Air Cargo Industry Seeks Efficient Solutions for Complex Financial Flows

The air cargo industry is facing a significant challenge in managing its increasingly complex financial flows. Jean Verheyen, CEO of Nallian, defines financial flows as 'any payment triggered by any service or operational event agreed and performed.'

This includes paying service providers, border agencies, and the cost of risk management and financial security. The sheer number of transactions is a major issue, with many still being processed manually.

'The challenge here, I think, is not so much the total cost, it's more the number of transactions that are to be covered,' Verheyen says. 'If the settlement of these transactions is not efficient it creates quite some overheads and unnecessary costs.'

Visa is working on a solution to embed payment into the actual flows, with Ofir Bronhaim, lead for freight, logistics and maritime at Visa Commercial Solutions, Europe, stating that this would be the main opportunity. They are also considering adding credit and working-capital solutions directly into air-cargo and B2B trade workflows.

TIACA's director general, Glynn Hughes, suggests that centralised clearing houses with trusted partners across the supply chain could eliminate hold-ups reliant on financial flow movements and reduce overall costs. He explains that this would involve a netting process where each entity gets a nett position of either owing one amount to the central system or receiving one amount.

Hughes highlights the challenges of implementing such solutions, including scale and network size. However, he believes that the potential advantages include cost reductions, reduced dilution of capital, and simplified processes.