Advances in Air Cargo Financing Using a Consortium Blockchain

Abstract

Blockchain is the foundational technology of various cryptocurrencies. It has features such as nontempering, decentralization, security, anonymity, etc. Its distributed ledger technology has received broad research and industry attention. Cryptography, hash functions, peer-to-peer (P2P) consensus and smart contracts are being used in a wide variety of applications across industries to solve various problems. Supply chain finance is a model in which various financial institutions connect with stakeholders in the supply chain to optimize working capital and liquidity invested in supply chain processes and transactions. The Air Cargo industry is one of the essential parts of various global supply chains. Consisting of multiple nodes, the complexity in its structure makes it difficult for credit risk analysis for the creditors. Information asymmetry leads to a lack of trust between companies and creditors. Frauds and disruptions in the Air Cargo industry make it vulnerable from the perspective of Financial Institutions. A platform for Air Cargo Financing using Blockchain (ACFB) is proposed in this study to solve these problems; this would make a supply chain more transparent, trustworthy, and efficient for all the stakeholders and financial institutions.