CNS 2018: Lufthansa’s von Hoensbroech said air cargo community must innovate, improve quality

PALM SPRINGS, CALIF. – These are truly magical times in the air cargo industry. In yesterday’s Keynote Address here at the CNS Partnership Conference, Dr. Alexis von Hoensbroech, chief commercial officer for Lufthansa Cargo AG, acknowledged that the sun is shining brightly on the air cargo industry right now, but he warned that a number of problems must still be addressed before the current boom can be maintained at a sustainable level.

Despite the current happy outlook of today, von Hoensbroech, who will step down from Lufthansa Cargo to take over the CEO role at subsidiary carrier, Austria Airlines, on Aug. 1, gave a mostly critical assessment of the airfreight industry after spending three years with Lufthansa Cargo.

Some of the main challenges remaining are the continued reliance on paper-based air waybills (AWBs) and the slow adoption of electronic replacements (a situation he described as “definitely half-empty”). Combined with the currently volatility seen in market over the last 4.5 years, these factors have made it next to impossible to predict freight rates to customers with any accuracy. “Things have been so unforeseeable,” he said. “Cargo is too dependent on external factors to make predictions.”

He also listed common airfreight myths that need to be discarded in order for cargo to succeed in the 21st century, including attitudes like, “My data belongs to me” and “price transparency will kill my margins.” He suggested that air cargo companies decide: “Whether you’re going to be another Kodak, which ignored the digital imaging revolution, or another Apple,” which embraced innovation.

Still, the keynote left a lot of room for hope for the future, such as progress with Cargo XML and the gradual increase of e-AWB adoption. “There is no lack of good ideas in this industry… What we are lacking in this industry are the implementation of these things,” adding that carriers have to do a much better job on quality if one out of ten shipments is not delivered properly.

Automation, he said, in the form of blockchain, robotics or artificial intelligence, could increase efficiency of air cargo transactions by 70 percent. “You have to decide, ‘Is this your opportunity or your threat?’” he asked. “But in the end, the world is not waiting for us. About $5 billion is being invested in digital processes in the next few years, so the market will choose for us.”