“Challenging” would be a euphemistic description of the situation the German air freight industry is gradually slipping into. “Extremely worrying” would be the more correct characterization of the status. At least this is the assessment of the German Aviation Association (BDL). The reasons for the gradual but permanent decline are manifold. This was confirmed by leading representatives of the industry during a recent meeting in Berlin. There is no fast-acting remedy in sight to bring about a U-turn.
What is still just an alarm signal today could turn into an SOS tomorrow. That is how dramatic the situation has meanwhile become for the cargo industry in the EU's strongest economy. The woes were confirmed last Tuesday (12SEP23), by Mathias von Randow, CEO of the German Aviation Association, at an industry meeting in Berlin. High-ranking managers from DHL Aviation, logistics player Dachser, and airports executives from Frankfurt, Leipzig, and Cologne issued very similar warnings about the slow demise of this systemically vital industry.
Look to Canada
The key problem: Cargo is a people’s industry. But there aren’t enough people available to keep the business running in top gear. At least, not at German airports. According to Detlev Scheele, the former head of the Federal Labor Office, the country will face a shortage of about 7 million workers by 2035, as people get older and retire. And the resulting gap will not be closed by baby boomers or sufficiently skilled immigrants. “The lack of manpower is one if not the greatest obstacle, blocking the German economy’s further growth, including the cargo industry,” Mr. Scheele reasoned. He recommended that the Berlin policymakers adapt the Canadian system to attract qualified migrants who enrich the labor market and pay into the social system.
Risking loss of prosperity
His colleague, Markus Biercher, the Northern Germany regional head of the state-run Employment Agency, described it even more drastically: “Germany is dying a slow death!” In a conversation after the event, Max Conrady, Head of Cargo at airport operator, Fraport, put it in a nutshell: “Either we manage the turnaround, or we face a massive loss of prosperity.”
An overview presented by the German Aviation Association shows the outstanding contribution made by the air freight industry to the economy as a whole. Measured by value, air freight by far exceeds all other modes of transports. In 2022, trucking accounted for EUR 6,525 per ton, in sea freight it was EUR 2.493 per ton, followed by rail freight with EUR 2.090 per ton. In contrast, EUR 173,270 per ton was attributable to air freight imports in 2022, while cargo exports reached 139,729 EUR/ton.
Urgent and high-quality products
Yet besides the value of goods, it is the relevance of the products abord aircraft that counts. When looking at exports, these are mainly high-value goods from machinery and industrial engineering segments, products of the chemical and pharmaceutical industries, electrical and electronic goods, precision devices, medical appliances, components for cars, trucks and the aviation industry, but also luxury and classic consumer items.
The overall consensus of panelists and hand-picked attendees of the Berlin meeting was that the labor market not only urgently requires new and fast incentives, but that this has to be coupled with drastically improved business conditions for airlines, airports, handling agents, and GSAs. For example, cutting through red tape, reducing the exorbitantly high taxes that airlines need to pay when serving Germany, improving the image of air freight as a key business enabler and as the driving engine of the logistics industry, which employs around 600,000 people in Germany. It could even be roughly 20,000 more. That’s the number of truck drivers currently lacking.
Robots are helpful, but…
What also became very clear at the industry meeting: robotics, automation, and the increased use of artificial intelligence can make work flows easier and more efficient. Harald Sieke, lecturer at the Fraunhofer Publica Institute, emphasized this in his presentation. However, EvoBots, smart Air Cargo Trailers or other Autonomous Mobile Robotic Systems (AMR) cannot replace human labor. And even so, people will always be needed to do other jobs.
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