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Microsoft to launch the world’s first blockchain air cargo billing system

Singapore — Cargo Community Network (CCN) partnered with Microsoft to introduce the world’s first blockchain-based air cargo billing, costing and reconciliation system. Launched at the 13th International Air Transport Association World Cargo Symposium in Singapore, the system is set to transform air cargo billing processes, minimize billing discrepancies, accelerate billing reconciliation, and provide near real-time revenue recognition to enhance efficiency for airlines, cargo agents and freight forwarders involved in the entire supply chain.

CCN’s blockchain-based air cargo billing, costing and reconciliation system was launched following a hackathon organized by Microsoft and CCN, and a two-month proof-of-concept (POC) involving airline partners and freight forwarders such as Singapore Airlines (SIA), SATS Ltd., Alliance21 and Bollore.

Leveraging Microsoft Azure Blockchain technology, which offers an additional shared data layer among all parties involved in the supply chain, CCN is now able to deliver a single immutable source of information for air cargo shipment rates (computed and updated directly to blockchain), shipment details and billing processes via blockchain, with real-time updates provided by stakeholders. Already unprecedented, the flexible design of the system allows CCN to add more capabilities, as well as onboard more partners.

“The typical air cargo billing, costing and reconciliation process can involve many stakeholders along the entire supply chain. These processes are also very manual, manpower-intensive and prone to error. By using blockchain on Microsoft Azure, not only does this shorten the billing cycle from up to three weeks to a matter of hours, it can also reduce discrepancies, while enabling greater accountability and visibility across the entire supply chain,” said Teow Boon Ling, CEO at Cargo Community Network.

Lengthy, tedious billing processes prompted the need for digital transformation

Before introducing the blockchain-based air cargo billing, costing and reconciliation system, CCN’s air partners faced a number of challenges, including:

  • Long wait for post-shipment billing, up to three weeks after the air cargo flight has departed;
  • Laborious process to check the complicated freight rating rules to be applied for every shipment; and
  • Tedious reconciliation by airlines and freight forwarders as it involves shipments that happened weeks ago.

In addition, CCN’s partners had to engage with multiple parties to complete the air cargo billing process (Figure 1). The entire process – from requesting for rates to billing and reconciliation – can take up to a few weeks.

Improved billing processes with greater accountability, visibility with blockchain on Azure

By using blockchain on Azure, stakeholders in the supply chain can now retrieve information from a single source in real-time, including shipment details from the flight manifest (FFM), freight status update (FSU) and airway bill (FWB) to facilitate downstream billing and costing processes. Airlines and freight forwarders can also update their shipments and compute charges in real-time through the built-in smart contract feature for upfront reconciliation.

This provides timely financial information to stakeholders while enabling greater agility in revenue recognition, decision-making, risk management and customer service.

“In the competitive air cargo industry where speed and efficiency are key differentiators, technology can play an important role to enable greater operational efficiency across the entire supply chain. By using a robust, blockchain on Azure hybrid cloud set-up with high availability, Cargo Community Network is well-positioned to help airlines and freight forwarders to be quicker and more efficient with their billing processes, which can translate into tangible value-add for the industry across the board,” said Kevin Wo, Managing Director at Microsoft Singapore.

“Delivering convenience and simplicity to our partners has always been at the core of what we do. With our blockchain-based air cargo billing, costing and reconciliation system rolling out to our broader user community starting today, we believe that this will bring added value to all our airline and freight forwarding partners, and strengthen our position as the leading provider of innovative solutions for the air cargo industry,” added Teow.


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