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)

DHL Hong Kong acquires four cargo scanners as e-commerce volumes surge

Freight security screening specialist Smiths Detection[1] has won a contract to supply DHL Express (Hong Kong) with four HI-SCAN 10080 EDX-2is[2] units to achieve “greater throughput capacity and increased security levels” as the rise in e-commerce volumes continues. The high-speed system automatically screens cargo and baggage for explosives, offering “one of the highest detection rates in its class,” said Smiths in a statement. This contract follows the earlier implementation of the system in DHL Singapore and Japan.

The statement coninued: “The international e-commerce sector continues to enjoy exponential growth. In Asia alone, the online retail market is set to reach £1.2 trillion by 2021, with Hong Kong identified as an ideal base for e-commerce providers to expand in the wider Asia region. “Detection and security systems that can help increase the shipment inspection speed and throughput capacity play a crucial role for international delivery service providers.”

The 10080 EDX-2is[3] system uses automatic image evaluation and X-ray generator and sensor technology and is able to screen up to 1,800 bags per hour. Automation of the primary inspection process offers the added benefits of reducing manpower and recurring costs. The systems will also be integrated with Automated Material Handling Systems (MHS) for air cargo screening.

Said Jerome de Chassey, Vice President, Asia-Pacific Region, Smiths Detection: “With the HI-SCAN 10080 EDX-2is, DHL Express will be able to speed up the inspection process and more than double its throughput rates.

Together with our unparalleled automated explosive detection system, we are confident that we can help DHL Express deliver the security and peace of mind that their customers deserve.”

Smiths Detection has more than 75,000 X-ray systems in more than 180 countries and over 24,500 explosive trace (ETDs) detectors installed worldwide.


  1. ^ Smiths Detection (email.prnewswire.com)
  2. ^ HI-SCAN 10080 EDX-2is (email.prnewswire.com)
  3. ^ 10080 EDX-2is (email.prnewswire.com)

1 2 3 149