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Leisure Cargo

We interviewed Thilo Schaefer of Leisure Cargo to discuss digitisation, the fragmented industry and the willingness to change.

Background Information

Thilo Schaefer was appointed Managing Director of Leisure Cargo in March 2016. In this position he is responsible for Sales & Marketing, Operations, Customer Service, Business Development and Key Account Management. In before Schaefer worked for about 20 years in the Lufthansa Group. In his last responsibility as Vice President Global Handling (2009 to 2016) he was in charge of global handling processes, implementation of Lean Logistics, technology development and innovations, as well as management of loading devices. Furthermore, he drove initiatives to digitise operational business processes.

Leisure Cargo offers unrivalled worldwide access to the valuable cargo capacity to 400 key destinations of a wide range of international and regional airlines. Established in January 2000, Leisure Cargo has become the number one airline total cargo management provider, without a fleet of its own, but with access to the bellies of some 14 carriers.

As a Germany-based company we specialise in turnkey cargo sales and service concepts, as well as offering exclusive and personalised bespoke cargo management. Our Total Air Cargo Management team provides our partner carriers with finely-tuned expertise, including sales, ground handling and road feeder services, all supported by a worldwide GSA network.

Video Transcript

Leisure Cargo represents 14 airlines and supports 300 destinations worldwide, and has a fleet of more than 500. Thilo has over 20 years experience in the airline industry with the Lufthansa Group, and joined as managing director last year with Leisure Cargo.

Thilo thank you so much for joining us today. Can you give us a brief outline of Leisure Cargo and what you do?

Leisure Cargo is a Total Cargo Management provider for international and regional airlines. As a business process outsourcing partner, we are offering a whole bunch of services for these airlines in order for them to dissolve their cargo organisation and to have an efficient and effective service provider, who ensures that their bellies are filled with the right car, with the right time, at the right place.

And what services do you provide?

The whole service are composed by four main components, which is operations, where we make sure that cargo is handled with more than 140 handling agents worldwide at these 300 destinations. Within sales, we have 70 partners worldwide making sure that we are close to the customers, that we have an excellent customer service, and that we serve the airline industry and the air freight industry as its best.

And what makes you different from GSAs?

The main difference is that GSAs mostly concentrate on sales only. But us, we have the whole package, which is also covering the operational aspects, especially the accounting aspect. That is a major difference so we enable an airline to totally dissolve their cargo operation and their cargo organisation, and so becoming more effective on their side and very efficient on our side. And on top, and that is probably one of the major advantages for the airlines is, every airline joining our business model with one airway bill only, is having an instant access to the whole network of all airlines. And that is a business model that does not exist anymore in the industry. So it’s very unique, and probably for that reason, also quite successful.

So how do we continue the success?

Actually our idea is to extend our portfolio of carriers over the next years, in order to have a broader global coverage of all services. We just recently won a big tender of the Thomas Cook Group, so we are now representing the whole Thomas Cook Group, TUI Group, five out of six airlines; Air Berlin, Air Europa, Air Transat, and some others, just to name the major ones. And I believe we are in a good way to enhance our portfolio in order to achieve that ultimate goal to have a global coverage.

And what are the main challenges that Leisure Cargo faces, and the air cargo industry as a whole?

You know I wouldn’t talk too much about our individual challenges because I believe they are much bigger challenges of the industry. Regarding our own challenge, we see the same yield decrease as any other airline, but that is not the major issue. I believe we have an issue as an industry. And that issue is that over the last 20 years, out of the total cargo movements worldwide, the air freight industry has lost more than 50 percent. We represented two percent of global trade 20 years ago and now we represent less than one percent, and I think that’s a major concern and should be a major concern for our industry, and where does it come from? We have a very fragmented industry. In comparison to some other industries, we have so many stakeholders in the supply chain and everybody has his own idea systems, his own processes, so the services that we offer are not as efficient as they could be. So I believe there must be a consolidation on the one hand in our industry, in order to be competitive with the integrators, to be competitive with new market entries like Amazon, huh? That was predicted that Amazon is gonna come into our industry, now they have arrived, and we face new challenges with these guys. So we have to make up our mind how we want to reorganise the whole transportation chain, the whole supply chain, and finding the right role for every stakeholder in this chain.

And finding the solution?

Absolutely, and the solution yeah, and the solution actually could be that we work much more on standardisation, on automation, and finally on digitization. And here we are really lacking behind many of the industry. Just to give you one example, the automotive industry yeah? Is about 20 years ahead of us in terms of automation. When it comes to standardisation, we are all saying yeah the standards are there, they are coming from IATA or from other bodies, but do we really apply them? No we don’t. So there’s a big issue, to standardise our processes first, then automize them, then finally to digitise them. And if we do that, if we are really able to convince all stakeholders in the chain to digitise our business, then we become competitive again in our industry, and that is the ultimate goal. And actually, I do support that personally in initiatives like the Global Data Backbone Project that we are running with Ericsson and some other companies. Why, we just had a meeting last week in Stockholm which was, by the way, a very successful one.

Excellent, and how does this show affect Leisure Cargo?

It is the platform, it is the platform every two years, where you can represent your company, where you can meet many people very efficiently, and it is at the heart of the global cargo industry. So for us it’s a must-go.

Thank you Thilo and good luck for the rest of the week at the show.

Thank you very much.

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