The package labeled “development perspectives” Mrs von Boxberg presented to the 90 attendees of the German Air Cargo Club’s (ACD) year-end meeting held in Frankfurt last Tuesday was
colored in enchanting green. In many cultures, green is the symbol color for optimism, growth, and vitality. And her presentation was full of confidence concerning the future of Lufthansa Cargo’s
business but also the industrial development as such in times ahead.
Her optimistic outlook was appreciated by freight forwarders and GSAs in view of the global political and economic challenges.
They also were the first to learn that the carrier is launching a new app for digitalizing Dangerous Goods documentation.
In her presentation, she referred to the latest Seabury study, forecasting annual growth rates in cargo averaging 3.7 percent within the next two years at world level. Luring risks like aggravating tariff conflicts between the U.S. and China or the EU or economic hiccups caused by Brexit will only marginally and for a limited period of time influence the long-term upswing of the air freight industry, she predicted.
Toothbrushes say it all
As proof of her assertion she showed a surprising slide displaying toothbrushes. People earning less than two dollars a day use their forefingers for brushing their teeth because for them possessing a toothbrush is pure luxury. In contrast, a person earning up to eight dollars per day is able to buy one brush, however, used jointly by him and his family members. But in case somebody has a daily income of up to 32 dollars he or she can afford buying as many toothbrushes as needed in the specific household.
The essence of her message: spendings on leisure, culture and health increase with growing income, driving air freight demand. For instance, in China meanwhile estimated 750 million people belong to the middle class, being active consumers, demanding domestic but also increasingly international products.
For Lufthansa Cargo this has led to more or less balanced loads from China to Europe and on eastbound routes as well.
More people, more wealth, more air freight
Another long-term growth driver is the constant rise in population, upping the demand for consumables, pharmaceuticals or fancy articles. This might modify trade flows with intra-Southeast Asian freight transports outpacing volumes flown on trans Pacific or transatlantic routes, but it drives demand for air transports in general. Mrs von Boxberg’s basic formula: The increase in population spreads the global consuming class, ups the demand for air freight.
Also were the first to learn that Evidenced by eCommerce that’s going through the roof since years.
eCommerce market grows very fast, Lufthansa Cargo further expands its digital offering
With regard to eCommerce, LH Cargo’s Chief Commercial Officer forecasts growth rates of annually 25 to 30 percent on transnational trade lanes in the years ahead. She added to this, however, that standard freight still accounts for more than 50 percent of all goods flown by her airline.
Asked by CargoForwarder Global if LH Cargo intends offering customers a specific eCommerce product, she said that the approach regarding the eCommerce market is not finally decided yet.
Instead, Mrs von Boxberg announced the launch of a new cloud application ‘DGD.online’ that is usable since today (17 Dec). After handling the world’s first dangerous goods shipment with an electronic Dangerous Goods Declaration (eDGD) at Frankfurt Airport in September, Lufthansa Cargo has gone one step further. DGD.online helps shippers digitize their dangerous goods processes and enables paperless collaboration with logistics service providers.
Lufthansa Cargo is the world's first cargo airline to provide an application for the digital creation of transport documents in the dangerous goods sector. The new service DGD.online supports shippers’ sustainably and is equally applicable in the areas of air freight, road and sea transport. For the developers, a high degree of user-friendliness as well as value-adding validation and comfort functions, which were developed together with pilot customers, were in the focus, the executive told CargoForwarder Global.
Digitalization efforts pay off
According to Frau von Boxberg, who succeeded Alexis von Hoensbroech last August as Executive Board Member Product and Sales, shipments booked and documented electronically (eAWB) account for 70 percent of all consignments flown on behalf of Lufthansa Cargo. This is a remarkable increase to figures presented in Q1 of 2018, when LH Cargo announced to start charging €12 per paper documented shipment as of 1 October this year.
Despite this advance in digitalization, Mrs von Boxberg pointed out that e-booking and eAWB schemes have to go along with direct customer contacts and the fostering of personal relations. “Customers expect a multi-channel approach, consisting of electronic data transmission, pro-active information supply, coupled with outstanding personal services and a high degree of reliability.”
Satisfying financial figures expected
In the months ahead linking additional IT platforms to LH Cargo’s scheme could become a gamechanger, she predicted. Recent examples are the carrier’s decision to acquire 15 percent of cargo.one, a platform enabling users to book capacity for general cargo shipments across multiple airlines at spot rates, similar to their cooperation with U.S. platform Freightos WebCargo and their online eBooking system. Thanks to these additional tools, the market is offered convenient interfaces to Lufthansa Cargo’s products, capacity and services.
Touching her carrier’s financial situation Dorothea von Boxberg said that she expects 2018 earnings to be in the region presented last year, then totaling 242 million euros. “We hope to reach a similar level this year,” she concluded.
In 2019, three additional Boeing 777 freighters will be added to the fleet, totaling eight then. If the aircraft will replace some of the aging MD-11Fs or spur the growth of capacity has not been decided by the management yet.