Just a couple of mouse clicks and the job is done: a shipment is electronically booked on a certain route at a fixed price and the transport capacity is secured. It’s as easy as
Rapid Rate Response (RRR) is the name of the new eBooking tool that is linked to Lufthansa Cargo’s existing online sales channels. It could well become a trailblazing model.
The air freight industry’s relatively hesitant embracing of business models based on digitalization is finally gaining speed. Various carriers have started introducing electronic sales channels which display dynamic spot prices for a variety of products available for immediate booking, thus accelerating business processes and making freight flows easier.
Air France-KLM-Martinair already rolled out their booking tool “MyCargo” two years ago. It turned out to be a success, shown by data verifying e-booking rates representing 50 to 90 percent of all sales, depending on local specifications, confirmed a leading KLM manager to CargoForwarder.
Now Lufthansa Cargo follows suit by introducing their “Rapid Rate Response” (RRR) system. Dorothea von Boxberg, CCO at Lufthansa Cargo, explained: "With automated spot prices, we are speeding up and simplifying our booking process considerably and further expanding our digital sales channels.” She went on to say: “This complements our existing personal and digital services.”
Obviously, a step welcomed by forwarders, as announced by managing director Guenther Gasthuber of consolidator IGLU Air Cargo in a first reaction: “In a phase in which customers expect an
ever faster response time, this tool can be quite helpful. I think this direct booking option is a major step forward and an interesting offer for our 24 individual IGLU shareholders."
The RRR mechanism will be kicked off before the year draws to a close, Lufthansa Cargo assures in their press release. It will generate spot price offers for all customers based in the following pilot markets: China (Beijing), India (North and Northeast,) Iran, Mexico, the Middle East, Portugal, Spain, Thailand, Turkey, USA, Vietnam.
Forwarders welcome the new tool
Following this initial step, Lufthansa Cargo intends to gradually extend the system globally until the end of 2020. Prospectively, external sales platforms will also be successively connected to the scheme, such as cargo.one. It is the first platform giving access to real-time prices and available capacities, with which Lufthansa Cargo cooperates closely since mid-2018.
Forwarders consider Lufthansa Cargo’s offering of new electronic sales channels as a reaction to the rapid decline of capacity purchase agreements and the shift towards spot prices. This was indirectly confirmed by CEO Peter Gerber at the recent meeting of the German Air Cargo Association (ACD), where the manager emphasized that Lufthansa Cargo will focus increasingly on the spot market.
In addition to secure rates and transport capacity via the carrier’s own eBooking channel, Lufthansa Cargo intends to offer agents the option of directly connecting their own systems via an application programming interface (API).
AF-KL-MP and K+N are API trailblazers
This follows on the example of AF-KL-MP Cargo and Kuehne + Nagel who joined forces last August to integrate their electronic booking processes. In a proof of concept, the two companies enabled total host-to-host connection through API allowing for a system-based, integrated and interactive match between available capacity and demand.
It is the first time that a cargo carrier and a global logistics provider create a direct system-to-system connection that transforms manual quotation and capacity booking process into a digital automated solution, fostering collaborative relationships and next-generation supply chain practice.
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