ANNUAL REPORT 2011 - Kuehne + Nagel

22 REPORT OF THE BUSINESS UNITS
Seafreight: Number of TEU handled exceeds 3 million mark for the first time
In 2011, Kuehne + Nagel maintained its growth momentum in seafreight, handling more
than 3 million TEU; an increase of 327,000 TEU (11 per cent) compared with the previous
year. With a growth rate twice as high as the market and its high operational productivity,
the company was able to compensate for currency effects and costs of investments in
growth initiatives. The operational result was stable at the previous year's level.
Slowdown of growth in international container traffic
After the strong recovery in 2010, the global container market
recorded a volume growth of between 5 and 6 per cent in 2011,
with stronger gains in the first half of the year.
The volatile economy in the United States resulted in a de -
creased container volume from Asia, but, on the other hand,
American shippers were able to increase their export business to
Europe, Asia and Latin America by more than 7 per cent.
The world’s biggest market, intra-Asia, grew in terms of volume
by roughly 9 per cent. Growth on the trade lanes from Asia to
Europe amounted to just around 3 per cent, whereas container
traffic from Europe to the Far East increased by 8 per cent.
The Latin American trades again achieved double-digit growth
on both the import and export side, the latter being driven by
the high demand for South American agricultural products.
Shipping companies
Global vessel carrying capacity expanded by approximately
9 per cent in 2011. Numerous shipping lines launched vessels
with capacities in excess of 13,000 TEU. As a result, particularly
in the trade lanes from Asia to Europe, growth of capacity outstripped
demand.
The high oil price forced carriers to operate under the “slow
steaming” programme. Although this measure lengthens transit
times, the positive effect is a substantial cut in CO2 emissions,
particularly for the largest vessels. Kuehne + Nagel is making
increased use of these services for its customers.
Freight rates
Slowing demand in combination with additional capacity led to
a significant decline of freight rates in almost all trades during
2011.
Impressive growth of Kuehne + Nagel transport volume
Kuehne + Nagel again achieved double-digit growth in 2011. The
increase in volume in most trade lanes is largely a result of network
expansion, innovative IT solutions and major new business
wins. Highest growth rates were recorded in the Asian trades. In
the transpacific lane, Kuehne + Nagel expanded its volume by
more than 15 per cent despite market contraction. In non-European
trade lanes, a volume increase of 16 per cent was achieved,
which is mainly attributable to the company's global network and
its focused sales efforts.
LCL
The LCL (Less-than-Container-Load) segment, an important part
of the seafreight business unit, performed very well in 2011
thanks to the establishment of new gateways in Asia, North and
South America and Europe. The Group’s own network and the
associated new routes were more closely meshed, resulting in a
more efficient cost structure, a shortening of transit times and
improved data quality.
River shipping
In 2011, Kuehne + Nagel’s river shipping organisation again made
an essential contribution to the environment-friendly management
of the growing volume of goods traffic. Improved results were
achieved in both container and dry goods shipping. In addition,
the company focused on the expansion of the Rhine-Main-Danube
services as far as the Black Sea.
Specialised services
Kuehne + Nagel's services for special product groups are well
accepted by the market. In the worldwide shipment of forestry
products (paper, cellulose and timber), the company continued
its growth course in 2011.
By acquiring a 75 per cent share in Cooltainer, New Zealand's
leading operator in reefer container transportation, Kuehne +