Max Conrady (MC) heads the cargo division of Frankfurt operator Fraport AG since 1 November 2018. Ever since, the volumes are going south. What is going wrong and what needs to be changed to better the situation? About these and other issues we spoke exclusively with the freight executive last week at the Munich-held Air Cargo Europe trade show.
CFG: Mr Conrady, the tonnage handled at other major European airports is growing constantly, for instance at Liege, Leipzig-Halle or Cologne-Bonn, while Frankfurt’s throughput shrinks month after month. Sobering facts. What’s going wrong?
MC: You can imagine that our latest monthly figures are not really pleasing us since we know that we could do better. But plainly speaking, those airports you just mentioned are competitors that concentrate on e-commerce and express shipments with standard freight playing only the second or third fiddle.
The picture is different when looking at Frankfurt, Amsterdam, Paris CDG or London Heathrow. At these big gateways so-called classic air freight has a dominant role, including pharmaceuticals, dangerous goods, perishables and other special products in addition to the dominant segment of standard freight. Therefore, it’s worth taking a closer look when speaking about turnover figures because ours are not really bad when compared with the airports just mentioned.
In Frankfurt tonnage went down by 1.3 percent in Q1…
MC… but Amsterdam lost 6.9 percent, Heathrow 2.1 percent, Munich even 8 percent. Only CDG reported a drop of 1.3 percent, similar to our Frankfurt figures.
Is it pleasing to have lost only a bit less than your main European competitors?
MC: Certainly not. But you mustn’t forget that we are facing challenging economic times coupled with a lot of political uncertainty. Germany is particularly affected by a weakened automotive industry and a general decline of the consumer index. These two trends, which are out of our reach, explain our contracting figures.
In other words: Fraport Cargo has done everything right. To blame are others, correct?
MC: That would be too simple. Our records would be better if we decided to buy traffic. An option we reject vigorously, in contrast to some others. Just take Liege as an example for state subsidized infrastructure projects or Ostend, as written in your own publication some weeks ago.
In contrast, our transport policy aims at a long-term and lasting partnership with cargo airlines on a commercial basis. This means that the costs for freight buildings, noise abatement measures or infrastructural enhancements etc. are completely allocated to the users.
Without the existing night flight ban Frankfurt would be much more attractive for cargo carriers. Particularly integrators such as UPS, FedEx or DHL Express are circumventing Rhine-Main, excluding you from capturing market shares in e-commerce.
MC: Basically, you are right. However, we have two daily FedEx flights to Paris CDG and also two DHL flights to their global hub Leipzig-Halle. But that’s only a drop in the bucket compared to other airports whose business model is based on e-commerce.
So what are your plans to get back to old strength and make Frankfurt more attractive as cargo hub?
MC: There are several answers to this: We need to better connect the players in the logistics chain and support their cooperation. Similarly, we want to optimize the digitization of air freight processes in order to increase the efficiency of cargo flows.
How exactly do you plan to achieve this?
MC: An important step was the development of the FAIR & Link platform, which more than 500 companies make already use of, enabling the pre-advice of shipments and the allocation of slots for truckers at warehouses.
We started a pilot for digitalizing Dangerous Goods Declarations in cooperation with FAIR & Link developer Dakosy.
But we want to go even further by taking more responsibility ourselves.
Could you specify?
MC: One conceivable scenario is that we develop and also fund a digital data platform that is cloud-based and interoperable, allowing access to the data stored in the competing clouds of FAIR & Link and the data sharing platform Nallian. So practically, via specific apps both clouds can be used by the cargo community, allowing the exchange of data.
According to our specification, this should be done on a piece-level basis. This way, customs, handling agents, and truckers get all shipment specifics very early.
Another advantage is that the deployment of personnel can be optimized leading to reduced costs.
Up to now, cargo was a division within airport operator Fraport AG resembling an appendix. Now it becomes a standalone department. Which are the advantages of this upgrade?
MC: The biggest advantage is that cargo as a business segment is becoming significantly more important within Fraport. It gives our business greater impact and a distinct voice when it comes to future decisions. Let me add to this that we’ll also enhance our communication strategy, making it very clear to the market which wide range of opportunities our airport offers the cargo industry.
Thank you for your time and good luck with your plans.
Interview: Heiner Siegmund