AirAsia’s Tryst with Blockchain: Freightchain

Siddhartha Dasgupta

November 17, 2020

As they say, necessity is the mother of all invention & innovation. This couldn’t be truer in the context of AirAsia, which has seen tremendously turbulent times owing to the Pandemic. We know for a fact that the Pandemic has had an indelible impact on the aviation industry with passenger numbers dropping drastically, but the focus has been freight and cargo, especially during a Pandemic where medicines & PPE kits need to be flown internationally.

We have had airlines convert their regular passenger aircraft into cargo carriers. It served as essential transport in the middle of a pandemic and enabled airlines to keep operating rather than halting operations completely.

Reimagining Freight

In the month of April, as the company saw most of its fleet grounded and the opportunity of cargo picking up its operations, AirAsia’s logistics entity Teleport introduced FreightChain, the world’s first digital air cargo network. It simplified hassles for freight forwarders as they now have the flexibility to leverage aircrafts of multiple airlines to transporting freight in a process that simplified the booking and itinerary confirmation.

It’s a blockchain system which aims to automate cargo bookings through interline collaboration. Essentially, for the cargo industry it serves two purposes:
● Improve air cargo utilization of commercial airlines.
● The flexibility of shipping routes to freight forwarders & shippers, irrespective of their budget.
● Save costs – remove agency fees.

Freightchain also aims to solve a complex contract problem in the air cargo industry. Interlining contracts are generally complex and slow and are unable to keep up to the dynamic market. Blockchain was used to solve this problem and make interlining contracts more agile through smart contracts.

In April when the platform was launched, Freightchain CTO, Vishal Batra said, “We 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.

Blockchain helps Freightchain operate with built-in traceability and accountability capabilities. While the platform has been built for all commercial airline, currently it better utilizes the AirAsia’s network of 150+ planes to carry parcels to major cities globally.

The Digital Experience

Ever since COVID hit, AirAsia has doubled down on its digital experience for all customer segments. From food deliveries to e-commerce, AirAsia has been effective in harnessing digital to drive value for their customers. Freightchain embodies the new direction and focus of the group and really brings the digital experience in a B2B scenario.

The objective is to make the air cargo experience open and available to all who want to book air cargo, rather than letting it be limited to key forwarders and agents. It provides open access to shippers and freight forwarders to tailor their service as per a customer’s budget and requirement. Freightchain automates the booking and payment process and essentially creates a self-service platform that improves operational efficiency and cuts cost for airlines and customers.

While we have seen Blockchain used to streamline supply chains over land and sea, Freightchain takes the story of successful Blockchain implementation to the sky for the first time. While the general perception suggests that the demand for air cargo has remained steady, due to the Pandemic, but it’s not true. As per IATA, the demand showed a sharp decline in April 2020 as compared to the previous year.

Freightchain most certainly provides for a good case study on the potential of Blockchain in the logistics industry. It will take time to be adopted as Blockchain solutions to be built and scaled from the ground up takes time and its more difficult. Companies willing to take the Blockchain plunge need to evaluate their unique business requirement and choose a solution approach that’s compatible with their requirement and adds value.

As a thumb rule, given the nascent nature of the technology, its always better to build on an existing blockchain system. This brings in seamless integration to databases, deployment methods and programming languages, thereby reducing the risk in development. A classic example is Freightchain itself, which was built on Hyperledger Sawtooth.

Sources: Freightchain, AirAsia, Techwire Asia

About the author
Siddhartha Dasgupta

Contributing Author

Sid has been a content solutions evangelist and a digital marketer for 10+ years. Having written for brands such as IBM, Infosys and other technology corporations and startups, he is always at the cutting edge of researching & writing about emerging technologies.

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