Kuehne+Nagel grows partnerships, freighter capacity and efficiency
12 / 06 / 2023
Holger Ketz, global head of air logistics network & carrier management at Kuehne+Nagel. Photo: Kuehne+Nagel
Air Cargo News spoke to Kuehne+Nagel’s global head of air logistics network & carrier management Holger Ketz about the freight forwarder’s capacity plans, market challenges and digitalisation.
What plans does Kuehne+Nagel have for freighter capacity?
We expanded our dedicated charter network recently and entered into a long-term partnership agreement with Atlas Air for the very last two Boeing 747-800s ever produced.
These two aircraft were recently delivered and put into service, and are operating several times a week on multiple routes on the Transpacific and Transatlantic.
We have entered into another new long-term partnership agreement with Birmingham-Shuttlesworth Airport to better meet the cargo needs of our customers in the southeastern part of the US. Since April this year, we serve this airport from Germany with two weekly connections.
As a matter of principle, we align our own-controlled network and capacities exclusively to the requirements of our customers and will continue to invest in additional capacities in the future to meet those demands.
Of course, there are different considerations and focus areas depending on the trade lane and markets, but one can basically state that our expansions of capacity are more solution-oriented and less intended to be purely capacity focused.
In this respect, it cannot be ruled out that we will add further lanes to our own controlled capacity network this year.
Are any other air cargo investments being considered?
Our global gateways are already today the backbone of our global capacity management. In order to scale this core element to the next level, we will invest in large-scale standardisation and additional systems, which we have defined as part of our Roadmap 2026.
The primary aim is about adding value by cloning processes and ways of working, implementing additional core elements in our TMS to eventually make an even better usage of our existing global capacities.
Today, the Kuehne+Nagel Group handles around 3,000 charters a year. These charter activities – One Way and Roundtrip – will in the future be processed in one organisational unit to ensure that the existing capacities can be transferred even better into solutions for our customers.
How is the company adapting and investing in technology to develop the business for the future?
As part of the “Digital Ecosystem” cornerstone of our Air Logistics Strategy Roadmap 2026 we will continue to invest in a highly automated shipment execution through our eTouch initiative.
eTouch was already part of our transformation in the context of our strategy until 2022 and covers instant, accurate actions and information to empower our product delivery and to simplify the operational processing with our customers.
Our eTouch ambition is to create and run an intelligent, digital operation with real-time visibility into every action, with fully automated shipments at its core which enables us to work even smarter
What is the outlook for demand and capacity?
Demand continues to be rather difficult to predict. There are big variations between regions and industries and as we have seen in Q1 already, there will be regions and industry verticals recording gains, while others will be deviating heavily from the global average.
In general, it is to be expected that the slowdown will continue this summer and that advanced economies will be more affected by the slowing down than emerging countries.
Considering the last reported statistics, it can certainly be predicted that inflation looks to have peaked, which eventually will have a positive impact on the general demand development.
Overall, more capacity is returning back into the market, especially due to increased bellyhold in the summer season.
Whilst the freighter fleet is operating at 100% and partly more of pre-Covid capacities, the passenger network is returning more gradually.
And with Covid restrictions now being fully lifted it can be expected that the passenger network capacity will be back to its original levels in the coming months.
This development in combination with still existing charter capacity in the market can certainly lead to overcapacity during the period of the Summer Flight schedule, if demand will stay as is.
What are the biggest air cargo challenges for the company, and the wider industry?
One of our main focuses is delivering a great customer experience by providing reliable and efficient transportation. This can be achieved through a closer collaboration throughout the entire supply chain.
Today there are so many parties involved in air cargo when moving a shipment, so there needs to be optimised communication and collaboration between all entities.
This is especially done through further investment into digitalisation of internal processes as well as touchpoints to partners – be it suppliers or customers.
The industry has multiple quality initiatives like Cargo iQ, which will support us in delivering our services as promised.
Sustainability is also another very important topic for us, as well as the wider industry.
We need to drastically reduce our carbon emissions as an industry, and we need to support our customers’ targets as well.
As the burning of fuel is by far the largest emitter of carbon emissions (more than 98% of our Scope 3 (indirect) emissions in air logistics are just from the burning of kerosene), Sustainable Aviation Fuel (SAF) is today the only efficient and available option for considerably reducing emissions.