By Marcia MacLeod
Kuehne+Nagel is targeting automotive as one of the niche markets it thinks will help it grow its business, especially in the UK.
The company has recently set up an overnight service delivering service parts companies like Fiat, which includes Chrysler and Jeep. A 30,000ft2 (2,800m2) warehouse in the north west of England should be fully operational in April.
“We want to extend this further,” said Glen Lindfield, head of contract logistics for north west Europe. “We already do line feed in continental Europe, so don’t see why we can’t do it in the UK, although there isn’t much manufacturing left in Britain.”
The company has also signalled its push to become the number three road operator in Europe by 2014 with the purchase of UK haulier RH Freight, a company already well known in the automotive sector.
“RH Freight is much more advanced in European road freight than we are,” admitted Tim Scharwath, president of K+N’s north west Europe division. “By buying RH Freight, we jump from number nine to number two in UK road operators list.
“Although the purchase is subject to anti-competition review in Germany and Austria, we don’t see any problems with that,” Scharwath continued. “We are not yet sure how we will merge the two, but RH Freight has a presence in markets where we are weak and depots in places like Poole where we are not currently present.”
Ian Baxter, currently managing director of RH Freight, will become non-executive chairman of RH Freight, part of Kuehne+Nagel Group. The RH Freight name will disappear in 2013.
Road and rail business grew by 16% last year, with a forecast for this year of another 8% growth. Kuehne+Nagel wants to double turnover by 2014 and develop more than 500 international trade lanes and over 2,000 departures per week throughout Europe. But the company is not ignoring sea or airfreight.
“We want to build our airfreight business,” adds Scharwath. “Airfreight turnover rose 25% last year, out-performing the market, which saw an 18-20% increase; volumes increased by 13%.”
K+N expects another 12% increase this year, but by 2014, it aims to be moving 1.3m tonnes of airfreight, which is more than 30% above the current figure of 948,000 tonnes.
Seafreight is also being expanded, with the aim of doubling ocean-going volumes by 2014. “From the UK, we want to target Latin America and the Middle East, which are not our strongest markets,” said Daryl Ridgway, seafreight director for north west Europe.
“Seafreight grew by 16% last year – to 2.945m TEUs – compared to a 10 or 12% market growth. This year we expect another increase of 15%, but in order to double existing volumes, we are building up our LCL business, as well as concentrating on new and niche markets.”
The company is also looking at entering emerging markets. “We re-opened our office in Egypt,” Scharwath pointed out. “If the situation elsewhere, such as Libya, stabilises, we would consider opening up in the relevant region. And China remains extremely important. But there are risks in entering these markets due to currency exchange issues and politics.”