Lufthansa Cargo
Accelerating Digital Amid COVID -19
IN ASSOCIATION WITH
DIGITAL REPORT 2020
Lufthansa Cargo: Accelerating Digital Amid COVID -19 02
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Jochen Göttelmann, Chief Information Officer, and Boris Hueske, Head of Digital Transformation at Lufthansa Cargo, discuss the rise of digital in air freight
L
ufthansa is one of the world’s most renowned airlines. With hubs in Frankfurt and Munich, the organisa-
tion is committed to operating one of the most technologically-advanced and fuel-efficient fleets 04
globally. Its division, Lufthansa Cargo, is a leader in air freight and serves 300 destinations across over 100 countries. Jochen Göttelmann is the Chief Information Officer at Lufthansa Cargo. Over the past 18 months, Lufthansa has refreshed its existing infrastructure and applications significantly. “We’ve defined a clear data centre strategy and it will mean that every new project and application will be cloud native,” says Göttelmann. “The cloud strategy came just in time for the coronavirus pandemic. We could seamlessly make our staff work from home with our cloud-based collaboration and communication platforms. On the business side our main focus remains on the modernisation of our sales applications and the implementation
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Your partner for air cargo logistics 4.0
Air freight is a key driver of the German economy, especially in times of crisis. As an IT service provider, Lufthansa Industry Solutions is using its technical expertise combined with industry know-how to play a key part in shaping the digital transformation in the air cargo industry. We asked Rainer Liebhart, Vice President Air Cargo Logistics, what challenges the industry must now face.
Mr. Liebhart, the airline industry is particularly affected by the Corona pandemic. What is the current situation with air freight? Rainer Liebhart: Until now, the Corona crisis has affected passenger traffic far more than air freight in Germany. The present shortage of belly capacity in passenger aircraft is currently leading to capacity bottlenecks across the market, resulting in a temporary increase in cargo rates. Having said that, the air cargo business is highly dependent on the global economy. It is precisely these prospects that are an indication of some difficult years ahead for air freight. Will the crisis give new impetus to digitization in air freight? Liebhart: I would speak less of a new impetus and more of a different one – a higher speed. More than anything else, the crisis has demonstrated just how much easier digitization makes arriving at better and thus more controlled and conscious decisions, including in extreme situations. In particular, the digital services offered and the interaction at the customer interface will be a key differentiating factor on the market and thus significantly influence success. What do air cargo customers need to do now to be prepared for the future? Liebhart: It is now a case of increasing the speed of digitization in the relevant
disciplines substantially. One especially decisive factor will be who can offer a good product on the market and to customers that is easy to understand and, most importantly, easy to book. The booking platforms we are all familiar with from the consumer sectors are also gaining ground in the cargo business. And it is precisely here that you must stand out from the competition with a market-driven price, a simple process and value-added digital services. It will be important to know and better understand your customers, the market, and the competition. Smart algorithms will allow you to predict behavior accurately and respond to it automatically. What can Lufthansa Industry Solutions do to help its customers achieve this?
How innovative is the aviation industry and what projects are pioneering?
Liebhart: It’s varied. We focus our efforts on both disciplines for our customers: cutting costs and increasing revenue opportunities. Regarding costs, we help through the deployment and operation of our DevOps platform for example, which is available for our customers to use. Additionally, the combination of our industry and technical expertise allows us to help our customers not only obtain the right data, but also draw the right conclusions from it and implement it technologically in automated systems. Our experience in designing and implementing customer interfaces and background systems allows us to save customers a lot of time, resulting in speed advantages.
Liebhart: In terms of innovation, the industry is not as bad as it is often portrayed. However, we must not forget that the industry is subject to a great deal of regulation, meaning a lengthy decision-making and approval process awaits many innovative projects. But I am convinced that the speed is increasing despite the tense economic situation, especially in the case of those projects that contribute greatly to the company’s business. Despite the difficult overall situation, I am pleased to be able to carry out projects with my customers at such an exciting time, projects that will help to change logistics lastingly and make it even better than it already is in many respects.
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of new digital services to our clients.” At the end of last year, the firm introduced a new dynamic pricing and has recently launched a smart booking API to increase the connectivity to their partner and customer network. The next big milestone will be a completely refreshed client-facing booking frontend in November. Göttelmann is also helping to renovate the internal sales system like CRM and the pricing tools. “It’s clear our current priority lies with the sales side, however, we continue 08
to invest in our other domains too. In handling, we got rid of our legacy host application already some years ago, and now have a state-of-theart IT platform which is the base for customer oriented process innovations like eFreight, targeting for 100% paperless document flows, or selfservice terminals to reduce waiting time for the truckers. In addition, a completely new production planning system is introduced for the internal capacity planning, steering and monitoring in our Frankfurt freight hub. And last but not least, we have migrated our analytics environment to the cloud and will also modernise our traditional
“ We want to drive digitalisation in the air freight industry to offer our customers better, faster and more convenient services” — Boris Hueske, Head of Digital Transformation, Lufthansa Cargo
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09 BI and data warehouse over the next
services,” he says. “We’ve been quite
years to better support data-driven
busy over the past one and half years
decisions. We still invest lots in IT and
but the global situation is very differ-
plan to continue that as we move for-
ent now. Although we already had
ward as well.”
some good solutions in place prior to
Boris Hueske, Head of Digital
COVID-19, we extended our services
Transformation, states that the
on digitised processes. For example
impact of digitalisation accelerates
the high share of electronic docu-
the change happening in the logistics
ments we receive in the meantime
and transportation industry. This also
allows us to pre-check the information
requires the right perspective on IT
provided by the customer on a ship-
and data as a production factor. “We
ment and give feedback upfront on
want to drive digitalisation in the air
completeness and correctness which
freight industry to offer our customers
makes the freight delivery at the air-
better, faster and more convenient
port much easier and faster.” l uf t ha nsa - c a r g o. com
A Partner in Pricing PROS is an important partner in our digital transformation. With PROS real-time pricing solutions, we’ve revamped how we provide services to customers while giving our internal teams the tools they need to work with greater speed and efficiency.�
Lars Mueller L U F T HA NS A C A R G O Director of Pricing
pros.com
info@pros.com
Learn more about the PROS solutions that are transforming businesses now.
“ COVID-19 has sped up a number of initiatives to drive automation and support new working models in a bid to connect our clients and partners” — Jochen Göttelmann, Chief Information Officer, Lufthansa Cargo
“We’ve accelerated the rollout of our new pricing services, for dynamic prices, the spot quotations. The automated price calculation is based on analytics available for our customers 24/7 which makes it easier to get an offer. We improved our API services for our customers which allows direct bookings by customer interfaces through the API into our system. The tracking services through the API are improved and provide an automated update if there’s a change in the shipment status. We’ve had a full set of improvements during the
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LUFTHANSA CARGO
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1994
Year founded
$2.5bn+ Revenue in US dollars
past 18 months based on digitalised processes, the improved IT infrastructure and new technology focusing on customer-driven services.” Hueske adds that he believes that logistics still has work to do to catch up with other industries that are further along on their digital transformation journeys. “Compared to other sectors logistics is a little behind the
4,500 Number of employees
digitalisation development but also in logistics digitalization accelerates and was massively accelerated by the COVID19 crisis,” he explains. “The industry still has papers left in the processes that accompany shipments
and is still working on modernising
at Lufthansa. “It’s clear that COVID-19
backend IT systems. One topic we are
has a severe impact on our invest-
working on is to further digitalise the
ment capabilities as an airline group.
booking process of further services
But it has sped up a number of initia-
that couldn’t be booked through
tives to drive automation and support
online services yet. It’s really about
new working models in a bid to con-
driving the digital processes forward
nect our clients and partners,” adds
for our customers. Our core pro-
Göttelmann. “I believe that some of our
cesses shall become digital, real
projects have even accelerated over
time and convenient.”
the past few months as a result of the
Göttelmann believes the coronavi-
crisis. IT always has a cost component,
rus has actually acted as a catalyst for
but is also a strong enabler to make
the acceleration of digital initiatives
a business run more efficient and to 13
E X E C U T I V E P R O FILE :
Jochen Göttelmann Title: CIO
Company: Lufthansa Cargo
Industry: Air Freight
Location: Frankfurt
After studies and a PhD in mathematics, physics, computer sciences and economics Jochen Göttelmann started his professional career as software developer at Dresdner Kleinwort Benson. After several IT positions in reinsurance and IT consulting he spent 12 years at Allianz Global Investors before he joined Lufthansa Cargo as CIO in 2015. He always worked in IT with a high business focus, dedicated to apply technology to enable business and drive digitalisation.
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“ It’s now more important than ever before to determine what is adding value to the company and what no longer serves us” — Jochen Göttelmann, Chief Information Officer, Lufthansa Cargo
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Microsoft enables digitalization in logistics for resilient, intelligent supply chains Learn more
drive costs down through automation
our portal or APIs. We’re seeing a
and digitalisation.”
large trend in online booking because
“It’s all about information and trans-
it is the most accurate information
parency,” adds Hueske. “It’s important
available and the customer is in need
to provide customers with as much
of this information at the moment.
information as early as possible,
We’ve been lucky that we’ve been pro-
whether that’s about the capacity
active enough in the past to develop
available or shipment status. But, this
solutions and we’ve got some good
is centered around the availability of
services in place for our customers
data and the right interfaces through
and accelerate that rollout.”
E X E C U T I V E P R O FILE :
Boris Hueske
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Title: Head of Digital Transformation Company: Lufthansa Cargo Industry: Air Freight
Location: Frankfurt
Boris Hueske has a degree in business administration of the Philipps University Marburg with a focus on logistics and finance. Within 20 years of industry experience in logistics, transportation and airfreight he took over management positions at DB Cargo, Lufthansa Cargo, XPL and Aerologic in the fields of supply chain management, sales, strategy, JV management, finance, revenue management and digitalistion. Since 2018 he is responsible for defining and achieving the Digital Transformation approach of Lufthansa Cargo with activities in automation, new digital services and digital business models.
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PA R T N E R M E N T I O N S
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Lufthansa Industry Solutions: The internal company with a strong cross-industry expertise is one of the most important partners for Lufthansa Cargo’s digital transformation mainly in the business domains Sales, Analytics and Revenue Accounting. As an IT service provider they combine technical know-how with process and industry knowledge and entrepreneurial thinking. PROS: Lufthansa Group has had a longstanding, strategic partnership with PROS for its deep expertise in pricing and revenue management, and more recently, quoting that powers Lufthansa Cargo’s booking and pricing platform. PROS has established itself as a strategic SaaS partner for Lufthansa Cargo’s digital
transformation by powering accelerated quoting, delivering real-time pricing, modernizing the customer experience, and eliminating revenue leakage through consistent, disciplined pricing management. Microsoft: Microsoft enables Lufthansa Cargo’s digital transformation substantially as supplier for cloud services. Since we started the cloud transformation, all new software products are designed cloud-native on the Microsoft Azure PaaS and IaaS layers. Also our new CRM system is based on Microsoft Dynamics. Microsoft Teams has been introduced Lufthansa Group-wide already in 2019, enabling seamless communication and collaboration throughout the whole crisis.
“Compared to other sectors logistics is a little behind the digitalisation development, but this has been massively accelerated by the COVID-19 crisis” — Boris Hueske, Head of Digital Transformation, Lufthansa Cargo Hueske recognises that the global
With the future in mind, Göttelmann
situation has been difficult to navigate,
adds that focusing on what is actually
particularly for airlines, however, he
generating value is essential moving
stresses it is why it’s key to gain ground
forward. “From an IT side, it’s all about
on harnessing efficiency in digitalisa-
continuing to modernise the landscape
tion. “It’s a very unique situation in air
to enable the digital transformation,”
freight and for airlines at the moment,”
says Göttelmann. “It’s now more impor-
he explains. “COVID-19 has majorly
tant than ever before to determine
impacted the industry and we have
what is adding value to the company
to consider that in the future too. We
and what no longer serves us. That’s
had significant reduction in capacity
the challenge for us; we need to revise
in our markets on the passenger side,
our service portfolio. We also have to
with almost 50% of the capacity being
ensure we’re flexible and enable our
provided through passenger aircraft.
planning and governance processes to
We don’t know how fast this will change
be faster and more agile.”
either. However, it shows the importance of data insights and analytics. We confirm our goal to have greater data insights and leverage data in the best way to improve services and transparency for our customers.” l uf t ha nsa - c a r g o. com
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