Lufthansa expands to fill timely cargo niche
Lufthansa Cargo has adopted a four-part strategy to expand market share in southern China and Taiwan.
Felix Keck, regional sales manager, said the plan included efforts to attract additional high-yield cargo and the introduction of more time-definite products.
It would also offer improved services through its quality-certified processing representatives and general service agents, and work with forwarders, shippers and consignees in a tripartite approach.
'Lufthansa Cargo, which currently has 12 Boeing 747 freighters, is also boosting its fleet with an additional 12 MD-11s by the end of 2001,' he said.
The carrier has been watching developments in e-commerce and working closely to keep pace with them.
Mr Keck said Lufthansa had completed its phased introduction of a range of time-definite express products by the end of last month.
Products most popular in Hong Kong include a package for transporting refrigerated goods, such as pharmaceutical products (mainly import), and another for theft-endangered goods, such as telecommunications, electronics and computers.
One service package deals with highly valuable goods such as jewels, diamonds, gold, precious metals, bank notes, credit cards and travellers' cheques.
There was also a package for handling shock-sensitive goods that had proved more popular in Japan and South Korea, and packages for handling perishable and dangerous goods.
The services have been tailored to meet customers' needs based on feedback from shippers and consignees.
'We now have everything in place and we believe we have the advantage over our competitors. We don't fight with price, but with our time-definite portfolio,' Mr Keck said.
He added Lufthansa Cargo was pleased to see that some of its competitors were following in its footsteps and also moving towards providing time-definite products. These airlines included SwissGlobalCargo, which provides traditional airfreight services for Panalpina, Air France, KLM and Northwest.
Lufthansa Cargo, which has a joint venture with Cathay Pacific Airways, flies 14 Hong Kong-Germany 747 freighter services a week, or two services daily. Beside this they also use the belly-space of 10 Lufthansa passenger flights.
Since introducing time-definite services in 1998, Lufthansa Cargo has stopped handling general cargo. Similar to other express distributors, it now concentrates solely on time-definite products.
Mr Keck admitted Lufthansa's summer cargo volumes were down slightly compared with last year, due to more competition in the market and the weaker euro. Cargolux and Dragonair had brought additional airfreight capacity this year, making supply greater than demand.
Meanwhile, the weaker euro had led to increased imports by Hong Kong businesses, Mr Keck said.
Asked about the difficulties in switching from general cargo to time-definite services, he said the biggest challenge in the past two years had been to change the mind-set of staff. In Hong Kong, the company has 16 sales staff at its Tsim Sha Tsui office and nine others handling operations at Chek Lap Kok.
Lufthansa Cargo, which initially introduced its time-definite services to 60 destinations, has now extended them to all its 450 worldwide destinations.