Foto by flickr.com — Preus museum

Real speed on a reliable basis

by Nick Blake

We always think of air cargo as being the quickest way to move freight over long distances, but what may surprise some is that transit times have actually been extending on many trade lanes, even during the ‘jet age’. Lufthansa Cargo CEO Karl Ulrich Garnadt at the IATA Aviation Day in Frankfurt showed an advertisement the carrier had run in the 1960s showcasing the then new Boeing 707 freighters operated by them. This ad highlighted transit times of up to three days over a particular route. Mr Garnadt explained that over the same route the current transit time has increased to up to six days. So the industry now offer a service twice as slow as at the start of the jet age. Shocking information indeed. The situation is an industry-wide problem, not something isolated to Lufthansa, although brave of them to highlight the issue in such a way. There are of course a number of contributing factors leading to the extension in transit times, not all of which are easy to control but this can’t be helpful in selling the benefits of premium priced air cargo to customers.

Other modes of transport are certainly offering much longer transit times, but also for a significantly lower cost. The integrators have also increased their presence in the space traditionally occupied by the classic airfreight business — in their case transit times have reduced, intercontinental overnight service being a reality today on certain routes. Given the choice that shippers will increasingly have to ship their products by other means — somewhat slower for significantly less cost by ocean and significantly faster for a premium over classic airfreight with an integrator, there is a real danger of difficulty in continuing to sell the cargo value proposition to end customers.

Increased speed has got to be a priority for those that wish to remain competitive in the marketplace, but only if it can be provided on a reliable basis. The days of vague promises on transit times may well be coming to a close. More likely is a demand for regular time-definite service, perhaps with ‘money-back guarantees in come cases. This would be a value proposition much easier to defend in the marketplace, and one that could earn a premium that generates sustainable profits even in the classic cargo business.