question of the month


Cost-cutting is a terminology used a lot in the air freight business, but does this attitude to tightening the purse strings lead to service quality being reduced?


HELGE KRUEGER-LORENZEN


Vice president Asia Pacific, Lufthansa Cargo


“No company in our industry can survivewithout cost discipline. “Cost-saving has become a


fact of life – a daily routine like brushing teeth on waking up. “But there are limits for


Lufthansa Cargo:we do not save at the customer's expense, nor on product or service.We knowthat only superior qualitywill enable us to growand remain first choice. “However, cost savings


JOHN BATTEN


Executive vice president cargo services, Swissport International


may also lead to direct customer benefits.New technologies provide a good example: paperless e-Freight saves time and costs, and improves process quality at the same time. “On top of that,we reduce environmental side-


“No company in our industry can survive without cost discipline. Cost-saving has become a fact of life.”


effects. It is awin-win situation of the sortwe pursue – providing customerswith the highest quality at competitive cost."


“In a controlled environment, andwith all parties (freight forwarder, airline and cargo handler) contributing in the logistics chain, cost-cutting should not affect service quality. The processes involved during the handling phase can be streamlined to reduce service failures, the use of electronic platforms should be implemented whereby all parties, including Customs, are able to communicate and share information. “Although this


electronic communication already exists, it is not always used to its full benefit.With this tool and the co-operation of all parties, cost-cutting can be implementedwithout impacting on service. “Nowthere are otherways for the carriers to allowus


“The focus needs to be on processes and the reduction of waste.”


to keep their costs down, such as allowing the handler tomanage their facilities, allowing us to bring in additional revenue and offsetting their fixed and actual unit costs for handling. “We talk to our customers and have roundtable


meetingswith forwarderswhich help us to find out other potential savings, for example by steering cargo towards low-demand hours in ourwarehouses or increased use of electronic data transfers and implementation of e-Freight. “The focus needs to be on processes and the


reduction ofwaste, the re-engineering of processes and using tools to improve flows. In addition, using methodologies that always keep the concept of customer value at the fore ... if used properly the outcome should be service improvement aswell as cost reduction. “We recognise the need for lowcosts but not at the


expense of servicewhich iswhywe are improving technology, adapting processes and implementing change to deliver excellent service and exceptional quality for less.”


AIR LOGISTICSCHINA 39


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