K
& N China Goes West
The
Kuehne + Nagel group may have cut its competitive teeth in Europe, but
the Asia Pacific zone now generates much of its revenue and volume growth,
not least for its air division. That was the key point made by Thomas
Lehmann, (right) Senior Vice President, Airfreight for the Asia Pacific
Region, when he spoke to us from his office in Singapore, which is now
the company’s regional base following its relocation from Hong Kong
last year.
2010 air cargo volumes managed by the Switzerland-based
logistics and forwarding major increased on all routes, rising 25 percent
overall to almost one million metric tons, aided by K+N’s strong
presence in the pharmaceuticals, high-tech and perishable sectors. But
the standout performer was traffic to and from the Asia-Pacific region.
K+N’s Asia Pacific organization handled
504,000 tons of air cargo in 2010, representing a 47 percent hike compared
to a year earlier and contributing 53 percent of the group’s total
air volumes.
The trend has continued this year. “Overall,
the airfreight business in Asia Pacific is up compared to the same period
last year,” offered Lehmann, who said K+N was continuing its heavy
investment in sales and industry-specific product offerings in the region.
“The revival of the world economy
was accompanied by a distinct rise in transport and logistics volume,
primarily in the Asia Pacific region.
“Demand for Hi-Tech, Electronics,
Automotive and raw materials are the main drivers of growth.”
K+N’s Asia-Pacific organisation was
established in Hong Kong in 1961 and now covers 152 locations in 21 countries
employing some 6,800 people. Managers are able to draw on managed warehouse
space totalling 450,000 square metres located across the region, as well
as 75 contract logistics facilities.
Lehmann said that, depending on the requirements
of customers and lanes, K+N’s capacity sourcing was a mixture of
wide body and narrow body aircraft supported by limited use of low cost
carrier capacity on intra-Asia trades. By leveraging its multi-carrier
programme and optimising its trade lane management, Lehmann expected K+N
to achieve above market average growth in its air business again this
year.
“The company assigns great importance
to the expansion of activities in the Asia Pacific region as well as to
the development of new products and services for niche segments.
“We have expanded into the niche sector
of perishables logistics, as well as industry-specific solutions for the
pharmaceutical and healthcare sector.
“We are continuously observing market
demands, enabling us to offer tailor-made services requested by our customers.”
A
recent report by Boeing predicted intra-Asia annual air cargo growth of
7.9 percent per year through 2029 and Lehmann forecast this would be a
key trade lane for K+N in both the short- and long-term.
“Increased importance is being attached
to the Intra-Asia and transpacific trades, with the key objective of offering
customers best possible services and access to key markets.”
China, not surprisingly, will be critical
to sustaining K+Ns impressive growth rates. Andy Weber, (left) president
of K+N Asia Pacific, told ACNFT that the company
was now represented in 40 locations in China, all with Class ‘A’
Forwarder Licenses.
The 35-year logistics veteran claimed K+N
was among the top five airfreight logistics providers in China, where
it employs over 3,000 people, and he confirmed that import growth this
year was stronger than exports, a trend that prompted K+N to establish
specific industry competence centers.
Further network expansion is now on the
cards in China. Weber identified key growth markets away from established
centers on the coast; Chongqing, where authorities are determined to establish
the city as the largest notebook manufacturing location in the world,
Chengdu for automotive and software, Zhengzhou for hi-tech manufacturing,
Wuhan, Jinan, Changsha for automotive OEMs and suppliers, and Lianyungang
for chemicals, pharmaceuticals and healthcare.
“Kuehne + Nagel has been expanding
its footprint throughout China, not only in the eastern region, but also
in the central and western provinces of China,” he said.
“The company focuses primarily on
organic growth, with aggressive investments in local logistics experts
in core business fields such as seafreight, airfreight and contract logistics
as well as building up a virtual road logistics network.
“We will set up more offices, in line
with our growth strategies and China’s ‘Go West’ initiatives.”
Sky King |