This paper examines the air cargo management practices of Lufthansa Cargo, one of Germany's leading freight airlines. It covers the company's three product categories — standard, express, and specials — and explains how capacity allocation, shipment mixing, and access to Lufthansa's passenger fleet enable cost-efficient operations. The paper also discusses how technology, including real-time tracking and a paperless eFreight system, enhances customer service and reduces operational errors. Together, these strategies illustrate how Lufthansa Cargo differentiates itself from competitors such as Korean Air Cargo and Cathay Pacific while maintaining reliability and expanding cargo volumes.
Lufthansa Cargo is a cargo airline based in Germany that provides air cargo, air freight, and logistics services. The company transports cargo and mail on an airport-to-airport basis and is the largest airline in Germany, ranking among the leading airlines in the world. Its headquarters are located at Frankfurt Airport in building 451. Lufthansa Cargo has access to additional cargo capacity through Lufthansa's passenger aircraft fleet, supplementing its own dedicated cargo freighters. Organizing its cargo business as a separate airline entity has allowed Lufthansa to differentiate itself from major competitors such as Air France and British Airways. Lufthansa Cargo was once the leading cargo carrier in terms of international freight tonne-kilometers; however, it has since been overtaken by Korean Air Cargo and Cathay Pacific (Zhang & Zhang, 2002).
Cargo management differs fundamentally from the passenger business because cargo shippers do not book round trips. Cargo is classified according to weight, volume, and perishability — dimensions that make cargo management particularly complex for any airline. The airline must maintain different cargo pallets capable of accommodating the varying needs of each customer's cargo (Hellermann, 2006).
Lufthansa Cargo offers a range of products designed to meet its customers' needs. Cargo must be delivered within an agreed timeframe and without delays, making careful planning and a thorough understanding of each shipment's requirements essential. Effective cargo management enables the airline to plan in advance and compete with rivals. Capacity allocation is a key element of this strategy, giving the company flexibility in how it places cargo across its fleet. Cargo requiring same-day delivery is typically allocated space in passenger carriers, allowing the company to meet customer needs while reducing operational costs.
Lufthansa Cargo has developed standardized products that address the three global airfreight market segments. The company divides its product categories based on customer requirements and the nature of the cargo, offering a standard category, an express category, and a specials category (Lufthansa Cargo, 2013).
The standard category caters for general freight at an economical rate, without regard to weight or size in its pricing. The express category is designed for time-sensitive cargo that must be delivered within a short window; the company provides additional services such as ground-level shipment supervision for these shipments. The specials category covers temperature-sensitive cargo, live animals, and cargo requiring secure transportation. The company also offers freight charge reimbursement if it fails to deliver cargo on time.
Maintaining these standards is vital for Lufthansa Cargo because failure to deliver on schedule would affect both profits and reputation. This demands that the company handle all cargo in accordance with customer requirements and agreed timeframes. Lufthansa Cargo has facilities capable of handling perishable goods, live animals, and fragile products. Perishable goods are stored in refrigerated containers that can be configured to any cargo specification, and the temperature is always set according to the customer's instructions. Having such specialized containers expands the company's business opportunities and strengthens its cargo management capabilities.
By leveraging technology, the company has been able to deliver greater value to its customers. Offering delivery guarantees builds customer confidence and encourages repeat business. Consistently high customer satisfaction also helps the company reduce operating costs over time.
Lufthansa Cargo is able to transport cargo using the Lufthansa passenger fleet, which provides the flexibility to move time-sensitive cargo at a lower cost. Rather than waiting to fill its own freighters before dispatching cargo, the company routes shipments through passenger carriers, reducing storage requirements and accelerating delivery. Proper load management to balance the aircraft is essential in this process.
Shipments may be combined with others to ensure that weight is balanced correctly. Mixing shipments also allows the company to sell the same cargo space twice: a customer with heavy, high-density goods can have their shipment consolidated with that of a customer carrying voluminous but lighter goods. This maximizes space utilization while reducing overall costs. Combined shipments are only arranged after the contents of each have been verified, since not all cargo is compatible — some shipments are sensitive or could be adversely affected by proximity to others.
According to Zhang (2003), the two major factors that shippers consider when choosing air freight are low damage rates and speedy delivery. These factors determine the perceived reliability of an air cargo operator. Lufthansa Cargo has put measures in place to ensure that all cargo arrives at its destination in the same condition in which it was received. Where cargo requires the aircraft to take off and land at a shallower angle than normal, these conditions are communicated to the flight crew. Given the company's delivery guarantees, any failure to deliver cargo in the agreed condition would result in financial losses and reputational damage.
"Load balancing, shipment mixing, and fleet flexibility"
"Real-time tracking, eFreight, and paperless operations"
Zhang, A. (2003). Analysis of an international air-cargo hub: The case of Hong Kong. Journal of Air Transport Management, 9(2), 123–138.
Zhang, A., & Zhang, Y. (2002). Issues on liberalization of air cargo services in international aviation. Journal of Air Transport Management, 8(5), 275–287.
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