Maritime and air logistics are two different animals, with own processes and requirements, states Lufthansa Cargo CEO, Dorothea von Boxberg (DvB). Currently, it may well be attractive to Maersk, CMA/CGM, and others to lease freighters to overcome capacity constraints and offer their customers timely delivery of goods, she reasons. Yet, come market normalization, it will be a completely new ballgame for shipping lines, the executive forecasts in this exclusive interview.
CFG: Are shipping lines operating freighters seen as new and serious competitors for classic cargo airlines such as Lufthansa Cargo?
DvB: That's very questionable. Personally, I see little synergies between the two business segments of sea and air. The proponents probably underestimate what it takes to operate an airline profitably over a longer cycle. It requires a minimum fleet size and high commercial and operational competence to be financially successful. To me, it appears that shipping companies are chartering freighters in response to, and for the duration of, the current capacity squeeze.
CFG: For shipping lines, freight forwarders traditionally play kind of a second or even third fiddle, because they rely on direct business contracts with industrial producers. Will shipping lines operating freighters push agents over the edge if they adopt this business model?
DvB: I very much doubt this. At Lufthansa Cargo, we have always stuck to the tripartite model when shippers insist on a direct connection to the airline. Then shippers, forwarders, and we as capacity provider are all in the same boat. The forwarders deliver valuable benefits because they take a lot of work off the shippers’ hands, be it documentation, customs clearance, trucking, and other services. In addition, they offer producers a wide portfolio of carriers they can choose from to ship their goods as air cargo. Hence, agents have a great reason for being, from our point of view. Shipping companies that operate freighters will find out how tedious the air cargo business is without the involvement of freight forwarders.
CFG: Lufthansa Cargo and booking platform cargo.one have just announced the introduction of Auto Assigned Air Waybills. Booking shipments without an AWB – how does this work?
DvB: In the past, customers had to request a stock of AWBs well in advance, which they needed in order to place a booking. These stocks were only valid for a certain period of time. Further, individual AWB numbers may be rejected at the point of booking since various country customs regulations require that the carrier ensures the number is only reused every few years. This legacy process has been completely redesigned.
When customers click "Book Now", the AWB is generated automatically. The procedure is simple and takes further complexity out of the process. We believe that it will increase the attractiveness of booking platform cargo.one, directly benefitting us and the entire industry. Auto Assigned AWBs is a strong example of the efficiency advantages that a digital booking infrastructure delivers to forwarders.
CFG: Lufthansa Cargo operates 15 B777F, with 4 of them flying in the colors of your DHL JV partner, AeroLogic. Now you intend to grow your fleet further by adding the B777-8F or the new
Airbus A350F. Which of the two freighters does Lufthansa Cargo favor?
DvB: We are evaluating both models very thoroughly, concerning range, load factor, fuel consumption, and other key parameters, to find out which aircraft fits best our network requirements and operational needs. What I can confirm is that a final decision will be taken in the course of this year.
CFG: How many additional freighters are we talking about?
DvB: We'll tell you once we have taken the decision.
CFG: You are heading Lufthansa Cargo since 01MAR21. Only weeks ago, you presented the best financial result ever achieved by Lufthansa Cargo. But all that glitters is not gold. What have been the most demanding challenges you had to master since taking office?
DvB: Challenges – you can say this twice. We got though the pandemic relatively well. Despite temporary staff shortages, we managed to keep our service promises to customers – thanks to the flexibility and engagement of our employees. We have made great progress in digitalization, as evidenced, for example, by the e-AWB rate of 100%. And what is particularly important to me, is that we are increasingly relying on carbon neutral fuels. Together with our partner DB Schenker, for example, we have just made the one hundredth flight to Asia using Sustainable Aviation Fuel.
In the near future, we want to continue along this path very systematically together with our business partners in order to minimize CO2 emissions or, if they occur, to compensate for them through selected environmental projects.
Overall, I can say that we play a leading role among cargo airlines in terms of sustainability. This, we intend to expand further.
CFG: In a few days, you will lose an outstanding manager, Mohammad Ali Seiraffi, the ground handling chief of your Frankfurt Cargo hub. He will become Senior Director Handling & Sales at Lufthansa Cargo in Japan. What comes to your mind about his work and his person?
DvB: He has pushed the Frankfurt Hub forward, launched the very challenging LCC Evolution project of our Lufthansa Cargo Center, and all this during full operation. He has been the driver and the brains behind the project. And let me add to this that he is an extremely nice person. He has always included the customer point of view in his decisions. In his new role, he is now much closer to the customer, responsible not only for handling processes but also for sales in one of the most important markets for us in Asia Pacific.
CFG: Finally, can Cargo Human Care, the aid project for orphans and people in need set up by employees of Lufthansa Cargo in Kenya, count on your ongoing support?
DvB: Of course. Many of our employees have become godparents or sponsors of orphans. They collect money or support the project in other ways. I think this commitment is exemplary, and so does the entire management of Lufthansa Cargo, especially since this commitment creates a strong sense of identity.
Now Cargo Human Care, in cooperation with our subsidiary time:matters, has begun sending aid shipments to Ukraine via Poland. An initial announcement immediately resulted in 35,000 euros in donations. Via our road feeder network, we transport the relief supplies to Katowice in Poland, from where they are brought across the Polish/Ukraine border to Lviv and distributed within Ukraine right after arrival. These supportive actions initiated by Cargo Human Care, have just begun and will be continued.
In the next few days, we will again start to promote the participation in the Frankfurt office city run. An event that has taken place virtually in the last two years, and therefore has won many fans also worldwide. Some of our colleagues ran together with teams of our customers for the good cause. We are all very proud of this commitment and the willingness of our colleagues and customers to help.
CFG: Frau von Boxberg, thank you for this interview.
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