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Blockchain Technology to Help Air Cargo Industry Save $400 Million


The rise of blockchain in air cargo industry has been picking up traction. Blockchain-based solutions are becoming a standard in ticketing, supply chain, and air cargo operations.

Today, SITA – an air transport communications and information tech company, and ULD Care – a trade association, are exploring the possibility of using blockchain technology to save $400M a year in the air cargo industry.

Reduce cost and improves efficiency

Blockchain in air cargo operations helps companies to digitally track and manage the custody of cargo containers or Unit Load Devices (ULD). Their accurate tracking across various destinations is maintained securely in digital ledgers. These companies wants to reduce transportation costs, increase efficiency, eliminate losses, and improve cargo security using blockchain.

Bob Rogers, Vice President and Treasurer, ULD Care, said: “Air cargo represents only 1% of all global trade in terms of volume but accounts for 35% of the total trade value and the inefficiency is significant. A container traveling from Shanghai to Long Beach could take up to 30 days to finish its journey, but the true travel time on sea or road is only around 15 days, with the remaining time spent on back-office and paperwork. The use of blockchain could revolutionise that process.”

Today more than 800 million ULDs are in use by airlines yet the system used to track these ULDs has only been partial digitalised and relies on incomplete data sharing and record keeping.

The blockchain platform will also embed authentication and trust-based functions to reduce the risk of tampering, cybercrime, trade-based money laundering and fraud.

Up to 12 custodians

For any given shipment there can be up to 12 custodian companies monitoring and tracking the cargo, with many relying on paper documents making the process cumbersome and undermined by trust and transparency issues. Blockchain presents a near-perfect solution to address these industry pain points with huge time and cost-saving potential.

Matthys Serfontein, President of Air Travel Solutions for SITA pointed out that blockchain’s potential goes way beyond cargo, and could solve common airline challenges in general. Adding:

“We are looking at blockchain very closely and we’re excited to test the potential of the technology to transform the air cargo industry. Beyond cargo and across the air transport industry we see huge potential for blockchain to address common challenges. The biggest obstacles standing in the way of a seamless passenger journey and truly efficient air travel, are the siloed processes across the many stakeholders, including airlines, airports, ground handlers and control authorities. They act as significant speed bumps at every step of the way.”

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