ANNUAL REPORT 2011 - Kuehne + Nagel

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REPORT OF THE MANAGEMENT BOARD
Stronger global competitive position
The Kuehne + Nagel Group achieved a number of important objectives in 2011:
In sea and airfreight highly profitable growth above market average was realised.
In overland transport strategic acquisitions contributed to the increase in tonnage,
while in contract logistics the foundations were laid for a sustained improvement
of profitability. The investments made in 2011 in emerging countries such as Brazil,
China and Colombia fostered the extension of Kuehne + Nagel’s global competitive
position. Although the result for the year was adversely affected by the strong
Swiss franc, it underlines the Group’s strengths and capabilities.
Economic environment
In 2011, the Kuehne + Nagel Group operated in a market environment
which was influenced by divergent economic developments,
political unrest and natural disasters. This called for high
flexibility and operational efficiency in the provision of services,
a clear focus on growth regions and segments, and a synchronisation
of activities in the global network. Whereas at the beginning
of the year, market volumes in sea and airfreight were in
line with forecasts, growth slowed from the second quarter
onwards. Overcapacities resulted in a deterioration of freight
rates in sea and air transport, which in turn increased the pressure
on margins. In overland transport, capacity shortages led to
higher prices. In contract logistics the growing uncertainty
which affected planning in trade and consumer sectors was
reflected in the reduction in the movement of goods.
For globally operating logistics providers like Kuehne + Nagel
numerous business opportunities presented themselves in emer -
ging countries, whose economies continued to grow at a
dynamic rate.
Growth programme implementation well on track –
future-oriented investments
In 2010, Kuehne + Nagel launched a strategic growth programme.
Its aim is to outpace market growth in all business units, and
substantially expand the business activities by 2014. The expansion
plans are supported by investments in product development,
sales and in the extension of activities in emerging countries
and niche segments. In addition, a substantial increase of
the overland transport operations is envisaged.