Nikola Hagleitner became global head of the Industrial Projects subdivision at DHL Global Forwarding in October 2013. Before that, she was global head of business strategy at DHL Global Forwarding, Freight. Industrial Projects uses both airfreight and oceanfreight, with cargo often going to remote locations. Air cargo makes up 10 percent of Industrial Projects’ total volume. Hagleitner spoke with Air Cargo World about her job and how projects use airfreight.
How do industrial projects use airfreight?
Every large project that we do typically has, when the project requirements come out, there’s a certain component of airfreight within it. It’s normally a quite small part of industrial projects. But then the more and more we progress more with the project, typically on customer side, as there are some delays or there’s unpredicted events occurring, then the amount of airfreight typically increases. So it’s not from the get-go that you have a large airfreight portion. It’s typically when the project runs over on the customer side or something happens, then we increase the airfreight component of it.
We also have another very interesting airfreight business, so to speak. We have the same-day business, which has now moved over from the Express division to the Global Forwarding division. And, we from Industrial Projects, we work very closely with that area. That means that we cater to emergency situations, especially with our oil companies or oil customers, the international oil companies or the oil service companies, when they have an emergency situation – for example, a rig down, or they need an urgent spare part, or they need to transport small explosive stuff or nuclear stuff around the world – this is when they come to us.
Why do industrial projects use air cargo?
It’s really driven not so much by us but by customers. There are certain components of a project that need to be delivered faster or that have been not planned for at the beginning, then they automatically go back to airfreight, or if it’s more sensitive cargo. But due to the nature of our business, the projects, they are normally known already two years or so before they start. So the customer has quite a long planning stage, and that’s why as the nature of the business, we start off with more oceanfreight with our projects. Also, of course our customers are becoming much more price-sensitive, so they try to plan much better, but I can ensure you there’s always a good portion of the airfreight left for us.
How is the growth of industrial projects using airfreight?
It’s project by project, but I would say it stays fairly constant. We see a bit of an uptick again with charters, where we charter whole aircraft and send them around. But in general, our airfreight does not decline as much as the normal forwarding business, and we also don’t expect a large uptick.
How do you think the airfreight industry can improve?
When I look at the industry, I think the industry is also immature in some areas. I mean, the amount of manual work that goes into airfreight nowadays in 2014 is really astonishing. By having more E-freight, let’s say, or more standards between the European countries, the U.S., the Asian countries – by just having more standards and more reliable global operating procedures, I think that would really improve the airfreight. Oceanfreight has also become much more reliable now and much more predictable…When we lose airfreight [to oceanfreight], as we put it on an ocean carrier, that’s just a very small portion of the box actually or container going on a ship. It doesn’t make a dent on the oceanfreight side, but it’s a huge decline potentially on the airfreight side for a forwarder like us.
What are some trends going on with air cargo and industrial projects right now?
They are less significant with industrial projects than with the regular forwarding business. As I said, our customers will always plan badly. So for us really, airfreight decline is not a big issue, and it’s not going to have a big increase, not a big decrease. I think where the real issue is with airfreight is more on the regular cargo…For us, if something needs to be urgently shipped, it needs to be urgently shipped, and then there is no way you can put it on a truck or you can put it on rail or you can put it on an ocean carrier. So for us really, because our portion of airfreight is not so large to begin with, we don’t have as much impact on the structural change of the airfreight market than the regular forwarding business.