Lufthansa Air­lines ad­vo­cates digi­ti­sa­tion in cargo in­dus­try

IN­SIST­ING THAT THE EN­TIRE AIR­FREIGHT in­dus­try needs to adopt digi­ti­sa­tion to help it evolve, Alexis von Hoens­broech, Chief Com­mer­cial Of­fi­cer, Lufthansa Cargo, sug­gests adopt­ing elec­tronic house bills as the first step. He also goes on to ex­plain the comp

Cargo Talk - - Aviation - HAZEL JAIN

How is In­dia per­form­ing as a mar­ket for Lufthansa Cargo?

While we have no cur­rent plans to open a new sta­tion in In­dia, we are op­por­tunis­tic with re­gards to ad­di­tional ca­pac­ity. If the mar­ket picks up, and is strong enough to com­pete with other po­ten­tial mar­kets where we can de­ploy our freighters then we will def­i­nitely con­sider ex­pand­ing ca­pac­ity here. We have made some up­grades on the pas­sen­ger side, mak­ing the Mu­nich flight daily and chang­ing the Mu­nich–Mum­bai into an A350-900, which is a fan­tas­tic cargo air­craft and loads more than 30 tonnes.

How ma­ture is the air­freight in­dus­try here?

Air­freight is just an en­abler. You can have the best air­freight in­fra­struc­ture but with­out the man­u­fac­tur­ing base be­hind it, it doesn’t help. So, it starts with cre­at­ing ad­di­tional air freight de­mand. Bring­ing up the man­u­fac­tur­ing base in In­dia is the first nec­es­sary pre­con­di­tion in or­der for this mar­ket to grow. In line with this, the in­fra­struc­ture needs to be built.

Does the cur­rent in­fra­struc­ture in In­dia sup­port this need?

It is partly good in In­dia and a lot has been done. But there’s still a lot more to be done – within the air­port, around the air­port with re­gards to for­ward­ing in­fra­struc­ture, and of course road in­fra­struc­ture be­cause the man­u­fac­tur­ing base sits across the coun­try and cargo needs to be trans­ported to the air­port by road. The new uni­fied GST sys­tem in In­dia was a very good step for cargo and has made the jour­ney smoother. But this is only one el­e­ment.

How well does In­dia score in terms of dig­i­tal­i­sa­tion?

What In­dia is do­ing well is in terms of dig­i­tal­i­sa­tion and the share of elec­tronic house bills is nowhere as high as in In­dia. In­dia has a strong tech­no­log­i­cal cul­ture and in this en­vi­ron­ment, In­dia can make its mark in the air­freight in­dus­try. But the ba­sics need to be in place in terms of man­u­fac­tur­ing, in­fra­struc­ture, etc.

How far is it lag­ging vis-à-vis the global mar­ket?

The air cargo in­dus­try glob­ally is lag­ging. Pro­cesses are still be­ing done like they were 40 years ago. There is def­i­nitely a huge po­ten­tial for dig­i­tal­i­sa­tion in In­dia and elec­tronic house bills is only step one. I am dis­ap­pointed how glob­ally this in­dus­try is adapt­ing the elec­tronic house bill. Peo­ple have been talk­ing about it for 20 years. It has been avail­able for eight years, and we now just hit the 50 per cent mark in terms of pen­e­tra­tion. As a re­sult, we will most likely in­tro­duce a fee for non-elec­tric house bills world­wide in the near fu­ture. It’s a lot of work for us to process the pa­per­work. So we will charge for the ex­tra work. This is just one step to­wards dig­i­tal­i­sa­tion.

You re­cently in­vested in a start-up called Fleet Lo­gis­tics. What was the idea be­hind it?

Fleet Lo­gis­tics is a US-based startup. It is cre­at­ing a plat­form that will con­nect sev­eral play­ers in the lo­gis­tics in­dus­try – air and sea freight. It is con­nect­ing ship­pers, for­warders, cus­tom bro­kers, air­lines, ship­ping lines across the world on a sin­gle plat­form. We think this is one of the pos­si­ble fu­ture busi­ness mod­els that will show up in our in­dus­try. It is just a fi­nan­cial in­vest­ment and we are a mi­nor­ity in­vestor in this com­pany. We did it be­cause we want to be very close to new busi­ness mod­els in our in­dus­try. Not only be­cause this mar­ket might be a fi­nan­cially­at­trac­tive in­vest­ment but also be­cause we want to learn from it. We want to ready our­selves to co­op­er­ate with such busi­ness mod­els. How­ever, this does not change the way we op­er­ate and do busi­ness. We con­tinue to do busi­ness only with for­warders.

Bring­ing up the man­u­fac­tur­ing base in In­dia is the first nec­es­sary pre­con­di­tion in or­der for this mar­ket to grow. In line with this, the in­fra­struc­ture needs to be built

Chief Com­mer­cial Of­fi­cer Lufthansa Cargo

Alexis von Hoens­broech

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