Lufthansa strengthens position in air freight industry
The global economic crisis that started in the late 2000s hurt businesses all over the world. Remarkably, one report that surfaced today is claiming a major air freight company was helped by the worldwide economic instability.
TransportIntelligence.com said today in an article titled “Lufthansa continues to exploit air freight’s recovery” that German-based Lufthansa Cargo “used the recession to increase its market share.”
“Exploit” is a pretty harsh word, but Lufthansa Cargo has reported some pretty remarkable figures over the last few quarters. The first quarter of 2011 may have been its best. Lufthansa Cargo increased revenue by 31.8 percent year-on-year, while its earnings before interest, tax, depreciation and amortization (EBITDA) is up 19.7 percent.
The report attributes increasing demand as the biggest reason to Lufthansa Cargo’s success, but that hasn’t helped some of the company’s biggest competitors in air freight.
Air France-KLM reported much more modest figures for the first quarter and still saw an operating loss of €9 million and hasn’t shown a drastic increase in shipping volume.
Japan’s ANA airlines saw drastic growth in international traffic, but its domestic business grew only 1.8 percent.
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So does that make Lufthansa Cargo ruthless or business-savvy? The company is now the largest air cargo carrier outside of the major multinational corporations, and certainly a strong business plan during the global economic crisis helped the company survive and grow.
Lufthansa Cargo has continued to expand its fleet, and its unparalleled growth in the air freight industry raises some concerns as to how the German-based airline has had success when others have struggled.
Until we hear of any wrongdoing from Lufthansa Cargo, however, we’ll attribute the success to smart management. Part of being a long-term successful business is exploiting opportunites, and that’s exactly what Lufthansa Cargo did.
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.