Lufthansa Cargo is looking for commitment
Starting in autumn 2001, Lufthansa Cargo is planning to strengthen its business ties with freight forwarders and shippers through longterm contracts designed to obtain clear commitments from the latter and to get them to share at least part of the risk inherent in the airfreight business.
From October. the air cargo specialist will offer its customers the option of making a twelve month commitment. The long-term and non-returnable use of a set amount of cargo space capacity at fixed prices (Commitment) will be a key feature of these contracts.
<<These long-term, binding capacity accords will place our own and our customers’ advance planning on a more stable basis,” explained Andreas Otto, executive board member for marketing and sales at Lufthansa Cargo. “Together with our
partners. we will share the entrepreneurial responsibility for the cyclical nature of the airfreight business.>>
Rate increases
Lufthansa Cargo is increasing its standard prices come October 1. Standard rates from the airline’s domestic market Germany to all destinations worldwide will rise by 10%. For customers who sign up for a six month contract with Lufthansa Cargo and make a commitment to take a certain capacity (Guaranteed Capacity Agreements), rates will increase on average by only 5% cx Germany. For customers prepared to enter long-term contracts of at least twelve months duration (Capacity Pur( h ase Agreements), prices will basically he frozen at present levels. Lufthansa Cargo will thus reward customers who conclude long-term con-
tracts with what are in effect attractive discounts.
A higher surcharge on express services will be levied from October. For the td. Flash express service, the surcharge will rise by EUR 0.10 per kilogram. On the td.X express service for large and heavy shipments, the surcharge will increase by EUR 0.15 per kilo. The ex Germany surcharge will rise selectively on the special Care/td. Cool/td, FresWtd and Safe/td2 customised products.
In Europe. standard rates to all destinations worldwide will go up by 6%. For forwarders signing a sixmonth guaranteed capacity agreement, the rates increase will average 3%. There will be no change in basic rates in Europe for customers entering into longer term capacity purchase agreements of twelve months or more.
In Asia and the USA. the post-October price increases will vary from product to product depending on the market situation.
With these price realignments. Lufthansa Cargo is aiming to compensate for declining yields in the past few nionths as well as rising costs incurred by increased take-off, landing and other airport charges.
<> said Otto. “Alongside our lead in the time-definite business, we intend to become innovation leader on the pricing front.>>
