Air industry eyes £300m savings through blockchain for cargo efficiency

The air industry’s continued investigation into how blockchain can improve efficiency has unearthed more than £300m of potential savings by using the technology to track and record cargo as it changes hands on its journey from producer to customer.

A collaboration of air transport companies, known as the Global Blockchain Alliance, spearheaded by industry-owned IT supplier SITA, is currently looking at various applications for blockchain in the sector. The alliance was formed to initially investigate the use of blockchain to manage the logistics associated with aircraft parts.

The latest idea to digitally track cargo containers stems from work between air logistics trade association ULD Care and SITA. Unit load devices (ULDs) are pallets or containers that carry cargo on aircraft. About 800 million of them are used by airlines across the world, but current tracking systems are only partially digitised.

The plan is to use blockchain to track these ULDs and record which organisation has taken custody of them through their entire journey. The current digital platform used by airlines has limits to visibility because it does not enable third parties such as handling companies access, but this will change on the blockchain platform through the use of application programming interfaces (APIs).

Data will be input to a blockchain-based platform at different points on the cargo’s journey. This will give all trusted stakeholders real-time visibility of where it is. The plan will reduce costs and manual processes. The platform will be able to identify where damage or loss occurred, which will reduce the time and cost associated with disputes between different companies in the logistics chain.

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, according to Bob Rogers, vice-president at ULD Care, who said cargo takes longer because it is slowed down by manual…

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