Driving To Deliver Your Business

2017 was one of the most successful years ever for Lufthansa Cargo

(C) Typhoonski

By [1]

Lufthansa Cargo has erased 2016’s dire numbers from its memory as it announced one of its most successful years to date. Operating profits for the 12 months to December 2017 hit EUR242m – a stark contrast to the EUR50m loss it reported a year ago. Chief executive Peter Gerber said 2017 had developed into one of the “most successful” years in the history of Lufthansa Cargo.

“We have achieved impressive earnings and, in the volatile logistics business, our team demonstrated high professionalism and passionate commitment,” said Mr Gerber. “For the current year, we will therefore remain focused on pursuing our efficiency programme and investing in our future.” Sales, in revenue tonne km (RTKs), rose by 7.4%, far outstripping the 3.3% growth in capacity, with the carrier handling some 1.6m tonnes leading to EUR2.54bn in revenues, up 21.1% on 2016.

However, its RTKs were still some way below industry average, with European sales down 0.4% compared with average industry growth of 11.8%. Operating expenses crept up 6.7% to EUR2.4bn, with the price of fuel representing the biggest increase, up 25.9% to EUR326m. But growing costs were more than written off by the near 600% increase in ebit, while load factor also climbed 2.7% to 69.3%, amid heightened demand and yield increases of 14%.

Mr Gerber told The Loadstar that “clearly” the strong market for air freight played a hand in the carrier’s return to growth, but said there were other factors. “We also underwent a successful restructuring, which took place while the market was down,” said Mr Gerber. “And we had nearly completed this process when the air freight market began to pick up again.” The restructuring included reducing its employee count by some 800 and scrapping two of its MD-11 freighters.

The carrier now operates a fleet of 12 MD-11Fs alongside five B777 freighters, and has plans to alter its fleet composition in the near future. “We intend to bring in new cargo aircraft, but the question is ‘when?’,” Mr Gerber said. “For us it is good that we have these old MD-11 as it leaves us flexible – we can bring in new aircraft and drop the MD-11s if we need to reduce capacity.” When asked about overcapacity, Mr Gerber said he could not foresee a repeat of the start of the decade, which saw the market flooded with capacity causing rates to plummet.

Amid the optimism, chief financial officer Martin Schmitt told The Loadstar the change in the market was “unforeseen” by the industry. “Before the shift, what we had was very definitely a buyer’s market but now – especially after the November and December peaks – we have a seller’s market,” said Mr Schmitt. “It flipped the game in a fairly extreme and unforeseen way.” Mr Gerber highlighted e-commerce as an important avenue for growth, noting that express operations had increased “considerably”.

“It is clear that this sector is strong and growing fast, and we expect to see more e-commerce volumes going forward,” he said. “We are looking to develop a special product that will improve our participation within this sector, and I do believe we will have a result soon.” Neither Mr Gerber nor Mr Schmitt would offer much on the picture for the air freight market in the long term, but both were confident about the next quarter or so. Citing “certain base factors”, Mr Gerber said he was anticipating growth of 3-4% for the next mid-term cycle, while Mr Schmitt said 2018 has started well.

“I cannot say how long we will see growth in the market, but the good times did not stop after Christmas, with IATA positive for the next few months at least,” he added.

“For Lufthansa Cargo, though, the biggest and most important season runs from November to December and this I can’t predict – we will see.”


  1. ^ (theloadstar.co.uk)

Snippets of Logistics News

Some Smaller But No Less Important Stories Around the Industry NETHERLANDS – In multimodal news the new short-sea container service between Amsterdam and Hull which was announced earlier this month[1] was formally inaugurated this week with the first call of the 340 TEU vessel THEA II at Amsterdam Container Terminal (ACT). The service, operated by Samskip[2] offers three sailings a week on this new route with vessels departing from Amsterdam on Mondays, Wednesdays and Saturdays. Terminal and intermodal functions are performed by ACT, operated by TMA Logistics[3] in which Hutchison Ports[4] is a 50% shareholder.

The new service calling at the deep water facility was welcomed by the Director of Energy, Cargo & Offshore at the Port of Amsterdam[5], Femke Brenninkmeijer who said the new route was a perfect fit for the Port’s core business as a central short sea hub for Europe.

NETHERLANDS – The European Rail Freight Association (ERFA[6]) which represents new entrants into the track borne cargo market, all of whom doubtless want open access and fair market conditions, has spoken on the subject of new ‘marks ups’ which could be introduced in the Netherlands from 2020. The Dutch government has introduced new rules that enable the infrastructure manager ProRail to apply new mark ups in the calculation of track access charges. For rail freight operators, new mark-ups could be introduced based on train path efficiency, among others.

Although officials argue that this could lead to lower access charges for some, others suggest the contrary. A mark up is the difference between the cost to the supplier and the end price charged, in other words the gross profit. The amount is strictly limited by the regulatory authorities and the ERFA say that the current consultation between ProRail and the Dutch Regulatory Body should include input from those companies it represents.

The principal concern is competitiveness and that ProRail future mark ups reflect the ability of rail to compete with road rather than looking inwardly at the railway system. The ERFA believes that with track access charges accounting for between 20 and 35% of total operational costs of the railway undertakings an increase in these costs could weigh heavily on the rail freight competitiveness and improving the financial performance of rail freight via lower track access charges must be the first objective of European infrastructure managers considering the sworn efforts of the railway undertakings to improve quality. UK – The Road Haulage Association (RHA[7]) is concerned about reports that criminals are ‘gassing’ lorry drivers before stealing goods from their trucks.

In one incident a haulier was parked overnight on an industrial estate in the West Midlands and woke up the next morning to find that thieves had slashed the curtain on one side of the lorry and stolen cargo valued at thousands of pounds. The driver had seemingly been ‘gassed’ whilst asleep and remained unconscious throughout the incident. He was taken to hospital for tests before being released, and there have also been a number of incidents reported in South Yorkshire where criminals have used similar methods to target drivers before stealing goods.

The RHA has urged hauliers to remain vigilant and do all they can to keep themselves safe especially when they have no choice but to take their daily or weekly rest breaks in secluded spots and laybys. HONG KONG – WORLDWIDE – Cathay Pacific Cargo[8] has announced a new partnership with va-Q-tec[9], provider of thermal packaging solutions for temperature controlled transportation. The Bavarian headquartered company produces passive thermal containers, which are designed to maintain a constant temperature during transportation for more than five days and are intended to improve Cathay Pacific Cargo’s Pharma LIFT portfolio by providing its global customers with a solution to the problem of moving life-saving pharmaceuticals by air freight.

Cathay Pacific Cargo, was the first Hong Kong airline to be awarded IATA CEIV Pharma Certification The thermal containers are available in five different sizes, taking up to two US pallets inside, and in six different temperature ranges, from -60?C to +25?C. They guarantee safe temperature-controlled transportation for the pharmaceutical, healthcare and medical sectors.

WORLDWIDE – The Unisys[10] group released a new product last month that will endear them to pet owners travelling by air with their much loved companions stowed separately in the cargo hold. The Digi-Pet Service system includes a two way monitor so owners can not only see what their little darlings are up to, but talk directly to them if they need a soothing voice. Smart sensors attached to the pet’s kennel or carry case monitor and transmit key metrics such as temperature, oxygen levels, vibration and light, and automatically alert the pet owner and airline staff if any factors require action.

Pet owners can also subscribe to live video streaming, photos and voice exchanges so that they can see and talk to their pet via an app on their smart phone or tablet. This latest product is part of the company’s Digistics(TM) suite of innovative digital logistics solutions for air cargo carriers. The 20 global carriers that subscribe to Unisys Digistics transport more than 180,000 animals annually.

In related news United Airlines[11] has suspended the carrying of pets aboard its aircraft after an incident in which a dog died and other pets were shipped to wrong destinations. The company says it will not start to carry pets again until a full investigation has been completed which it estimates will be in early May. UK – A teenager from Warwickshire has won the top prize in a national careers competition, hosted by the Freight Transport Association (FTA[12]) on its stand at the Skills Show 2017 and run in partnership with careers campaign Think Logistics[13].

Ben Bardell won an iPad for achieving the highest score in the Think Logistics quiz, the campaign which aims to encourage more young people to consider careers in the logistics sector. Ben, who is a Year 11 student at the St Thomas More Catholic School in Nuneaton, beat off several hundred other entrants to scoop the top prize. The Think Logistics quiz posed a variety of questions about the contribution made by the logistics industry to the UK economy and tested competitors’ knowledge of key transport facts and figures.

The prize was donated by Career Ready[14], the charity which works to prepare young people for employment. Ben was presented with his iPad on behalf of Think Logistics by Charlotte Wright, West Midlands Regional Manager for Career Ready. UK – Scala[15], the Yorkshire based provider of management services for the supply chain and logistics sector, says it envisages a doubling of the company’s turnover by next year as it plots a package of international growth plans.

The business has reported a strong financial year, increasing its turnover by 40% year-on-year, and aims to double its turnover again to GBP5million within the next three years. Scala has invested heavily in its workforce over the past 12 months, growing its management team fourfold and plan to open an office in China. Scala also intends to expand its management team further in the next two years with the hire of two additional directors.

This will enable the company to extend its portfolio from logistics and supply chain services to include procurement consultancy, a Demand Driven programme, a ‘Cost to Serve’ service, whilst also developing its Benchmarking programme. CANADA – The Government of Canada is testing aqua-tools’[16] B-QUA ballast water sampling and monitoring kit for possible use in the Canadian ballast water surveillance programme. The programme is being led a research scientist from Fisheries and Oceans Canada[17] out of the Great Lakes Laboratory for Fisheries and Aquatic Sciences, in Burlington, Ontario.

The aqua-tools equipment was one of the methods employed in sampling the ship’s ballast water during 28 trials of paired sampling devices. These trials, believed to be the first time that multiple sampling devices had been tested under real operational conditions, compared the capability of various sampling and analysis tools for measuring organisms of various sizes, zooplankton, phytoplankton and bacteria. The Canadian laboratory then carried out additional research using a variety of techniques to better understand the capabilities of different tools, visiting multiple ships with treatment systems and taking samples of treated ballast water.

The B-QUA test kit uses aqua-tools’ new generation Adenosine Tri-phosphates (ATP 2G(TM)) monitoring technique.

First generation ATPs are normally measured using bioluminescence methods, but these are ineffective for water with high saline concentrations, such as seawater, so can be unreliable when used for testing the efficacy of ships’ ballast water treatment systems.

The Great Lakes Laboratory for Fisheries and Aquatic Sciences now plans to carry out ballast water sampling and testing of up to 20 ships this year to assess which tool or tools might provide the best rapid assessment of ballast water compliance.

Snippets of Logistics NewsSnippets of Logistics News


  1. ^ earlier this month (www.handyshippingguide.com)
  2. ^ Samskip (www.samskip.com)
  3. ^ TMA Logistics (www.tmalogistics.nl)
  4. ^ Hutchison Ports (hutchisonports.com)
  5. ^ Port of Amsterdam (www.portofamsterdam.com)
  6. ^ ERFA (www.erfarail.eu)
  7. ^ RHA (www.rha.uk.net)
  8. ^ Cathay Pacific Cargo (www.cathaypacificcargo.com)
  9. ^ va-Q-tec (www.va-q-tec.com)
  10. ^ Unisys (www.unisys.com)
  11. ^ United Airlines (www.united.com)
  12. ^ FTA (www.fta.co.uk)
  13. ^ Think Logistics (www.think-logistics.co.uk)
  14. ^ Career Ready (careerready.org.uk)
  15. ^ Scala (www.scalagroup.co.uk)
  16. ^ aqua-tools’ (www.aqua-tools.com)
  17. ^ Fisheries and Oceans Canada (www.dfo-mpo.gc.ca)

Appointments and Departures in Shipping and Logistics Professions This Week

Some Big Figures Swap Jobs Throughout the Industry DENMARK – AP Moller Maersk’s[1] Chief Finance, Strategy and Transformation Officer and registered Director, Jakob Stausholm has announced his intention to leave the company at the end of the month, following the Danish shipping and logistics giant’s ongoing reorganisation. He resigned from his position after Maersk decided to split his job role, in which he oversaw the areas of Finance, Transformation, IT and Digital, into a fully focused Finance function and the responsibilities of IT, Strategy, Digital and Transformation, into another, under the remit of CEO Soren Skou. Stausholm commented:

“I very much agree with the new organisational design.

It is the right solution for the company, however as a consequence of the change, I have requested to pursue other opportunities.” NETHERLANDS – Bart Pouwels, currently Director Business Development Cargo at Amsterdam Airport Schiphol[2], has been named to lead the Cargo team within the new Schiphol Aviation department, effective 1st April. He will report directly to Head of Aviation Marketing, Cargo, and Customer Experience Maaike van der Windt.

The new department at Schiphol will consist of five teams: Cargo; Route and Business Development; Traffic Analysis and Forecasting; Marketing & Communications; and Customer Experience. UK – Forth Ports[3] has appointed Ann Rooney as its new Business Development Manager, to focus on Oil and Gas support and decommissioning activity for Scotland. She previously worked with DB Schenker for seven years in various roles and also with GAC Shipping Limited as project coordinator and ships agent.

She will be based in Aberdeen. UK – Tony Bauckham has joined Volga Dnepr UK[4] as Commercial Director. Bauckman is responsible for proactive charter sales management as well as for development of the commercial sales team and regional management.

UK – Sir Michael Bibby has been elected 132nd President of the UK Chamber of Shipping[5]. John Denholm, chairman of J&J Denholm, was elected Vice-President. Sir Michael is planning to step back from his position as Managing Director of Bibby Line Group during 2018 to allow him to better focus his time on external work interests, including his involvement with the UK Chamber.

UK – Karen Smart, currently Director of Landside Operations at London Stansted Airport, has been appointed Managing Director of East Midlands Airport[6]. Smart will take up her role at the pure cargo airport in April and takes over from Andy Cliffe, who is leaving the business to take up a new role as CEO of Midland Expressway. UK – Charity Chief Executive, Commodore Malcolm Williams CBE RN, has retired from the national maritime charity, the Shipwrecked Fishermen and Mariners’ Royal Benevolent Society[7], after 14 years at the helm.

UK – Whistl[8] has appointed Fabiola Sharrat as Operations Director, effective April 3. She will also sit on the Executive Board. FINLAND – Tuomo Valkonen has been appointed as the new Chief Financial Officer of the Evac Group[9], effective May 1.

He will be based in Espoo, Finland, and report Tomi Gardemeister, President and CEO. BELGIUM – Dieter Vranckx, currently Lufthansa Vice President Asia Pacific, has been appointed as the new Chief Financial Officer and Deputy Chief Executive Officer of Brussels Airlines[10]. Vranckx will become the third member of the Management Board of Brussels Airlines, which will collectively report to the SN Airholding Board of Directors.

US – Dale Gustafson, the last pioneer of high voltage tyre inspection who is still active in the retread industry, is hanging up his voltmeter and going fishing. Gustafson is one of the inventors of the Hawkinson NDT, the Omega-M, and all generations of the Central Marketing Spectra Tire Inspectors. He was the Chief Technical Consultant during his years partnering with the Paul E.

Hawkinson Company, and from 2002 till the present time he manufactured tyre inspectors and provided parts and service through his own company, TEI Service[11]. US – Matheson Trucking[12] has appointed Tamrya Ford as its Chief Financial Officer and Mark Olszewski as Director of Postal Operations. US – Netradyne[13], AI technology firm focusing on driver and fleet safety, has announced Dale Willis as Vice President of Data Services and Insurance.

Willis joins the company with a background in both the automotive technology and insurance industries. US – LotLinx[14], automotive AI firm has announced that Jim O’Sullivan will join the company’s Board of Directors. US – Cubic[15] has announced the appointment of Rhys Williams as Vice President, Treasurer.

US – Stertil-Koni[16] has announced that Devin Leahey has joined the company as a Warehouse Associate. US – The Grimes Companies[17] has announced that its President, Neil Porter will be retiring at the end of the month. Ike Sherlock, current Executive Vice President, will assume the role of President, effective immediately.

SOUTH KOREA – THAILAND – UPS[18] has announced the appointment of Harrison Park as Managing Director of UPS Korea, succeeding JK Rha, who retires after 28 years of service. He takes responsibility for all express delivery and logistics operations of UPS Korea in this new role. He will report to K.K.

Leung, President of North Asia District, UPS Asia Pacific. UPS Thailand has appointed Russell Reed as the Managing Director, succeeding Tan Boon Tiam. He is responsible for UPS’s small package, freight forwarding and contract logistics operations as well as for overseeing the growth of UPS’s operations in Cambodia and Myanmar.

HONG KONG – The Noble Group’s[19] Founder, Richard Elman has resigned as Non-Executive Director, the day after the supply chain manager slid into default. Elman had retained a presence in the company he founded in 1986, even as he gradually gave up his leadership responsibilities over the years. He stepped down as CEO at the end of 2009 and became non-Executive Chairman, though he struggled to hand over the reins with the group having five CEOs in seven years.

Elman eventually also stepped down as Chairman when a restructuring specialist was appointed to the role last year.

The position of Chairman Emeritus was then created for Elman.

CHINA – Best Inc[20], a smart supply chain service provider, has announced that Lin Wan has been appointed by Alibaba Group to replace Wenhong Tong as a member of the company’s board, Compensation Committee and Corporate Governance and Nominating Committee, effective since March 20.

Appointments and Departures in Shipping and Logistics Professions This WeekAppointments and Departures in Shipping and Logistics Professions This Week


  1. ^ AP Moller Maersk’s (www.maersk.com)
  2. ^ Amsterdam Airport Schiphol (www.schiphol.nl)
  3. ^ Forth Ports (www.forthports.co.uk)
  4. ^ Volga Dnepr UK (www.volga-dnepr.com)
  5. ^ UK Chamber of Shipping (www.ukchamberofshipping.com)
  6. ^ East Midlands Airport (www.eastmidlandsairport.com)
  7. ^ Shipwrecked Fishermen and Mariners’ Royal Benevolent Society (shipwreckedmariners.org.uk)
  8. ^ Whistl (www.whistl.co.uk)
  9. ^ Evac Group (evac.com)
  10. ^ Brussels Airlines (www.brusselsairlines.com)
  11. ^ TEI Service (www.teiworldwide.com)
  12. ^ Matheson Trucking (www.mathesoninc.com)
  13. ^ Netradyne (netradyne.com)
  14. ^ LotLinx (www.lotlinx.com)
  15. ^ Cubic (www.cubic.com)
  16. ^ Stertil-Koni (stertil-koni.com)
  17. ^ The Grimes Companies (www.grimescompanies.com)
  18. ^ UPS (www.ups.com)
  19. ^ The Noble Group’s (www.thisisnoble.com)
  20. ^ Best Inc (www.best-inc.com)