… Peter Gerber, President of the Federal Association of the German Air Transport Industry and CEO of Lufthansa Cargo, exclaimed during a recent webinar. His point: it was the cargo
industry that ensured the vital flow of urgently needed goods during the corona crisis, which earned its actors praise and acclamation.
The way corona affected the air freight business and how it influenced daily procedures was the subject of a question-and-answer session with panelists Markus Otto, DHL, Dorothea von Boxberg, Lufthansa Cargo, Michael Mueller, Fraport, and Timo Stroh, Chairman of the Air Freight Committee at the Forwarder Association DSLV. More than 300 participants had registered to participate in this virtual discussion which was moderated by BDL Chairman Matthias von Randow – a remarkable attendance.
In his introductory remarks, Mr. Gerber emphasized the enormous systemic importance of the cargo industry shown by the fact that between MAR20 and JUL20, 3.5 billion urgently needed face masks in
combination with hygiene articles and protective equipment were flown to Frankfurt Airport.
“The pandemic has shown that whenever goods are urgently needed, air freight is the first priority and is therefore indispensable for supplying people and markets with products,“ the manager stated.
Crisis as catalyst
At the same time, Gerber demanded that the crisis should become a catalyst for the industry, throwing old habits overboard and innovating processes. Speaking on behalf of the Air Transport Association, he tabled three core demands:
- Airlines can only secure their liquidity if travel restrictions are phased out soon, if necessary, in combination with health checks.
- Global competition must be made fairer. "We need a level playing field in aviation," the manager emphasized.
- Aviation climate-friendliness must be given utmost priority, was his third major point. For example, through the large-scale industrial production of synthetic fuels or the coordination of European air traffic control. He said it was a scandal that the Single European Sky has not yet been implemented, but keeps being torpedoed by national egoisms of some EU member states. Its introduction could save up to 10% in CO2 emissions. It is the task of the European Commission to overcome this opposition within the framework of its announced Green Deal, he addressed Brussels directly.
Of losers and winners
The fact that Covid-19 has produced many losers, especially small and medium-sized freight forwarders, but some winners, too, was also an issue discussed during the webinar. Due to the booming online trade in the lockout phase, the Amazons of this world in combination with integrators such as DHL, benefitted from Covid-19. However, Markus Otto of DHL subsidiary, European Air Transport, partly contradicted this view. There were empty flights and market closures caused by corona that have cost his company money, he said. Leaving these financial considerations aside, it is of higher importance that DHL was very clearly perceived by people as a system-relevant company that maintained supply chains in critical times, he stated. This positive aspect is what really counts!
In addition, Leipzig Airport has benefitted greatly from the large number of DHL freighter flights and has become one of the most important cargo airports in Europe in recent months, Mr Otto said.
Hurdles must be set aside permanently
Further to this, the manager demanded that the changed framework conditions for air freight, i.e. the abolition of previous restrictions such as night flight bans or the ban on truck traffic on Sundays and holidays, must be made permanent. "The old restrictions must not be reintroduced once the pandemic is over," he urged. "These hurdles and bureaucratic restrictions need to be set aside because they massively hinder the German aviation industry in international competition.”
Forwarders try to keep their heads above the water
To what extent was illustrated by speaker Timo Stroh of forwarding agent Dachser, who pointed out that 21% of all general cargo exports coming from producers in Germany are trucked to Amsterdam or Paris CDG, in this way dodging the bureaucratic security regimes and customs practices prescribed by the German regulator. This unequal treatment to the detriment of domestic companies must end, he demanded. Not just corona, also these obstacles erected by the legislator caused up to 40% of the approximately 1,600 freight forwarders in Germany to fight for their very survival, Timo Stroh declared in the name of Forwarding Association DSLV.
Freight business has begun to pick up again
Regarding airports, Labor Director Michael Mueller of Rhine-Main operator Fraport, reported that volumes are substantially rising again lately following their stark contraction in April and May. He also said that the structure of air freight has changed significantly. "Before corona we had mainly consolidation, now small packages prevail which require more manual work and physical effort from our ground handling staff."
Unilateralism is poison to free trade
Stefan Mair from the industry association BDI, brought a striking note into the discussion. In the opinion of his association, the pandemic has favored protectionism. The aggressive state capitalism of the Chinese backed by their sheer economic power, is increasingly distorting international competition and leading to unilateral trade advantages. Conversely, the U.S. policy of sealing itself off with tariff barriers, has reinforced this trend. Soon the situation might worsen should the WTO – as expected - condemn Boeing for illegal state subsidies and grant a high compensation payment to Airbus. This, in turn, might provoke the Trump administration, Mr. Mair assumes, to impose further duties on European exports to the USA, in addition to steel and aluminum.
Framework conditions must be changed, Mrs. von Boxberg demands
Further to this, he emphasized that his organization does not recommend European companies to relocate their production from the Far East or North America to Europe, as demanded by many during Covid-19, due to the absence of China manufactured masks or protective materials. „We oppose any artificial partitioning of the markets, but we expect our partners to ensure compliance with the competition rules.“
A statement strongly supported by Dorothea von Boxberg, Head of Sales and Marketing at Lufthansa Cargo. "What’s needed, is an improvement of the framework conditions,“ she urged, concerning the security regulations, customs practices, and value tax conditions. Asked if Lufthansa Cargo benefitted from the pandemic financially, she bluntly said that “we made our contribution.” Period.
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