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
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
Alexis von Hoensbroech