Lufthansa Cargo launches new e-commerce unit | Supply Chain Dive

Dive Brief:

Dive Insight:

Heyworld’s launch is the latest sign that rapidly increasing cross-border e-commerce parcel volumes are shaking up the air freight industry. “Ongoing digitization has resulted in new standards with multiple layers, especially in the e-commerce segment, that go beyond the conventional core business of a cargo airline,” Lufthansa’s press release states, and as a result, the company is banking on creating more value for the growing e-tailer and direct to consumer brands that want to expand to international markets by reducing some of these barriers.

Cross-border e-commerce shipments require additional customs duties, tracking and processing protocols and other supply chain complications that are amplified by a highly diverse market of individual online retailers and customers (as opposed to a more consolidated customer base of traditional brick-and-mortar companies).

The double-edged sword of the e-commerce market is that your customer can be anyone, anywhere, with an internet connection. As a result, the e-commerce market continues to boom, but as more consumers come online in Africa and Southeast Asia, establishing reliable delivery networks to those locations can be a challenge. The brands that figure out how to deliver the fastest and most reliably will have a distinct competitive advantage. 

E-commerce is expected to be a growth driver for the air freight industry going forward. Amazon has entered this space with Prime Air, and FedEx Express’ recent split from the giant e-tailer has some wondering if the race for air cargo dominance is beginning anew.

Lufthansa’s offering of services beyond airport-to-airport transfer demonstrates a focus on customer service and a desire to cater to the needs of a growing market. 

This content was originally published here.

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