Lufthansa Cargo Director: Why Russia is a very important market

Christian Becker is the regional director of Russia and the CIS for Lufthansa Cargo, one of the main foreign air cargo companies in the Russian Federation. Modern Russia was fortunate enough to meet him and discuss his company’s business in Russia and the general state of the country’s infrastructure and logistics sector.  

Due to its central location on the Eurasian continent and its huge size, Russia is a particularly interesting market for logistics and transportation companies. Does Lufthansa Cargo intend to expand its business operations there? What are Lufthansa Cargo’s middle to long-term plans concerning Russia?

Russia is a very important market for Lufthansa Cargo for four different reasons.  First, the Russian market is constantly growing with regard to imports, with the current imports/exports ratio at 4:1. To accommodate this demand, our MD11 freighters now run three weekly trips from Frankfurt to Sheremetyevo, a significant increase compared to the once-a-week operation in 2009. 

We also are serving Domodedovo with more than ten daily passenger service runs from Germany and Austria. Combining freighter and passenger aircraft, we are able to serve the key logistical centers in Moscow and St. Petersburg in addition to our service to remote cities up to the Ural Mountains. Large and over-sized cargo destined to remote Russian cities are usually flown to Sheremetyevo and then forwarded on in trucks organized with local partners. The same process applies for exports, with direct flights to Germany taking place on a nearly daily basis. 

We also focus on transit through Russia, having chosen Krasnoyarsk as Lufthansa’s largest hub outside of Germany. 

The final point concerns our future growth, which very much depends on the Russian government’s traffic policy and its plans to de-centralize the flow of cargo. When it comes to cargo bound for Russia, most international carriers fly exclusively to Moscow, as it is currently prohibited to make another stopover on account of traffic rights and customs regulations. Should this change, we would definitely look for additional cities that could be integrated into our flight schedule, with Siberia being high at the top of our list. 

Lufthansa Cargo’s central hub is the Krasnoyarsk airport, which has recently been modernized to provide better operating conditions for the airlines while on the ground. What role does this airport play in Lufthansa Cargo’s international operations?

As already mentioned, Krasnoyarsk is our largest hub outside Germany. We have increased the frequency to 40 flights per week, up from 21 per week in 2009. The airport’s investments made prior to our operation were significant, and further improvements were done in close cooperation with us. The services rendered to us today fulfill our expectations and, even more importantly, our safety standards. “Continuous improvement” is what we have agreed upon and strive for together with airport officials. For this reason we have just recently extended our contract there for another three years.

The main advantage of Krasnoyarsk is the reduced flight time to northern Asia, which allows us to save approximately one hour on a round trip from Germany. You can imagine how strongly this impacts our fuel consumption and carbon emissions.  

How do you assess the state of Russia’s logistics and transportation infrastructure? Would you have any recommendations regarding how this infrastructure could be improved?

The airport and airline service infrastructure still lags behind expectations, but we acknowledge that while the deficits have been recognized, it is important to clarify exactly what needs to be done.

From our point of view, investments need to be made to oversee the following changes in infrastructure and services: 

1. Runway upgrades to at least CATII levels

2. De-icing equipment upgrades for western model aircraft

3. Fuel supplies and rapid fueling capabilities

4. Warehouses upgrades with the latest technologies

5. Enforcement of international security and safety measures

6. IT equipment updates, including data lines and interfaces to common IT platforms

7. International Air Transport Association (IATA) training for airport and hub staff 

8. Improved communication capabilities on behalf of local authorities when dealing with foreign companies

9. Preparations for paperless documentation (eFreight)

Last but not least, a culture of willingness to learn from each other and to constantly improve services must be fostered.  There is no doubt that government agencies, particularly the federal customs authorities, must be integrated into this set up as well if decentralized growth is to be targeted. Restrictions regarding commercial traffic rights are currently hindering us, preventing us from providing more services in Russia.

It is therefore crucial to regularly participate in exchanges with Russian authorities, such as the recent Russian Air Cargo and Airport Conference in Novosibirsk, as well as to involve more stakeholders. Only through close cooperation between airports, airlines, customs brokers and customs authorities can solutions for Russian customers be provided.