Lufthansa Cargo Research Paper

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Air Cargo Management

Lufthansa Cargo

Lufthansa Cargo is a cargo airline company that is based in Germany. The company provides airline cargo, air freight, and logistic services. Lufthansa transports cargo and mail from airport-airport. Lufthansa is the largest airline in Germany and is amongst the leading airlines in the world. The company is headquartered at the Frankfurt Airport in building 451. Lufthansa Cargo has access to other cargo capacities in their Lufthansa passenger aircrafts. This is in addition to its own cargo freighters. Organizing its cargo business in a different airline entity has allowed the company (Lufthansa) to differentiate itself from other major competitors like Air France and British Airways. Lufthansa Cargo was the leading cargo in the recent past in terms of their international freight tonne-kilometers, but the company has been overtaken by Korean Air Cargo and Cathay Pacific Zhang & Zhang, 2002()

Cargo management is different from passenger business as cargo shippers do not book round trips. Cargo is classified according to weight, volume, and perishability. These dimensions make cargo management tricky for any airline. The airline must have different cargo pallets that can accommodate the different needs of the customer's cargo Hellermann, 2006.

Lufthansa Cargo has different products that would cater for the needs of its customers. Cargo has to be delivered within an agreed time and without any delays. This makes it vital for the airline to plan well and understand the requirements for each cargo. Managing of cargo is beneficial to the airline as it is able to plan in advance and compete with other rivals. Capacity allocation is necessary for Lufthansa Cargo. This provides the company with some degree of freedom on how it can place it cargo on its airlines. Cargo that needs same day delivery is normally allocated space in passenger carriers. This makes it easy for the company to meet the needs of the customer while reducing its operational costs.

Products

Lufthansa Cargo has standardized products that cater for the three global airfreight market segments. Lufthansa Cargo has divided its product categories based on the requirements of the customer and nature of the cargo. They have the standard category, express category, and special category Lufthansa Cargo, 2013.

The standard category caters for standard freight at an economical rate. The standard freight does not regard weight and size in its pricing. The express category caters for time conscious cargo. Any cargo that needs to be delivered within a short time is handled in this category. The company offers additional services like shipment supervision on the ground. The specials category caters for temperature sensitive cargo, live animal cargo, and safe cargo transportation. The company also offers freight charges reimbursement if it fails to deliver the cargo on time. Managing and maintaining these standards is vital for Lufthansa Cargo as it ensures that cargo is delivered on time. The costs the company would incur in case it failed to deliver the cargo at the agreed time would affect the company's overall profits. This demands that the company handle all its cargo according to the requirements of the customer and time frames. Lufthansa Cargo has facilities that can handle perishable goods, live animals, and fragile products. The perishable goods are stored in cool containers and the containers can fit any type of cargo specifications. Having such containers increases the company's business and it also improves its cargo management. Using technology the company has been able to deliver value to its customers. Providing guarantees on delivery of cargo allows the company to gain the confidence of its customers. This goes a long a way as it encourages the customers to provide the company with repeat business. The company is able to reduce its operating costs by always providing outstanding customer satisfaction. The perishable goods are stored and transported as per the customer's instructions. Having refrigerated containers has enabled the company to handle perishable goods and the temperature of the containers is always set as per the customer's requirements.

Lufthansa Cargo is able to transport cargo using the passenger airline Lufthansa. This allows the company the flexibility of transporting time conscious cargo cheaply. The company relies on Lufthansa passenger carriers for transportation of some of its cargo instead of waiting to fill up its aircrafts in order to transport the cargo. This allows the company to reduce its storage space and have cargo routed to its destination speedily. The management of load in order to balance the aircraft is vital. The shipments could be mixed with others in order to ensure that weight is balanced properly.

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Mixing of shipments allows the company to sell the same space twice. A customer with a heavy weight and high density goods can have his/her goods combined with those of a customer with voluminous goods. This enables the company to maximize on its space usage, while reducing its overall costs. The shipments that are combined are done after their contents have been established. Not all shipments can be combined. This is because some shipments are sensitive, or they might be affected by other shipments if stored in close proximity.

According to Zhang (2003)

the two major factors that shippers consider when using air freight are low damage rates and speedy delivery. These factors determine the reliability of an airline cargo operator. Lufthansa Cargo has endeavored to deliver all its cargo without damage. The company has put measures in place that ensure that all cargo is delivered to its destination in the same condition it was received. There are sensitive cargos that require the aircraft to take off and land at a lower than normal angle. These conditions should be addressed, and the pilots advised accordingly. With the guarantee that the company provides in the delivery of its cargo, it goes to lengths to ensure that it delivers the cargo in good condition. Failure to deliver as specified would result in losses to the company, which would not only affect its profits, but also its reputation.

Customer service

Customer service is key in the management of cargo. Any activity that the company conducts in order to enhance the customer's satisfaction after shipment is delivered for transportation is termed customer service. Lufthansa Cargo has a variety of activities that it conducts in order to enhance the customer's satisfaction. Lufthansa Cargo has established an online tracking system that allows a customer to track their cargo at any given time. This improves the company's customer service and provides the customer with a means to check on the status of their cargo Forster & Regan, 2001.

This is helpful for sensitive and special cargo shipments. The company offers a realtime tracking, which enables a customer to track their important shipment at any time. Realtime tracking provides customers with logistic information regarding their shipment from the time the shipment leaves the customer's premises. Using such technology, the company allows a customer to keep up-to-date with where their shipment is exactly. Realtime tracking is available to all product categories. This makes it easy for a customer to manage their cargo. The company benefits in the management of cargo as it knows that the customer is tracking, and it has to deliver the cargo as specified. Technology has lessened the burden on the company since using technology the company can also track any cargo Gardiner, Ison, & Humphreys, 2005.

This makes it easy for the management of air cargo. Tracking also ensures that cargo is routed to its destination as quickly as possible.

To receive repeat business, the company has to ensure that it satisfies each of its customers. This way the customer will feel valued, and they are more likely to prefer shipping their cargo using the company. The air freight business is facing stiff competition, and the company has to leverage its customer service activities in order to remain competitive. Lufthansa Cargo also provides an eFreight service, which allows customers to fill out the required documents online. This reduces the amount of paperwork the company has to process manually. Having an online booking system for cargo also benefits the company as it is able to process cargo much faster and reduce any unnecessary delays. Digitizing the supply chain ensures that managers can track the progress of bookings and cargo delivery easily. Digital records also make it easy to process cargo and ensure that cargo is booked into an aircraft as quickly as possible. Planning is made easy when records are computerized. This is because the company can easily determine where a cargo is destined for and plan for its delivery either using its cargo freights or passenger airline. Having a paperless system has increased the volumes the company handles by almost 40%. This indicates that the company is benefitting and is able to handle more traffic in a paperless system.

Cargo management benefits from a paperless system as there is a reduction in errors. Double entry errors are completely eliminated, which makes it easy to plan for cargo deliveries and reduce wastage of space. The cargo booked….....

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