According to an announcement on March 12, the air transportation and data tech company Sita and the trade association ULD Care are researching the use blockchain technology, which could help the air cargo industry save as much as $400M USD per year.
Blockchain has been shown to bring down costs and improve efficiency in some areas. Logistics are one of the places that blockchain can make systems far more effiecnt.
With blockchain technology, air cargo companies can track and record the change of custody for airline cargo containers, or Unit Load Devices (ULDs) in their movement between destinations. This new iniative aims to assist companies in bringing down industry costs, improving efficiency, preventing fewer losses, and stopping damage to cargo.
Sita and ULD Care Could Make Big Things Happen
The blockchain that is being used will help with authentication and functions based on trust, which will help to reduce the risk of tampering, cybercrime, trade-base concealing, fraud, and illicit trade.
Bob Rogers, the vice president, and treasurer of ULD Care said:
“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 revolutionize that process.”
Blockchain technology is being used to address some common challenges. Per the announcement, there are currently up to 12 custodian companies monitoring and tracking the cargo for shipments. Most of those are working with paper documents at the moment, which causes the loads of problems, and costs far more than a blockchain system would.
New Ways to Monitor Movements
Blockchain could save time and money for shippers, but also fix many of the air cargo industry’s shortcomings.
Matthys Serfontein, the president of Air Travel Solutions for Sita, said:
“We are looking at blockchain very closely and we’re excited to test the potential of the technology to transform the air cargo industry.”
Other companies are exploring blockchain technology to use for logistics. IBM Indonesia recently has joined TradeLens’s blockchain-based shipping platform, according to media sources. The world of cryptos remains volatile, but the blockchain technology it has inspired is growing all the time.
For the moment these blockchain-based logistics systems aren’t using any sort of token, but that may change as time goes on. By using blockchain to keep records, and tokens to make payments, most of the costs associated with trade can be removed, and payments could be made with near-zero fees.
