also permit real-time routing. To use Paket as a further example, the system will contain a technical layer that serves to figure out the shortest and fastest route for any parcel requiring delivery. An interesting feature is that this layer can determine the best path for the packet in real-time, based on the quickest and cheapest options available for each leg.

The parcel delivery industry operates hand-in-hand with many other sectors that are also ripe for being shaken up by blockchain, such as insurance or supply chain. All of these sectors have for many years been dominated by big players in the market. With so many new blockchain startups entering the arena, it will be fascinating to see which survive the course.

Image via Pixabay, Paket

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