Cargolux Reshapes its Product Portfolio and Flies Trans-Pac

´This was the key message delivered by CEO Dirk Reich at Cargolux’s press event this noon: “We are both innovating and differentiating our service portfolio,” emphasized the carrier’s helmsman at the Munich-held Transport Logistic fair.

Eight new products
Having said this he unveiled the names of the new offerings that consist of as many as eight specialized and dedicated products.

These are:

• “CV Classics” -  covering standard shipments;
• “CV Jumbo” -  aimed at oversized and heavy items;
• “CV Power” - dedicated to transporting cars, engines and items such as helicopters;
• “CV Hazmat” -  includes the wide range of dangerous goods;
• “CV Pharma” - covers temperature critical pharmaceutical products;
• “CV Fresh” - handling of all kinds of perishables;
• “CV Alive” -  is dedicated to transporting live animals;
• “CV Precious” -  is the collective term for valuable cargo and artworks.

Niek van der Weide, EVP Sales & Marketing at Cargolux commented as follows: “I believe that focusing on this new portfolio of products will significantly boost our support of the businesses of our customers and their clients and strengthen the good relations we enjoy with our partners in the industry.”

Enhancing product consistency
Up to now, the carrier’s products were rather poorly structured and appeared somewhat confusing to many clients. This shortcoming will be overcome, the managers hope, by the new portfolio they verbally presented at MUC. A goal that was emphasized by Kevin Nash, the carrier’s SVP Global Logistics: “With today’s launch, we aim to deliver an enhanced global consistency in our worldwide network and, in doing so, increase the share of specialized products in our portfolio, further focusing on industry specific needs by thinking beyond the flight and responding to the requirements of customers with door-to-door service needs.” 

More products are coming up
Asked by CargoForwarder Global about the current product mix Nash said that around 70 percent of all goods flown by Cargolux are standard shipments with the other 30 percent consisting of specialized items. „This special segment we hope to increase through our differentiated offering by 10 percent in the next 12 to 18 months“ he noted. In addition the former Kuehne + Nagel manager announced that by next year two more products will be introduced:
The basic idea is to provide a robust end-to-end service by closely linking CV‘s activities with those of the forwarding industry. „We have to think beyond the flights by providing this robust end-to-end service in accord with our customers. I see our future role more in confirming capacity to the agents and not so much in primarily selling cargo,“ Kevin looks beyond the horizon.
The new product offerings apply with immediate effect and can be booked by clients right away

Bridging the North Pacific
Air Cargo Europe’s stage was also used by the Cargolux executives to announce twice-weekly Trans-Pacific services between Zhengzhou and Chicago, operated by a Boeing 747-8F. “This new service is a milestone in the development of our Chinese operations and the cooperation with our partner HNCA,” stated CEO Dirk Reich at the press meeting. The manager went on to say: “We are proud that our partnership is moving ahead so swiftly and successfully. Linking Zhengzhou to the Chicago market and beyond offers unique opportunities for shippers and manufacturers on both sides of the Pacific and we can happily say that the Cargolux service has been warmly welcomed by our customers in China and the US.” He added to this that he expects the flights to be doubled until the end of this year due to increasing demand. Currently exports from China to the U.S. are twice as high as freight flows in the opposite direction. However, once the new service is well accepted by the market Reich expects this ratio of 2 to 1 will level out step by step.
Asked about the traffic rights he said that Cargolux got the official go for Trans-Pac flights by the authorities at the beginning of this year. The airline also operates seven weekly frequencies between Luxembourg and Zhengzhou.


CV management still being hounded by media and unions
The new product portfolio publicized today shows a complete turnaround in CV’s sales and marketing strategies.
A positive move, which is aimed at getting nearer to the customer and recognizing his needs.
It’s a great pity however that the carrier is still being hounded internally by what it seems are a small group of pilots as well by the union LCGB with regards to the now firmly fixed Cargolux Italia.
There was a report last week in the Luxembourg local press that CV had been violating flight safety rules with its daughter, Cargolux Italia.
This gives the impression that the CV Italian operation is not being run properly.
What the report did not mention was that this was an issue brought up in 2011 and which has long since been solved.

The carrier’s management has come under considerable fire from some unionists and pilots regarding CV Italia.
However, this is a firm part of the Cargolux operation and it would do all parties concerned a lot of good if this bickering were to stop and all could get on with keeping the company as one of the world’s great all-cargo airlines.

2014 results show optimism
The carrier made a small profit of USD 3 million last year.
This was shown in the figures published also last week.
Not an enormous amount, but hopefully an encouraging sign for 2015 and onwards.
The last quarter of 2014 and declining oil prices helped the airline to keep its head above water.
The 2014 revenue was just over 10 percent higher than 2013.
The relatively low profit was influenced by the airline having to impair its Boeing 747-400F fleet to the amount of USD 40 million, as well as having to set aside funds for potential anti-trust fines.
Hence, the higher revenue and lower profit.

CV joins others in lithium battery ban
Cargolux has joined other carriers in imposing a ban on the carriage of lithium ion batteries on all of its flights.
The ban, which is so far said to be temporary, came into effect on May 1.
The recent information sent to carriers by the U.S. Federal Aviation Administration (FAA), led CV to decide on imposing the ban.
It does not apply to lithium ion batteries which are already packed with or contained in equipment.
It seems that there is finally a direct movement in the industry to properly evaluate the actual danger of carrying large amounts of this type of cargo.
Hopefully there will be a common ruling very soon.

Heiner Siegmund  /  John Mc Donagh