Kuehne And Nagel In Asia-Pacific

By Amrit (05) Pratiksha (22) Sandeep (30) Sneha (33) Tandrima (37)

Freight Forwarding
An intermediary between a onsignor or onsignee o! goods " the transport arriers# whar!ingers# $stom a$thorities " other parties in $stoms brokerage# shipbrokeage" e%port ar &oading' A&so o!!ers &ogisti s management ad(i e " ons$&ting

)&oba& *n(ironmenta& hanges a!!e ting !reight !orwarding ind$stry in +,,0s'

)&oba& integration o! wor&d market -apid ad(an ements in .n!ormation Te hno&ogies /hanging demand " s$pp&y !or prod$ t " ser(i es *mergen e o! new markets All demanded for global flow of goods & transportation network.

/hanges o! e%pe tations !rom FF d$e to g&oba& en(ironmenta& hanges

)reater emphasis on managing s$pp&y hains " detai&ed prod$ t !&ow in!ormation to se $re " s$stain ompetiti(e ad(antage' Seek transportation " distrib$tion s$pp&iers with wor&dwide apabi&ities 0$st possess trained " ed$ ated pro!essiona&s with s$perior .T " in!ormation system apabi&ities' 1ogisti s ad(i e " ons$&ting

2i!!i $&ties !a ed by Freight !orwarding /os'

*ntrant o! new p&ayers &ike integrators (231# 4PS) 3rd party o$tso$r ing agents# .T ser(i e pro(iders# ons$&tants et p&ayed !or market share' /redibi&ity .ss$e o! not meeting the said promises (2e&i(ered &itt&e or promised too m$ h)' 2istr$st made swit ho(er o! $stomers to spe ia&ist &ogisti ser(i e pro(iders or e%press o$rier !irms in ase o! physi a& distrib$tion'

Trends in !reight !orwarding ind$stry in the Asia5Pa i!i region in +,,0s

3ong 6ong7 1argest and B$siest /ontainer Port
! *!!i ient trade and transportation h$b ! Sophisti ated transportation networks ! *!!i ient in!rastr$ t$re# s$pport systems and &ega& and !inan e systems

Physi a& )oods 2istrib$tion 0arket

! 3$ge pop$&ation si8e and geographi a& area ! -e&ati(e&y $nde(e&oped market ! 9iewed as ma:or growth pro(iders

Trends in !reight !orwarding ind$stry in the Asia5Pa i!i region in +,,0s /ontd''
Fo$r /ategories o! o$ntries7
! ;ea&thy demo ra ies7 &ow d$ties# mat$re ad(an ed in!rastr$ t$res# e#g <apan $stoms pro esses#

! Trading Tigers7 !ree $stom pro esses# &ow d$ty &e(e&s# mat$re in!rastr$ t$re# e'g Singapore ! B$rgeoning .nd$stria&ists7 omp&e% $stoms pro esses# high d$ty &e(e&s# immat$re in!rastr$ t$res# eg 6orea ! F$t$re Powerho$ses7 in!orma& $stoms pro esses# high d$ty &e(e&s# ba kward in!rastr$ t$re# eg .ndia

2i!!i $&ties !a ed by !reight !orwarders

2i!!eren es among the ompeting p&ayers and (ario$s o$ntries o! the region in terms o! in!rastr$ t$re# d$ties# pro esses making integration di!!i $&t 2e &ining pro!its ne essitated de(e&opment o! s$ h integrated !a i&ities S/0 integrated &ogisti s riti a& to de(e&opment o! door5to5door distrib$tion network in Asia5Pa i!i So !irms generated high (o&$me b$siness that had moderate ret$rns Traditiona& FF b$siness margins was &ess than 2= b$t this was easier to pra ti e

>at$re o! ompetition in the Asia5 Pa i!i region

/ompetition a ross the region had in reased d$e to Local FF providers5 on entrated on &ower end o! physi a& goods distrib$tion market as they had (ery &itt&e or no .T and S/0 apabi&ities Integrators5 embarks on door5to 5door physi a& distrib$tion o! goods # e!!e ti(e&y $tting into traditiona& FF market

 Third-party outsourcing agents5in &ate +,?0s and ear&y +,,0s# some ind$stries(F0/)# hemi a&# a$tomoti(e# et ')had o$tso$r ed their S/0 &ogisti s !$n tion gi(ing the opport$nities to third party pro!essiona&' IT service providers5integrated downstream by p$r hasing !orwarding or distrib$tion b$siness Consultants5o!ten with .T ser(i e pro(iders a @$ired FF ompanies Other FF competitors5enhan e ore FF de&i(erab&es thro$gh a Aone stop5shopB on ept

5' CD(er the years 6$ehne and >age& has adapted its s$pp&y hain to maintain a strong position in a&& regions and a ross a&& ore b$siness a ti(itiesE' *%p&ain'
Among the !irst to introd$ e modern EuroLogistics# re ognised as one o! the most important prod$ ts in the transport market' -e ogni8ed the opport$nity in A4nited *$ropeB and e%panded rapid&y into *$rope and the Ameri as reating a wor&dwide network' Took the !irst step towards b$i&ding $p the air!reight se tor by setting $p its own Far *ast operation' .t be ame the !irst )erman !orwarder to a @$ire an *&e troni 2ata Pro essing (*2P) system' Be ame a &eading !orwarder in pro:e t !orwarding by .n reasing shareho&dings in the &arger !orwarding ompanies in *$rope and setting $p ind$stria& p&ants wor&dwide' *&e troni data inter hange (*2.) ser(i es were ontin$a&&y $pgraded and o!!ered e&e troni &inks between 6> and $stomer sites

/ontd''

*%panding ore b$siness a ti(ities a ross a&& spheres o! S/0 ranging !rom o ean5 !reight to pro:e t !orwarding ser(i es' Air!reight# road# rai&# and &ogisti s# together with a range o! spe ia&ist ser(i es' Pro:e t !orwarding a ti(ities o(ering the de&i(ery o! shipments to port by rai&# road or in&and waterway# e%port pa king# port hand&ing# storage and FDB de&i(eries# in addition to a host o! other ser(i es' Air!reight ser(i es in &$ded maintaining a wor&dwide network# pro(iding high5 !re@$en y ser(i es to key destinations# ombined sea5air ser(i es# and the pro(ision o! air ra!t and ship spare parts and harter ser(i es' 1ogisti entres o! ompeten e were de(e&oped a ross !o$r key se tors7 ons$mer e&e troni s and high5te h prod$ tsF the a$tomoti(e ind$stryF hemi a& and ind$stria& goods and ons$mer d$rab&es# and a range o! &ogisti s ser(i es' 6> a&so s$pp&ied some .T so&$tions to $stomers in ontinenta& *$rope and made e%tensi(e $se o! modern in!ormation and omm$ni ations te hno&ogy# whi h &ed to de(e&oping S/0 apabi&ities !or potentia& e%port to other regions ser(i ed by 6>'

C6$ehne and >age&Es Asia5Pa i!i operation was not omprehensi(e eno$gh to gi(e omp&ete geographi a& o(erage within the regionE' 2o yo$ agree with the statementG *%p&ain'
0eager abo$t += attrib$ted towards o(era&& b$siness' Dperation was &imited to sea and air!reight distrib$tion on&y(port5to5port apabi&ity)' Ser(i es !rom port5to5interior were high&y &imited' S/0 apabi&ities were &imited by the nat$re o! the physi a& FF ser(i es o!!ered' Pan5Asia5Pa i!i pro(ision o! S/0 &ogisti s ser(i es was# on the who&e# somewhat s$per!i ia&' 4nab&e to pro(ide Aone5stop5shopB S/0 &ogisti s ser(i es to ompanies whi h re@$ire a pan5regiona& so&$tion'

H'7 CThe !$t$re strategi dire tion o! 6$ehne and >age&Es Asia5Pa i!i operation presented se(era& prob&ems and opport$nities to 2o&derE' ;hat do yo$ think were these prob&ems and opport$nitiesG

Prob&ems
! limited nature o! 6>Es ser(i es beyond ports was inade@$ate to meet growing demand !rom 0>/s !or !$&& FF ser(i es ! 2emand !or S/0 ser(i es was &ike&y to in rease as many 0>/s had identi!ied Asia5 Pa i!i as a &$ rati(e !$t$re region post5Asian e onomi risis re!orms " the in reasing n$mber o! s$ ess!$& indigeno$s Asia5Pa i!i 0>/s whi h o$&d ha(e be ome a Missed Opportunity to 6>

! 9ast di!!eren es between o$ntries in the region made it inherent&y di!!i $&t !or 6> and other ompetitors to de(e&op integrated S/0 &ogisti s apabi&ities7 Wealthy Democracies o! <apan# A$stra&ia and >ew Iea&and# the Trading Tigers o! Singapore and 3ong 6ong# the Burgeoning Industrialist nations o! Taiwan# 6orea# 0a&aysia# Thai&and# Phi&ippines " the Future Powerhouses o! /hina# .ndia and .ndonesia ! S/0 apabi&ities were riti a& to the ad(an ement o! door5to5door distrib$tion ser(i es thro$gho$t the Asia5Pa i!i # as pro!it margins a ross the FF ind$stry were in de &ine ! /ompetition a ross the region had in reased to in &$de &o a& FF pro(iders# integrators# third5party o$t5so$r ing agents# .T ser(i e pro(iders# ons$&tants and other FF ompetitors

Dpport$nities in Asia5Pa i!i

*ntry o! more " more 0>/ s " reating demand !or &ogisti s ser(i es' 3$ge si8e o! the Asia5Pa i!i both in terms o! pop$&ation and geographi a& distan e# &ong5term $pward e onomi growth potentia& and the re&ati(e&y $nderde(e&oped nat$re o! physi a& goods distrib$tion ind$stries 5 ma:or growth opport$nities !or 6>' .n &ine with g&oba& trends# in reased /$stomer sophisti ation and greater emphasis on S/0 and .TJ.S5re&ated b$siness so&$tions in the physi a& goods distrib$tion market

Possib&e A&ternati(e strategies !or 6>

Strategi A&&ian e with e!!e ti(e " e!!i ient 3rd party integrators !or pro(iding omp&ete S/0 &ogisti s ser(i es to the &ients' 2e(e&opment o! Cone5stop5shopE &ogisti s ser(i es by $sing o ean !reight# pro:e t !orwarding# rai&# road " air!reight' Pro(iding region spe i!i S$pp&y hain so&$tions'

D$r re ommendation
/ombination o! strategy 2 " strategy 3' -easons 5 For greater ontro& 5 For ma%im$m $ti&i8ation o! opport$nities in Asia Pa i!i market'