Although Tim Scharwath has been a member of Kuehne + Nagel’s team since 1992, his sphere of influence grew considerably in September with his appointment to the Kuehne + Nagel International AG Management Board. Responsible for K + N’s air logistics unit, Scharwath makes decisions that have the potential to affect the global airfreight sector. He recently discussed his plans for K + N with Air Cargo World.
1. How will K + N’s acquisition of Carl Drude GmbH & Co. affect airfreight operations?
Through the acquisition of Drude Logistik, Kuehne + Nagel gets access to a hub operation for the international overland groupage activities. Thus, the new Eurohub will be an integrated part and pillar of the overland network. It is planned that the European overland network will be also used for pick-up and delivery of European airfreight and seafreight shipments.
2. What are the biggest issues currently affecting the global airfreight sector?
The economic outlook triggered by the uncertainty from major markets, such as the U.S. and the EU, and the imbalance and upcoming overcapacity from the airlines are certainly the biggest issues right now. At the moment, it is nearly impossible to predict how the economy will
develop within the next few months, as there are numerous factors to consider. With new planes coming to market, the capacity, and therefore also the rate situation, will remain tense.
As we all know, growth in the international airfreight market slumped in the past few months. Compared to the same period in 2010, market freight volumes even stagnated. Although Kuehne + Nagel performed well during the past nine months, we are cautiously optimistic moving forward. After all, the demand for airfreight shipments may decline in the forthcoming months [if] the market volatility remains high.
3. Which regions is K+ N eyeing to grow its airfreight logistics operations?
It is always Kuehne + Nagel’s objective to outgrow the market in all regions and in all segments. However, as part of our global strategy, we’ve placed special emphasis on the intra-Asian and transpacific markets. We will continue to consequently implement our growth strategy and further build on our commitment to deliver innovative, value-adding services to our customers around the world.
In airfreight, we have always followed a strategy of both achieving organic growth and growth through acquisitions in niche segments to enlarge the customer-oriented product portfolio, as we did in the perishable market in Latin America. This approach will remain in place, as it proved to be very successful.
4. How do you anticipate the global airfreight logistics industry evolving in the next few years?
The forthcoming new rules regarding security, data integrity, CO2 emissions, etc., may well lead to a further consolidation in the market as high investments — for instance, in IT — will have to be made in order to meet the new requirements.
Looking back over the past two decades, we have seen consolidation “waves,” and it is quite likely that there will be another one coming along. In the ’90s, many forwarding companies merged in order to increase their global coverage, customer base and product portfolios. In the years to come, we may see mergers and takeovers merely for financial reasons, as it will be increasingly difficult — particularly for small- and medium-sized forwarders — to invest as much in future technology as required.
5. What key goals do you hope to accomplish in your role leading K + N’s airfreight division?
My goal is to continue to outperform the market and enhance Kuehne + Nagel’s reputation as an innovative and high-quality airfreight provider. The global market is still very fragmented, so there is a lot of potential to gain additional business and market share. We offer various airfreight products with several service levels, and all are designed to fit our customers’ needs.
In addition, we invest considerable resources — both financially and with know-how — in information technology. And we will make sure that Kuehne + Nagel will always be at the forefront when it comes to technological innovation and the use of electronic tools to reduce costs and increase quality in the airfreight business. The way we push Cargo 2000 is one of many examples of this approach.