Lufthansa Cargo to launch API in push to innovate, cut costs

MIAMI — Air Cargo World’s first-ever ELEVATE 2016 conference kicked off in grand style here yesterday, as Monika Wiederhold, vice president of product management and innovation at Lufthansa Cargo, told the audience that successful innovators need to ignore the immediate legal and logistical hurdles, and rather concentrate on “securing the future.” During a live “Fireside Chat” interview with Air Cargo World publisher JJ Hornblass, Wiederhold explained that innovation was an important function that Lufthansa had “neglected for a while.”

To help remedy this situation, she announced that Lufthansa will introduce an application programming interface (API) that would connect all actors along the shipment chain. With the product launching in as little as 12 months, Lufthansa is leading the air cargo industry in implementing technology that has the potential to cut communication costs and pricing inaccuracies dramatically.

API technology is already prevalent in most other sectors, and the implementation by Lufthansa is sure to garner attention, and lead other carriers to follow suit, she added.

Another innovative development that Wiederhold announced at ELEVATE 2016 was the launch of a new product called MyAirCargo, which allows passengers to ship freight. And while Wiederhold noted that the product did not account for a large percentage of either total loads of revenue, it met a demand from the passenger side, although it is not restricted to passengers.

This niche product, Wiederhold explained, is representative of a new approach to cargo by the German carrier – one that makes innovation central to the company’s operations. Lufthansa Cargo, with around 4,500 employees and US$2 billion in annual revenues, is working to differentiate itself in a crowded and relatively flat market, she said.

Lufthansa is what Wiederhold termed a “legacy organization,” which, given its established position in the market, required an exceptional push to innovate, whereas innovation is in the DNA of startups and smaller, more agile companies. Nonetheless, she insisted, the drive to change was largely market driven. “The industry is becoming more and more commoditized. Either you play off commodity markets, or you differentiate,” she explained.

To this end, Lufthansa has established a separate department dedicated to innovation, while also partnering with RocketSpace, a startup accelerator that has pushed new companies into the aviation sector with great success.