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Malaysian airline launches blockchain-based air cargo network

Malaysian low-cost airline recently launched a blockchain-based air cargo network to make it easy and convenient to book for cargo space on its aircraft as well as other airlines.

Called Freightchain, the new blockchain solution enables freight forwarders and shippers to instantly book and confirm cargo on any of airlines’ 247 aircraft “without the need to go through traditional time-consuming sales or email channels.”

Freightchain utilizes a bidding process that allows the shippers to opt for the cheapest plan or the fastest route to transport their cargo. The solution validates the bids using blockchain algorithms.

The first pilot booking on Freightchain involved the shipment of pharmaceutical cargo from Bengaluru in India to Ulan Bator in Mongolia. An instant itinerary via Kuala Lumpur, Malaysia, and Seoul, South Korea, was confirmed in real-time with flights from three different carriers through a smart contract on blockchain.

The CTO of Freightchain stated that launching Freightchain under the current coronavirus pandemic was strategic, noting that the crisis has brought global supply chains to their feet with many critical players being forced to shut down operations.

The team deliberately launched Freightchain during this period of uncertainty within global supply chains, caused by the coronavirus pandemic.

Agile software platforms like Freightchain help to connect uneven supply and demand amidst a rapidly evolving environment. Trust and transparency are needed now more than ever.

Headquartered near Kuala Lumpur, AirAsia is the largest airline in Malaysia by fleet size and destinations. It operates scheduled domestic and international flights to more than 165 destinations spanning 25 countries. Its main hub is klia2, the low-cost carrier terminal at Kuala Lumpur International Airport (KLIA) in Sepang, Selangor, Malaysia.

According to another article, while Freightchain reduces booking time and other manual processes for shippers and freight forwarders, it helps airlines to manage its cargo space better.

On the other hand, the interline booking of flights increases the efficiency of underutilized aircraft. As an example, last year Teleport (formerly RedCargo Logistics) signed an interline agreement with Oman Air.

Freightchain’s platform is built using Hyperledger Sawtooth and uses a graphical interface like that for a passenger ticket booking.

In 2018, AirAsia floated the idea of an initial coin offering (ICO), making the low-cost airline one of the most established companies in Southeast Asia enter the crypto market.

The firm’s CEO stated that the low-cost airline’s Big Points loyalty program could be easily transferred to the blockchain.

Blockchain use in the shipping industry

One article noted that the availability of a shared ledger like the one offered by blockchain technology is — according to many — a much-needed innovation to help manage the complexity of modern logistics.

The World Economic Forum pointed out in a recent report that blockchain technology can help with the global supply chain chaos.

Until now, many global firms have held back from digitizing the paper-based processes that are ubiquitous in trade, due to concerns that the costs of digitization do not justify the benefits.

Logistics networks thus remain heavily reliant on physical signatures and paper printouts, which require personnel to be present in-person at various sites to keep operations running. One example is the “Bill of Lading,” a detailed list of a ship’s cargo, where a paper copy is still required by law.

These paper-based operations both reduce visibility and multiply risks at times of disruption, reducing firms’ ability to react quickly to changing circumstances.

Already, governments and firms with strong digital infrastructure — such as e-signatures and e-transactions support — are weathering the current storm significantly better than those without, the authors claim.

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