John Johnston CEO CHAMP Cargosystems S'A'

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John JohnstonCEOCHAMP Cargosystems S.A.
RFID, Added Value in Logistics
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Who is

• The former IT Division of Cargolux Airlines.
• A Cargolux Company.
• 100 outsource of Cargolux IT.
• From PC maintenance to
• Complex system development.
• One of the largest ASP providers to the Global
  Air Cargo Industry.

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Cargolux the main link in the transportation
chain
Transportation from shipper to consignee"
Handling
Trucking
Customs
Handling
Trucking
Customs
Air Transportation
Shipper
Consignee
30 of time coverage
Cargo airlines service is one part of the
transportation chain.
A
B
Movement of commodity from Shipper to Consignee
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Cargolux Destinations 2004
Prestwick
Manchester
Calgary
Luxembourg
Seattle
Maastricht
Baku
Budapest
Milan
Seoul
New York
Istanbul
San Francisco
Tehran
Shanghai
Huntsville
Komatsu
Damascus
Beirut
Los Angeles
Hong Kong
Kuwait
Miami
Houston
Karachi
Taipei
Abu Dhabi
Bangkok
Dubai Sharjah
Guadalajara
Fort-de-France
Manila
Mexico
Panama
Accra
Madras
Abidjan
Kuala Lumpur
Bogota
Nairobi
Latacunga
Singapore
Kinshasa
Rio de Janeiro
St Denis - Reunion
Sao Paolo
Johannesburg
Curitiba
Auckland
Melbourne
Santiago
charter destination
Additional destinations are served via
interline and trucking
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Cargolux Fleet (April 2004)

• Currently 13 B747-400F
• LX-FCV City of Luxembourg
• LX-GCV City of Esch-sur-Alzette
• LX-ICV City of Ettelbruck
• LX-KCV City of Dudelange
• LX-LCV City of Grevenmacher
• LX-MCV City of Echternach
• LX-NCV City of Vianden
• LX-OCV City of Differdange
• LX-PCV City of Diekirch
• LX-RCV Spirit of Schengen
• LX-SCV City of Niederanven
• LX-TCV City of Sandweiler
• LX-UCV City of Bertrange

14th to be delivered in Oct. 2005
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Cargolux Business as usual

• Engineering, mechanical and Oil-drilling
  equipment
• Fresh fruit, flowers fish
• Electronics computer hardware
• Automotive components
• Fashion goods and textiles
• Artworks
• Cars, racing cars
• Live animals (horses, etc.)
• Pharmaceuticals

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and unusual

• A white rhino to Africa
• Chilean alpacas to Europe
• Sled dogs to Alaska
• Prototype cars for testing purposes

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RFID, Added Value in Logistics
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Technology, a matter of survival

• Globalization creates
• Movement of manufacturing processes
• Greater component based manufacturing/assembly
• Greater volatility in the life cycle of a
  manufacturing facility
• Huge demand for efficient logistics
• But..it is not a level playing field..

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Technology, a matter of survival

• Manufacturing has/is moving east
• Significantly lower labor costs
• Cheaper materials
• Logistics is also moving East
• The fastest growing Airlines in the Air Cargo
  World, are in the Far East.
• The only exception being Cargolux.
• Logistics is treated as a core activity by Far
  Eastern carriers.

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Technology, a matter of survival

• Labor costs for a Carrier based in the Far East
  is significantly less than for a European
  carrier.
• Europeans must be more efficient
• Europeans must be World Champions at cost
  control
• Europeans must be more innovative..
• Europeans must offer high quality at competitive
  prices
• Europeans must be early adopters of new
  technology
• OR DIE!

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RFID, What can it do for Air Cargo?

• Cargolux has an inventory of 9540 ULDs.
• In 2003, 183 units were lost.
• EUR 120,000.00
• Approx 2 of the inventory
• It should be noted that this is significantly
  below the industry average.
• Lufthansa and Air France have a 5-6 yearly loss
  rate. This on a bigger inventory.

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RFID, What can it do for Air Cargo?

• A significant proportion of ULD losses in the
  industry are due to a break-down in unit tracking
  facilities.
• System
• Location
• Process Failure
• Installing RFID tags to ULDs, linked to process
  changes, has the potential to significantly
  reduce unit losses.

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RFID, What can it do for Air Cargo?

• For Cargolux, a 1 reduction in the loss rate of
  ULDs, would amount to
• EUR 60,000.00 per year in direct cost savings.
• Reduce staff time in tracing equipment.
• Reduce insurance risk.
• Improve efficiency.
• Reduce Station stock requirements.

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RFID, What can it do for Air Cargo?

• RFID tags at the shipment level would
• Reduce the labor required to identify shipments
• Warehouse efficiencies
• Manpower
• Better use of automated stacking equipment
• Quicker transit times
• Through the warehouse
• Aircraft loading/unloading
• Truck acceptance/dispatch
• Increased customer service
• Improved Track and Trace
• Reduced claims
• Faster, proactive information exchange
• Reduced overall travel times

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We MUST learn from the past!

• When was the Bar Code invented ?
• 1947
• When was a common Bar Code standard adopted by
  the Air Cargo Industry ?
• 1995 (IATA Resolution 606)
• Why did it take 50 years to adopt a common
  standard ?
• National Interests
• Blatant protectionism
• Airline industrythe kings of the skies

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We MUST learn from the past!

• What has changed since 1990s ?
• Explosion of globalization
• EU customs National Boundaries for intra-Europe
  trade removed
• Airline Industry in crises
• Everyone needs better processes
• Everyone needs to reduce costs
• Everyone needs to improve customer service
• Everyone needs to provide value for money
• Everyone is COMPETING on a global level
• Individually
• In a Network
• In an Alliance
• The forward thinkers are ready to COMMIT

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RFID in Air Cargo?

• RFID is not a Nice to Have
• RFID is a MUST.

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And finally

• The chicken, or the egg
• Or
• Involvement vs Commitment

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Thank you
"Learning is like rowing upstream, not to advance
is to drop back."Chinese proverb