GENEVA: Karl Garnadt, CEO and chairman of Lufthansa Cargo, has warned that the day is fast approaching when his company will make electronic data interchange with forwarders mandatory.
He says the air cargo sector has not improved its value proposition to shippers since the 1960s when his company advertised a three-day delivery time worldwide. At the same time, he expresses frustration that forwarders continue to demand a price for eliminating paper-based processes by asking "what's in it for me?"
Garnadt thinks "cost-savings" is the obvious answer and appears determined to give forwarders who don't adopt e-freight a stark choice: get on board or get off.
Citing the continuing shift from air to sea and rail by shippers, he says that despite improvements in technology, the traditional airline/forwarder option still averages six days door-to-door with most of that time spent on the ground. Meanwhile, ocean carriers have reduced average transits from 23 to 19 days.
While IATA says international freight volumes are likely to rise 17 percent over the next five years, Garnadt suggests that without action now by all stakeholders, there's every possibility that the growth will benefit Integrators and traditional air cargo will continue to decline.
Commenting on the modal shift to either the Integrators, sea or rail, Tom Mack, DB Schenker senior vice president and head of airfreight comments: "It is a matter of fact that the traditional airfreight product is losing market share against other modes of transportation as well as to the Integrators. We continue to look at our industry not as an integrated service provider but add layers and layers of complex processes to slow down the transit time and increase the cost. There is only so much that an airline can do to encourage e-freight. It is also a responsibility for the forwarding community to develop and continue to roll out e-freight globally. I do see that as a shared responsibility."
Lucas Kuehner at Panalpina echoes a similar degree of frustration: "In the eyes of the customer, airfreight is about 10 times more expensive than ocean freight. When contracting airfreight, the customer expects speed, visibility and security. As an industry, we need to do much better in the future to provide shipment visibility from door to door. We have the tools in place, but we need the commitment and focus from all stakeholders to adhere to these guidelines."
Michael Blaufuss, Agility vice president of airfreight adds: "Air cargo needs to become a more reliable product for our customers. The door-to-door supply chain needs must have harmonized, visible and measurable quality standards. Additionally the air cargo industry needs to put more efforts into sustainability, and communicate what we do for a more environmentally friendly product."