Dr. Stefan Schulte: The Frankfurt transport hub – the mobility centre in the heart of Europe

Even now, Frankfurt Airport is one of the world’s major logistics hubs. When com­­pared to the rest of the world, Frankfurt is in seventh place after the freight airports of Memphis, Ancho­rage, the Asian “giants” Hong Kong, Shanghai, Seoul and “Charles de Gaul­­le” Airport in Paris. Paris-Charles de Gaul­­le is where the extensive exchange of airmail between Paris and the French overseas colonies and former overseas territories takes place. In Frankfurt the trans­­­port of airmail was wound down to zero, a po­­si­­tive factor for night-time noise pollution.

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Airfreight depends on central air transport hubs more than passenger traffic. Half of all goods carried by air arrives at and leaves from 22 airports. In Frank­­furt’s particular favour is its central position in Europe. This corresponds to the excellent road transport network at the intersection of two main Euro­pean motorway axes, which carry more than 330,000 vehicles every day. Less relevant for cargo traffic but hence all the more so for travellers, Frankfurt Air­port’s intermodal connection with Germany’s rail network – from regional traffic to the European high-speed lines – is not just more than excellent, it is probably unique.

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The importance of logistics will increase considerably with intensifying globalization. Products will become increasingly smaller, lighter and “more intelligent”. At the same time, market renewal cycles are becoming shorter. This means that anyone who wants to stay competitive is going to have to use airfreight, other­­wise they run the risk of not arriving on the market before the next generation of equipment has already announced its arrival.
Even now, 40 per cent of all goods by value carried cross-border are carried by air, and this figure will increase. This is because the business organization model is changing. The static industrial cores are disintegrating and their functions are being replaced by constantly variably networked exchange relationships in a worldwide network. This is especially true for large company groups, which are using the inno­vative and added value advantages of globalization and thereby increasing global competition with each other. Thanks to round-the-world mobility, manufactured goods are being developed in an increasingly modular fashion, so that they can be purchased in the same way by customers all around the world. This is being accompanied by a modular breakdown of innovative competence.

Its developmental dynamics are being considerably accelerated by heightened competition. The idea, concept, planning and production of goods no longer take place at a single location; today they are distributed across the globe on a network basis. The global competition chain is taking over from the Tay­lo­rism – a theory of management that analyzes and synthesizes workflows in order to improve labour productivity – on the production line. The worldwide dis­persed production must integrate logistics from the first product idea and not when the product is being shipped. The global supply chain is becoming an elementary integral part of the production process. It is constructed in a manner which is no less complex than the conventional production line.

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Today the logistics chain accounts for fully one third of all purchasing costs of a product. Procurement costs include all mobility costs from the purchase of ma­­te­­rials to sales, including interim stor­­age and increasingly important quality ma­­n­age­­ment (“Is the cheap part from Country xyz with its high rejection rate really cheaper than the more expensive quality product from a high-wage country?”). This third represents major efficiency potential if the supply chain can be configured even more intelligently and rationally. Physical transport is con­­centra­t­­ing increasingly on major distribution hubs because the hubs can achieve and exploit ideal econ­­omies of scale. The global struc­ture of industrial process chains is making the time-factor in­­creas­­ingly important. That means that air cargo is offering strategic competitive advantages. The leading edge in speed achieved through air transport must be maintained on the ground. Cen­­trally lo­­cated warehouses with perfect intermodal networks increase expo­nen­tially the ad­­vantages gained from carrying goods by air.

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Logistics has since moved on complete­­ly from the stage of the solely tactically sup­portive function of the economy and has become a significant economic fac­­tor in its own right and accounts for seven per cent of GDP. 60,000, mainly medium-sized, logistics service providers employ more than 2.7 million people. The main international logistics companies all have their own offices or freight centres at Frankfurt Airport. Of the more than 70,000 employees at the airport – which make it the largest local workplace in Germany – some 12,000 work at “CargoCity”. In addition, logistics create the conditions for the economic dynamics of the entire economy. This is indispensable for an export nation – and more so for the world’s “export champion”. This explains why the extension of Frankfurt Airport is also a challenge of national importance. Almost 70 per cent of international passenger traffic from Germany passes through the Frankfurt hub, which is also one of the world’s largest transfer airports. Also the “freight-only” companies that travel to intercontinental destinations the mar­­ket share lies well over 70 per cent. Over­­all, 28 air­­lines fly to 87 de­­s­­tinations, 58 of which are inter­con­­tinental, and 46 of which are freight destinations only. With the Passage, some 120 airlines fly to more than 300 destinations in summer and over 260 in winter, all to more than 100 countries. With the additional tarmac the available capacity will in­­crease by about 50 per cent to 126 slots per hour in order to finally accom­­modate the extra demand. Even in the current international credit crisis, the demand by airlines for time windows for starting and landing at Frankfurt Airport has in­­creased. With the gradual upturn in economic activity, the volume of air traffic at the airport will quickly recover.

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Even as the crisis was ending, it is becoming apparent that airfreight is an early indicator for economic activity – the volume of freight had significantly increased.

Porträtbild_dr_stefan_schulte-KopieThe author was born in 1960. He has worked for Fraport AG since 2003 and is now chairman of the executive board. As CEO Finance he was responsible for com­­mercial activities, IT services and the Group’s invest­­ment activities. He was ap­­pointed deputy executive board chair­­man in 2007 and today he manages the Group’s aviation, ground hand­ling, retail and properties operations as well as its external activities.