Interview with Mr. Carsten Hernig

Mr. Carsten Hernig
Regional Director (South Asia, Middle East & Pakistan)
Lufthansa Cargo

The entire industry– together with the authorities – must work consistently towards real expansion of eFreight.

Founded in 1926, Deutsche Lufthansa AG, in the first year of its existence had capacity of transporting as much as 258 tons of cargo. Today, Lufthansa Cargo ranks among the world’s leading cargo carriers. In the financial year 2010, the airline transported around 1.8 million tons of freight and mail, and logged 8.9 billion revenue ton-kilometres. The Company currently employs about 4,500 people, worldwide. Lufthansa Cargo focuses on the airport-to-airport business. The cargo carrier serves some 300 destinations in more than 100 countries in a dense network spanning the globe. Apart from operating its own freighter aircraft, it utilizes the belly space on passenger aircraft operated by Lufthansa and Austrian Airlines as well as the capacities available in an extensive road-feeder service network. The existing route network in the Asia/Pacific region is augmented by an intermodal AirShip Service to Australia. Based in Delhi, Mr. Carsten Hernig, since March 2008, is the Regional Director (South Asia, Middle East & Pakistan) at Lufthansa Cargo. He has studied in Frankfurt as well as in Lyon, France, and joined Lufthansa Cargo in 1998 in Singapore as the Manager for Sales Steering and Capacity Planning for entire Asia-Pacific region. In 2003, he moved to Moscow as the Regional Director - Sales, Russia & CIS. Four years later, he was appointed as Regional Manager - South China, Hong Kong and Taiwan, based in Hong Kong. In his spare time, Mr. Hernig enjoys playing football. He is also fond of reading and traveling. In Face2Face talk with Ms. Madhu Soni- Sr. Editor & Correspondent, Mr. Carsten Hernig, along with growth status in textile and apparel industry vis-à-vis air cargo, also delves out about the challenging areas and key to success.

Mr. Hernig, while thanking you for joining us for a talk, let me request your views on the textile-apparel industry’s growth worldwide. Which geographical region is the principal driver of textile-apparel cargo growth?

The fashion industry is one of the key customer groups in airfreight. Due to the modern demand-driven supply-chain management systems of the retailers, the time-to-market is constantly shrinking. In consequence, airfreight has to be in a position to react quickly to fashion trends. The main garment production countries are located in Asia. China is – despite a reverse trend – still a major producer. The same applies to India. At the same time, a shift in production to other countries, such as Bangladesh, Indonesia, Vietnam and Cambodia, can be observed and textile production is growing in Turkey as well. For us as a carrier, that means that we have to keep close track of these developments in order to be able to meet the customer needs. The recent commencement of our freighter operation in Dhaka, Bangladesh, is a good example.

Well on that note about regional growth, important point also to consider here is faltering Economy in the USA-the established market. Do you see any consequent pitfalls for the air cargo industry thereby?

Developments in the Americas have been very positive over the recent months. In fact, we have seen the highest growth rates on our transatlantic services. One of the strengths of Lufthansa Cargo is the carrier’s dense and global network. We are serving some 100 countries, worldwide, and have a strong presence in all major cargo markets. Therefore, we do not rely on any single market and are able to switch capacities quickly, as needs dictate.

What else do you consider to be the major challenges that industry is facing currently?

The volatility in our industry remains a real challenge. Markets and demand are changing quicker than ever before. For us, as an airline, that means that we have to be fast and flexible. The opening of new stations or fast adaptation of capacities is a key success factor. The second challenge is the increasingly demanding security environment. With investments in equipment, resources and programs, we are striving for the highest possible security along with the most efficient processes in order to benefit our customers. However, that also means that the annual costs for security are today ten times higher than in 2001. The third notable challenge is the digitalization of the entire document flow in our industry. We are still far away from paperless e-processes. The entire industry must – together with the authorities – work consistently towards real expansion of eFreight.

‘Time-definite - a promise is a promise!’ what philosophy lies behind this driving tenet of your Group? How is it epitomized in your offerings?

With td.Services, our customers can optimize their logistics chain according to individual requirements. td. stands for time definite and it means that a customer’s freight and all necessary documents are available for pick-up at the destination station at the promised time. This is possible by using flight-specific "time frames", which include all handling, transport and transit processes and are based on the fastest connection between export and import station. With this approach, our customers are saved from complex route planning and complicated calculations.

Cargo theft is a huge problem and it is an increasing problem over time, what say?

Theft used to be a huge problem a decade ago but is no longer an issue. We have invested substantially in security, for instance by equipping our warehouse with a sophisticated camera surveillance system, strict access controls and specially trained security staff. We also offer two products especially for valuable cargo that is transported under the strictest security conditions, Safe/td1 and Safe/td2.

That amplifies technology's vital role in the sector. Is it the key to a sustainable future too?

Absolutely! Although we work on various fields within our environmental strategy, technology development is a key pillar. New and efficient aircraft reduce noise and CO2 emissions significantly. The Boeing 777F, which Lufthansa Cargo ordered in March is by far the most cost-efficient and ecological aircraft.

Seems M&A has always been your Company’s mainstay growth strategy. While we conclude the talk here, is there any announcement that you may wish to make in that context?

The Lufthansa Cargo Group consists of several companies. They include the freight divisions of the airlines within the Lufthansa Group such as SWISS or SN Brussels. We also have different forms of cooperation – for instance, we integrated the cargo capacities of Austrian Airlines into our network a year ago. That is accompanied by growth in our own freighter capacity. Earlier this year to underpin our growth strategy, we placed orders for five brand-new Boeing 777 freighters, which are scheduled for delivery between 2013 and 2015.

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Published on: 10/10/2011

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.