Smart contracts

Blockchain allows the air cargo industry to create smart contracts, which include the terms of the agreement written into lines of code. This code executes actions when specified conditions are met, without the need for legal language, terms or agreements.

Smart contracts can reduce the need for manual intervention and minimize the risk of errors. This can include automation for issuing bills of lading, verifying shipment details and releasing payment upon delivery.

When the contract is completed, the transactions are trackable and irreversible.

Transparent tracking

Transparent tracking allows for the creation of a shared ledger that can be used to track cargo as it moves through the supply chain. This can increase visibility, allowing shippers and carriers to track cargo in real time while reducing the risk of fraud and theft.

The technology is built using blocks of data, with each block linked to the previous block to form a chain of information that is not easily modified. Because blockchain is decentralized and not owned or controlled by a single entity, it is considered a more trustworthy, secure, and transparent way to record and store data.

Secure payments

Blockchain can be used to facilitate secure and transparent payments by using distributed ledger technology. Carriers and shippers can manage payments securely and instantly without the need for intermediaries, reducing transaction costs and improving cash flow.

Immutable records

Shippers that use the blockchain can create an immutable record of digital air cargo bookings.

Each transaction is recorded on the blockchain, and once the record is created, it cannot be altered. This creates an audit trail that can be used to verify booking authenticity and provide a tamper-proof shipment history.

Blockchain allows shippers and carriers to have a secure record of all touchpoints along the cargo’s journey.

Improved security

Blockchain technology uses cryptography to provide a highly secure way to store and transmit data in the digital air cargo booking process, helping prevent unauthorized access to cargo data and reduce the risk of cyberattacks.

Simplified customs procedures

By creating a shared ledger, blockchain technology helps track cargo as it moves through the customs process.

It enables secure and transparent data-sharing, allowing customs authorities and relevant parties to access real-time information on the air cargo shipment, including the origin, destination and contents. This can accelerate the customs clearance process and reduce the risk of delays or errors.

By using blockchain technology, shippers and carriers have real-time visibility of the supply chain at every stage of the journey. This can improve efficiencies and reduce the risk of lost or delayed shipments with glimpses into the location, condition and other relevant details throughout every stage of cargo shipping.

IoT is the interconnection of physical devices that can communicate with each other and exchange data over a network. These devices can range from sensors and cameras to GPS trackers and radio frequency identification (RFID) tags. In air cargo monitoring, IoT devices are used to monitor the location, temperature, humidity, shock and other defined conditions of cargo during the entire journey.

Before IoT, air cargo monitoring was a manual and labor-intensive process. Cargo was tracked using paperwork, phone calls and emails, which often resulted in delays, errors and loss of cargo. With IoT, air cargo monitoring has become a real-time and automated process that provides accurate and timely information about the status of airfreight.

IoT advancements 

IoT devices help to grease the wheels and streamline the supply chain, allowing companies to remotely monitor the condition of cargo throughout the journey — from the warehouse and the airplane to the destination. This means that cargo can be monitored in real-time, allowing issues to be addressed immediately, reducing the risk of damage or loss.

In addition, the condition of the airplanes and ground equipment used in air cargo operations can be monitored using IoT. By collecting and analyzing data, the devices can predict when maintenance is required, reducing downtime and increasing efficiency.

Boosting the security of air cargo operations by monitoring freight for tampering or theft is another advancement, with IoT devices able to detect when cargo is opened or moved without authorization and alert relevant parties.

Temperature-sensitive freight that requires cold-chain technologies, such as pharmaceuticals and other perishables, can also benefit from IoT-powered air cargo monitoring. Advanced analytics can be programmed to trigger alerts if containers drop below a specified temperature or if a delay occurs.

Benefits of IoT in air cargo monitoring

IoT devices can automate many aspects of air cargo monitoring, reducing the need for manual labor and increasing efficiency. This can result in faster delivery times and reduced costs.

Real-time updates, accurate location data, and condition reports can improve airfreight visibility and enable stakeholders to make informed decisions about cargo management.

In addition, IoT devices can monitor air cargo for temperature, humidity and other conditions that can affect the safety of freight and the supply chain. This reduces the risk of cargo damage or loss and

ensures that freight is delivered in the best possible condition.

Types of IoT devices 

There are several types of IoT devices used in air cargo monitoring, including:

Sensors: Attached to containers, sensors can detect and measure physical conditions such as temperature, humidity, pressure, vibration and shock. The data collected can be transmitted to a central monitoring system via wireless communication technologies such as Wi-Fi, Bluetooth or cellular networks.

GPS trackers: Trackers can determine the location of cargo using GPS technology to collect data such as the coordinates, direction, speed and altitude of the air cargo. These devices provide real-time

information about the location of airfreight during transport.

RFID tags: Using radio-frequency electromagnetic fields to store and transmit cargo information, RFID tags can be used to track the movement of air cargo and provide real-time information about its location.

Challenges of implementing IoT in air cargo 

While IoT has many benefits for air cargo monitoring, there are also challenges associated with its implementation, including:

Cost: IoT devices can be expensive to purchase and maintain, which may be a barrier to adoption for some organizations.

Integration: Integrating IoT devices into existing air cargo systems can be a complex process that requires significant planning and investment.

Security: IoT devices can also pose security risks, as they can be vulnerable to hacking or other cyber threats.

The growing adoption of advanced analytics and machine learning are among the trends sure to shape digital freight forwarding. By analyzing vast amounts of data on shipments, routes and market trends, these digital air cargo booking technologies can help to optimize supply chain operations, reduce costs and improve the customer experience.

Advanced analytics can provide insights into customer behavior, allowing freight forwarders to tailor services to meet customer needs and preferences.

Machine learning can be used to automate processes and reduce manual workloads. By analyzing data patterns, machine learning algorithms can help freight forwarders make more accurate predictions and automate repetitive tasks, which can free up employees, allowing them to focus on more value-adding tasks, such as customer service and relationship management.

Predictive analytics can provide data on past shipments and market trends using machine learning algorithms to forecast demand and optimize shipment routing and scheduling, improving efficiency and reducing costs.

Online marketplace expansion

Another trend likely to shape the freight forwarding industry is the continued growth of e-commerce and online marketplaces. As more consumers shift to online shopping, there will be increasing demand for fast, reliable, and cost-effective shipping solutions, creating opportunities for innovation and growth.

At the same time, there is likely to be a greater focus on sustainability and environmental responsibility in freight forwarding. This will involve reducing carbon emissions and other environmental impacts and ensuring supply chains are resilient to climate change and other global risks.

Improved CX

The future of customer experience in digital freight forwarding is likely to be characterized by greater personalization, transparency and efficiency. As customers continue to demand more from logistics providers, digital freight forwarders will need to find new ways to differentiate themselves and provide value-added services.

Advanced technologies such as artificial intelligence and automation will impact customer experience (CX). Forwarders can provide streamlined services using these technologies, and offer real-time shipment tracking and proactive notifications.

The growing interest in sustainability and environmental responsibility will also continue to shape CX. Digital freight forwarders will need to explore ways to reduce carbon emissions and offer more eco-friendly shipping options.

Forwarders likely will use data analytics and customer insights to tailor services to the needs and preferences of customers. This may involve offering customized shipping options, providing more proactive communication, and offering value-added services such as warehousing and fulfillment.

Finally, there is likely to be a greater emphasis on transparency, with freight forwarders providing more detailed and accurate information on shipment status, delivery times and costs. This may involve investing in new technologies such as blockchain and the Internet of Things to provide real-time visibility and traceability throughout the supply chain.

Several blockchain platforms are being used or developed for the air cargo industry, including:

Blockaviation

Blockaviation is a blockchain platform in development for airlines, leasing companies, and other aviation stakeholders to securely store and share aircraft records. The company’s goal is to improve efficiency, transparency and security in the aviation industry.

The platform offers a single source for aircraft records that allows airlines and lessors to have greater oversight of their aircraft and their records, as well as integration with other systems, allowing airlines and lessors to access services from a wider range of suppliers.

Blockaviation, founded in 2017, is headquartered in Dublin.

CargoX

CargoX is a blockchain platform that allows for the secure transfer of documents and data. The neutral, public blockchain technology creates a decentralized network to automate the process of creating, signing and transferring electronic bills of lading (e-BOLs), which can reduce costs and improve efficiency.

The platform is based on the Ethereum blockchain and allows users to exchange certificates of origin and insurance certificates securely and efficiently. CargoX also offers document tracking, document verification, and document dispute resolution.

The company was founded in 2017 and is based in Slovenia. CargoX has raised a total of $7 million from investors, according to Crunchbase.

Freightchain

Freightchain is a blockchain-based platform for the air cargo industry with technology that provides a secure and transparent way for airlines, freight forwarders and shippers to book cargo space, track shipments and manage documentation. The platform is built on the Hyperledger Fabric blockchain platform.

The company uses blockchain to create a distributed ledger of all air cargo transactions. The ledger is tamper-proof and immutable, which means that it cannot be changed or deleted without the consensus of the network. This can provide a high level of security and transparency for all parties.

Freightchain was founded in 2020 by AirAsia’s logistics arm, Teleport. The company currently works with 10 airline partners in six regions, according to its website.

VeChain

VeChain is a blockchain platform that uses a combination of blockchain technology, internet of things (IoT) sensors and radio frequency identification (RFID) tags to create a complete picture of the air cargo journey, from production to consumption. VeChain has a number of real-world applications in the air cargo industry, including tracking the movement of food and pharmaceuticals to ensure quality and safety, tracking the provenance of luxury goods to prevent counterfeiting, and tracking the environmental impact of products to promote sustainability.

The company was founded in 2017 and is based in Singapore, according to Crunchbase.

World Food Programme  

The World Food Programme (WFP) has developed an online platform called the Logistics Emergency Teams (LETs) to help coordinate the logistics of delivering food and supplies to disaster-affected areas.  

The platform — comprised of four of the largest global logistics and transportation companies: Agility, UPS, Maersk, and DP World — uses digital cargo booking technology to help manage inventory, track shipments and coordinate the movement of goods. 

UNICEF  

The United Nations Children’s Fund (UNICEF) has developed a digital supply chain platform that allows the organization to track the movement of supplies from the manufacturer to the end user. The humanitarian aid organization’s platform uses digital cargo booking technology to help manage inventory, track shipments and coordinate the delivery of supplies to children in need.

The UNICEF Supply Division operates out of Copenhagen, Denmark, and serves UNICEF’s programs and operations in more than 150 countries. The division works closely with other UN agencies, governments, NGOs and private sector partners to ensure that supplies are delivered to the right place at the right time. 

Red Cross  

The Red Cross has developed a supply chain management system that is designed to be agile and responsive to changing needs, and it is constantly being updated and improved. 

The Red Cross supply chain management system is a critical part of the organization’s ability to respond to disasters and other emergencies. By ensuring that the right supplies are in the right place at the right time, the system helps to save lives and alleviate suffering. 

Doctors Without Borders  

Doctors Without Borders, also known as Medecins Sans Frontieres (MSF), is a humanitarian organization that provides medical assistance to people affected by conflicts, natural disasters, epidemics and other crises around the world. To support its operations, MSF may engage in the transportation of medical supplies, equipment and personnel using various methods of cargo booking and logistics. 

MSF uses a digital cargo booking system to manage the transportation and distribution of its medical supplies and equipment. The system allows MSF to track inventory, manage orders and coordinate the delivery of supplies to its medical teams in the field.

The digital cargo booking system used by MSF allows the organization to manage its supply chain more efficiently, reducing the risk of stockouts and ensuring that essential medical supplies are available when and where they are needed. The system also enables MSF to track the movement of its supplies in real time, which is particularly important in emergency situations where rapid response is critical. 

MSF may work with logistics partners and local authorities to coordinate transportation and ensure that all necessary permits and documentation are in order. The digital cargo booking system also helps to streamline these coordination efforts, enabling the organization to work more effectively with its partners and ensure that its medical supplies and personnel reach the people who need them most. 

This has led to more freight forwarders adopting digital cargo booking technology. The following are a few success stories in the airfreight industry:

Air France KLM Martinair Cargo

Air France KLM Martinair Cargo has developed a digital booking platform called myCargo. The platform provides customers with real-time pricing and scheduling information, as well as access to tracking and management tools.

Since its launch, myCargo has seen rapid adoption, with more than 90% of Air France KLM Martinair Cargo’s bookings now made through the platform. Customers are also able to select one of four different levels of SAF when booking through the air cargo booking platform.

CargoAi

Airfreight digitalization company CargoAi offers a digital platform that provides real-time quotes and booking capabilities for air cargo shipments. The platform integrates with multiple airlines and freight forwarders, allowing customers to compare rates and schedules across multiple carriers.

“We help small to medium airlines jump the digital curve and become more competitive than most of the big airlines, who had to invest years and millions to make” their own digital booking platforms, Matthieu Petot, CEO of CargoAi, previously told Air Cargo Next.

Singapore-based CargoAi has seen rapid adoption since its launch in 2019, with more than 1,000 freight forwarders and shippers using the platform to manage digital air cargo bookings.

Cargo.one

Cargo.one is a digital air cargo booking platform founded in 2017 that connects shippers with a network of airlines and freight forwarders. The platform aims to simplify the booking process for air cargo shippers by providing a user-friendly interface and real-time access to flight schedules, prices and capacity. Cargo.one connects shippers with a network of airlines and freight forwarders, enabling them to book air cargo shipments quickly and efficiently.

Cargo.one has grown rapidly since its founding and has established partnerships with more than 40 airlines and 3,000 freight forwarders, according to its website. The platform currently offers coverage to more than 400 destinations worldwide and is continuing to expand its network and services.

In addition, the booking company recently launched a digital add-on to its platform, called cargo.one pro, which gives forwarders and import and export agents 24/7 access to live quotes and booking options. 

Forwarders can browse various shipping agents in real-time, and users of the platform are vetted and verified, Moritz Claussen, cargo.one founder and co-CEO, previously told Air Cargo Next.  

“Cargo.one pro will be … helping all freight forwarders globally to do these import shipments, seamlessly booking imports with dozens of freight forwarders, but then also allowing freight forwarders to offer their services to a massive user base of a couple of thousand [customers] that use cargo.one on a daily basis,” Claussen said.  

Flexport

Digital freight forwarder Flexport has become a major player in digital air cargo booking since its 2013 launch. The company has digitalized the shipping process — from booking to tracking — and has a reputation for transparency and efficiency.

San Francisco-based Flexport offers automated booking to improve time-consuming and error-prone manual processes; real-time tracking, so customers can monitor; customization that allows customers to services such as customs clearance and insurance; and digital documentation to allow customers to easily manage and access shipping documents, such as bills of lading, commercial invoices and packing lists.

Freightos

WebCargo by Freightos is a digital platform that allows shippers to instantly compare and book freight rates from multiple carriers. It has streamlined the cargo booking process.

The platform features customizable solutions for air, ocean and ground as well as a centralized platform for collaboration between shippers and carriers.

Freightos CEO Zvi Schreiber said during the company’s Q4 2022 earnings call on March 13 that the company is focusing on digitalizing the international freight market.

“Global trade is about 23% of the world economy and [an] estimated 90% of products purchased in the West are imported. So, it’s a huge part of our economy and of our lifestyles,” Schreiber said.

“The third-party logistics industry, which includes air and ocean shipping of goods, is worth over $1 trillion. But this vast and critical industry is surprisingly offline, creating tens of billions of dollars of waste and the offline highly intermediate nature of global freight is a factor in all the supply chain problems [we] experienced in recent years,” he said. 

Maersk

One of the world’s largest shipping companies, Maersk has invested heavily in digital technology to improve its operations — including its digital platform, Maersk Spot.

Maersk uses data analytics to give customers insights and personalized recommendations to optimize the supply chain, helping digital cargo booking customers make more informed decisions about shipping strategies while reducing costs.

Improved pricing  

Artificial intelligence (AI) collects and analyzes data on factors such as demand, supply and cost to provide shippers with real-time pricing, allowing them to make more informed decisions about when and where to ship their cargo and to get the best price. 

Maersk, a global logistics company, is using AI technology for digital air cargo booking. Maersk has developed an AI-powered digital platform, Maersk Spot, that enables shippers to book air cargo space online in real-time. 

The platform uses algorithms and machine learning to provide shippers with instant quotes and a simplified booking process. Maersk Spot can also help shippers identify the most efficient and cost-effective routes for cargo.

Meanwhile, global logistics company UPS is using artificial intelligence to develop a tool that will help shippers get the best price on shipping. The tool will consider factors such as weight and size of the shipment, destination and time of year. 

In addition, e-commerce giant Amazon is using artificial intelligence to develop a pricing model for air cargo shipping.  

The company’s dynamic cost optimization (DCO) system uses AI and machine learning to analyze historical shipping data, forecast demand and optimize pricing for cargo shipping. The system can quickly adjust prices in response to changes in supply and demand, ensuring that Amazon remains competitive in the market. 

In addition to DCO, Amazon also uses AI-powered predictive analytics to forecast demand for cargo shipping services, enabling the company to better manage inventory and reduce shipping costs. These analytics use a variety of data sources, such as weather patterns, customer order histories and market trends, to make accurate predictions about future demand. 

Predictive analytics 

Predictive analytics involves the use of machine learning algorithms and other AI technologies to analyze large volumes of historical and real-time data on air cargo shipments and market trends. The goal is to identify patterns, correlations and additional insights that can help shippers and carriers optimize routing and scheduling, improve efficiencies and reduce costs. 

For example, predictive analytics can help carriers to adjust pricing and capacity to meet expected demand, reducing the risk of underutilized capacity or overbooking. 

Predictive analytics can also be used to optimize shipment routing and scheduling based on factors such as the size, weight and destination of shipments, as well as other logistical considerations such as customs requirements and delivery deadlines. 

Another application of predictive analytics is in risk management. By analyzing historical and real-time data on factors such as weather patterns, political instability and other risks, carriers can identify potential issues and take proactive measures to minimize disruptions and ensure the timely and secure delivery of shipments. 

Real-time tracking 

Artificial intelligence-powered tracking systems can provide real-time updates on the location and status of air cargo, helping shippers and carriers to better manage their inventories and reduce the risk of lost or damaged shipments. 

Carriers are using real-time tracking to improve the efficiency of their operations. By tracking the location of cargo in real-time, carriers can identify potential delays and problems early on, and take steps to mitigate them. This can lead to faster and more reliable shipping times, which can save carriers money. 

Improved customer service is a draw of real-time updates for shippers, allowing them to reduce customer anxiety and improve customer satisfaction, leading to repeat business and increased profits.  

In addition, third-party logistics providers (3PLs) are using real-time tracking to improve their value proposition by demonstrating their commitment to efficiency and transparency, which can help win new business and retain existing customers. 

AI-powered customer service  

Artificial intelligence-powered chatbots and virtual assistants can provide 24/7 customer service support for digital air cargo booking, answering frequently asked questions while providing assistance with bookings, tracking and payments. This frees up human agents to focus more on complex tasks, further improving efficiencies.  

Self-service portals — or websites or applications that allow customers to find answers to questions and resolve issues on their own — that use AI can include a knowledge base, FAQs and troubleshooting guides. 

In the late 1990s, the air cargo industry began to experiment with electronic booking systems to improve efficiency and reduce costs. These early systems were often proprietary, meaning that they were developed and operated by individual airlines or cargo companies. 

In the early 2000s, several global air cargo alliances, such as SkyTeam Cargo and Star Alliance Cargo, began to develop digital booking platforms that could be used by multiple carriers. These platforms allowed shippers to compare rates and book air cargo shipments online, streamlining the booking process and reducing paperwork. 

The global pandemic in 2020 accelerated digital air cargo booking technologies.  

Following is an overview of milestones in the evolution of digital cargo booking: 

Online freight marketplaces 

In the early 2000s, several online freight marketplaces emerged that allowed shippers and carriers to connect and book cargo online. Companies such as Kansas City, Mo.-based FreightQuote, an online freight shipping company that provides quotes from multiple carriers for LTL, truckload and parcel shipping, and Austin, Texas-based uShip, an open transport marketplace that connects people who have items to ship with customer-reviewed carriers, were early pioneers in the digital cargo booking space. 

Introduction of digital booking platforms 

In the mid-2000s, several shipping companies began to develop digital booking platforms that allowed shippers to book cargo space online. These platforms were typically proprietary to the shipping companies and were not open to third-party logistics providers. 

The International Air Transport Association (IATA) in 2005 launched a digital booking platform called e-freight, which aimed to create a paperless air cargo industry. E-freight allowed shippers, forwarders and airlines to exchange shipment data and documentation electronically, reducing the need for paper documents and speeding up the shipment process.   

Growth of digital freight forwarders 

In the 2010s, a new breed of digital freight forwarders emerged that began leveraging technology to provide shippers with a more efficient and transparent way of doing business. Companies such as Flexport and Freightos disrupted the traditional freight forwarding industry by offering instant quotes, real-time tracking and customized shipping solutions.

The growth of digital air cargo booking accelerated as more companies began to embrace digital technologies to improve supply chain operations. One key driver of this growth was the increasing demand for faster, more efficient shipping services, particularly in the e-commerce and retail sectors. 

In response many air cargo carriers and logistics companies invested heavily in digital booking platforms and other technologies to improve operational efficiency and customer service. These platforms allowed shippers to book and track shipments online, providing greater visibility and control over the supply chain. 

In addition to customer-facing platforms, the companies invested in backend technologies, such as automated warehouse management systems and predictive analytics tools. 

Another key trend in digital air cargo booking in the 2010s was the increasing use of cloud-based platforms and software-as-a-service (SaaS) solutions. These technologies allowed companies to rapidly deploy logistics solutions and scale operations more quickly, without the need for large IT investments. 

Adoption of blockchain technology 

In recent years, there has been growing interest in using blockchain technology to improve the efficiency and security of digital air cargo booking. Blockchain technology offers the potential to create a decentralized and secure ledger that can be used to track cargo and payments across the supply chain. 

One benefit is its ability to be shared among multiple parties, which could help to streamline the booking process, reduce paperwork, and improve security and trust among shippers, carriers and other stakeholders. 

Catalyst for change 

The pandemic had a significant impact on the adoption of digital air cargo booking. 

One of the most significant impacts of the pandemic was disruption of global supply chains, as lockdowns and travel restrictions led to reduced air cargo capacity and increased demand for shipping services. This led to a surge in demand for digital air cargo booking platforms, as shippers and carriers sought ways to manage shipments and respond to changing market conditions. 

Many air cargo carriers and logistics companies ramped up their investments in digital technologies, including digital booking platforms, automated warehouse management systems, and real-time tracking and visibility tools. 

The pandemic also highlighted the need for greater flexibility in supply chains, which has led to increased interest in technologies such as blockchain and AI that can enable more agile decision-making.