End-to-end in the logistics sector: “A unique combination of IT expertise and industry knowledge”

Raid Kokaly: The sector’s expectations are absolutely justified – but, given the high degree of complexity, the reality often tends to lag behind somewhat. Shipments often pass through the hands of a dozen different companies, from local couriers to international logistics companies. And, at each hub – whether a harbor, an airport or a rail freight terminal – different actors are involved, from carriers to ground handlers and terminal operators. Each has their own IT systems, their own data formats and their own procedures. Then there are international transports, which have to comply with country-specific regulations. This forces stakeholders to work in different portals, complete an array of documents and use different tracking codes. This fragmentation is where genuine door-to-door transparency currently falls down.

Lars Schwabe: The aviation industry shows how to do things better. Even on complex routes with several intermediate stops, the exchange of data between airlines is seamless. As a passenger, I can track my flight’s status at any time. The logistics sector still lacks this fundamental ability.

Lars Schwabe: Each actor in the chain has their own raison d’être and adds value in their own way. So, we have to learn to deal with this complexity rather than reducing it.

Raid Kokaly: Some of the major shipping companies are increasingly seeking to cover the entire transport chain from A to Z. They’re acquiring airlines, securing warehouse space and entering into strategic partnerships with freight forwarding companies. Transporting freight on the high seas has become a commodity in itself – and there’s now very little money to be earned through it. The margins lie in intermodal transport, which means transporting goods to the ships in the first place, and then from harbors to end customers. Nevertheless, reducing the number of actors isn’t the solution. Digitalization paired with standards is the key to getting to grips with complexity.

Lars Schwabe: Above all, it comes down to scheduling and planning. If you were actually able to plan end-to-end, it would facilitate optimal scheduling. In practice, however, scheduling only involves two or three parties at most – and they don’t yet share their data. As a result, optimizations primarily run aground at the handover points.  

Raid Kokaly: It’s only a technical problem in part. Many companies simply don’t want to disclose their data. Smaller freight forwarding companies fear that being transparent about who their customers are, and which routes they serve, could lead to their business being taken away. That’s why they often avoid major platforms.

Lars Schwabe: What’s more, there are no standardized IT interfaces like in the aviation industry. Instead, individual bilateral links exist between companies. If there are ten actors in a chain, these point-to-point links create unbelievably complex networks – a digital patchwork.

Raid Kokaly: In the aviation industry, there’s the One Record initiative. The concept behind this is to concentrate all data related to a given shipment in a single data set. When data is required, it can be accessed directly at the source via an API rather than requested from someone who only holds a copy. The underlying principle is “data stays at source”. This approach would also be interesting for the logistics sector. Ten of the largest ocean carriers have launched the Digital Container Shipping Association (DCSA), an initiative that aims to develop standards just like these.

Lars Schwabe: Smaller AI applications – to forecast a ship’s arrival time, for example – have long since become standard. But new agentic AI applications are also exciting. Just imagine: A fleet of well-informed AI agents identifying anomalies in the logistics chain at lightning speed and intervening proactively. They can call drivers, amend schedules and propose alternative routes. If these agents are “fed” with information from sensors and real-time data, they can interact with other AI agents and human stakeholders to coordinate all processes to optimal effect.

Lars Schwabe: Yes and no. Standards make matters simpler, of course. But I think that progress in AI technologies is opening the door to a lot of things that would once have required mandatory standards. AI can understand speech and is now able to deal very well with unstructured data, such as emails and freight documents, which represents a key lever. In tech circles, it’s common to hear people claim that the hottest new programming language is English – and with good reason. AI technologies have democratized access to AI. The same change is underway in data management and will also influence exchanges of data between companies.

Raid Kokaly: The strength of AI lies in handling available data in a creative and situationally appropriate way. This is what sets AI models apart from conventional algorithm-based solutions. It enables AI agents to solve problems in a similar way to humans, such as by making telephone calls or writing emails – but cheaper, faster and around the clock. While the results aren’t always perfect, we don’t expect unwavering perfection from people, either. Plus, AI agents learn very quickly.

Raid Kokaly: Our strengths lie in utterly reliable integration of the most wide-ranging systems. We understand that critical systems are sensitive and significant. During a recent customer visit, a managing director at a company that operates critical infrastructure told me: “If our system went down for two days, the entire transport chain across Germany would be compromised.” That statement makes clear just how diligent we need to be in our projects. Our customers dispatch hundreds of trucks, ships and flights every day. To ensure that these operations continue undisrupted while we implement new IT systems, we rely on proven roll-out methods that we’ve tested ourselves, with parallel operation and fall-back scenarios.

As part of the Lufthansa Group, we’re active in a highly digitalized industry that is subject to constant pressure to innovate from B2C commerce. We pursue a targeted approach to transfer this knowledge and our experience to other industries – especially logistics, a sector in which we’ve developed deep expertise over the course of decades. Thanks to our unique combination of IT expertise, well-founded industry knowledge and a refined cross-industry perspective (including aviation, logistics, mobility, retail and energy industries), we create quantifiable added value for our customers in the digital transformation.

Lars Schwabe: Our specialist expertise in logistics processes, gained from Lufthansa and implemented on the market, is worth its weight in gold. Of course, any IT consultant can program a single system. But in the logistics sector, with all its specialist domains, we go one step further and remain focused on the big picture. Our services and innovations incorporate our years of experience. For example, we’ve produced an asset tracking platform that makes it possible to track individual shipments with precision. This way, we offer our customers a straightforward and cost-effective end-to-end solution for tracking and process automation.