[photopress:kandN.jpg,full,alignright]Kuehne + Nagel (yes, that is how it insists its name is shown. Swiss companies often have odd quirks like that) estimates that the global contract logistics market is worth around $130 billion.
Almost half of that business is in the Americas, followed by Europe (39%), Japan (18%) and Asia Pacific region (6%). Notice carefully it says ‘contract’ logistics. Make it just logistics and the figures are very different.
The Asian slice of the contract logistics pie is a relatively thin wedge worth $7.8 billion and it is by far the fastest-growing region.
Dirk Reich, K+N executive vice-president for contract logistics, said, ‘We are focusing on the Asia Pacific market and that’s the market with the highest growth.’
The Swiss logistics giant has opened 32 locations in China with another 10 to follow in the next year.
Dirk Reich said, ‘We need to be No 1 in Asia. If we are not number one here, we will not be able to achieve our goal of becoming the No 2 contract logistics operator in the world.’ Top position is currently held by DHL.
Contract logistics is where you handle all of the logistics for a large company. Doing this makes a company more asset-light by nature. Around 75% of the warehousing business is done through back-to-back rental and leasing contracts.
K+N’s top 15 customers represent 40% of the turnover which means there are less special needs to care for. On the company books are big names such as Inveco, Airbus, Carrefour, HP and Nortal; global organisations seeking to work with fewer service providers on a worldwide basis.
Dirk Reich said, ‘Our share of logistics spending with these companies is a small percentage of what the companies spend across the world. Unilever, for instance, spends more than $1 billion.’
He said K+N had already established the base in Asia Pacific from which to expand and move into the next phase of development. ‘We plan to increase business 10-fold over the next few years and it will be mainly organic growth.’
Andy Weber, K+N managing director Asia Pacific, said China was the driving force behind the global economy. She said, ‘By strategically strengthening our presence in the region further, we are going to capitalise on the growth opportunities offered in these markets.’
Source: Cargo News
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