Lufthansa Cargo: We want to collect e-AWBs, not fees

20 / 03 / 2018

Lufthansa Cargo’s introduction of a fee for paper-based air waybills (AWB) is a surcharge that the German carrier does not want to collect.

“We don't want to make money on this, we don't want to collect this fee. We want to collect e-AWBs,” said Dr Alexis von Hoensbroech, Lufthansa Cargo member of the executive board and chief commercial officer.

Lufthansa Cargo is introducing the fee, €1 from April but rising to €12 from October 2018, to cover the cost of inputting data manually from a paper AWB, but primarily to promote the use electronic air waybills (e-AWB) which currently averages 50% worldwide, according to IATA.

Added von Hoensbroech: “It is now eight years since the e-AWB was introduced and its use has grown at an incredibly slow pace and we have seen that many parties in the industry are pretty reluctant to make the necessary adjustments to issue e-AWBs.

“We thought that now is time to take a different approach because if somebody delivers a paper air waybill it means we have to capture the data manually and thatis a significant cost.”

Lufthansa Cargo said that it wants to give the freight forwarders “sufficient lead time” so that they can make the necessary adjustments in order to obtain a much higher share of e-AWB usage.

Lufthansa Cargo currently processes 1.5m AWBs per year, of which half are submitted electronically. Von Hoensbroech said that some trade lanes are closer to 90% in terms of e-AWB penetration.

So why introduce the fee unilaterally, possibly providing an incentive for freight forwarders to switch their business to other carriers who do not impose a fee for paper AWBs?

Said von Hoensbroech: “This is a pricing issue and I want to make it very clear that we did not discuss this with competitors, neither with IATA nor any other organisations.

“We have introduced this fee because the momentum for providing e-AWBs is still too slow and we need to do something that accelerates the whole process. It is a unilateral step, but it's a step that we think is really necessary to get something moving towards a much higher usage of e-AWBs.

“We believe that without a clear financial implication, the industry will not get to the levels of e-AWB that this industry needs.”

He continued: “Someone has to do it and Lufthansa Cargo has always been innovative and has always been a company trying to drive change in the industry. This is just another situation where we are taking the lead.”

Lufthansa Cargo is realistic about the ambition of reaching 100% e-AWB penetration: “We know that some freight forwarders will not do it. We have already introduced it in South America and we saw that many forwarders used it to kick-start to move towards e-AWBs.

“But we also saw, especially from small freight forwarders, that they would say  ‘okay, fine Lufthansa, now you are charging for a service and now I see this as a service and I'm happy to pay €12 but then leave me alone, stop hassling me that I should go to e-AWBs'.

“There will be a certain number of forwarders who will just take the charge because it is cheaper for them than investing in technology for submitting e-AWBs.”

It is estimated that the average value of an AWB is about $1,000 and so €12 on top of that is less of an incentive for smaller freight forwarders with fewer declarations.

The feedback from the industry has "not been so bad," said von Hoensbroech, adding: “No customers have stood up and said you should not do this. The majority says that it is the right thing to do. Of course, not all of them like to be charged another fee, but they all know that this is necessary and that if we want the industry to move towards more digitisation then such a step is necessary.”

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