ANNUAL REPORT 2011 - Kuehne + Nagel

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Report of the Business Units _ _ _ _ _ _ Road & Rail Logistics
Road & Rail Logistics: Consistent strategy implementation
leads to substantial volume growth
The targeted expansion of activities in the segments groupage, full and part
load and industry-specific distribution is reflected in the net turnover, which in local
currencies increased by 19 per cent compared with the preceding year.
Development of European road transport
While volumes in the European overland transport market
increased in the first half of the year, a reduced demand was
experienced in the second half, resulting in a market growth of
around 5 per cent in 2011. Providers had to cope with high price
pressure as a result of the constant rise in fuel costs, and shortage
of both transport capacity and drivers.
Kuehne + Nagel recorded a favourable volume development in
European overland transport. The expansion of the service portfolio
and the customer-oriented services in the groupage, full
and part load and industry-specific distribution segments contributed
towards a 10 per cent volume increase. The investments
in further enhancing the density of its overland transport network,
product development and process optimisation, however,
affected the operational result.
European groupage network
In 2011, Kuehne + Nagel increased its volume by 15 per cent
(groupage market: 5 per cent) and handled 17 million national
and international groupage shipments.
The main impetus for the above-average volume growth came
from the British groupage provider RH Freight, acquired in April
2011 and consolidated since that month. RH Freight, which is
represented in 17 locations in the United Kingdom, handles
roughly 425,000 shipments each year at its two freight terminals
in Nottingham and South East London and operates daily
services to 32 European destinations. In addition, Kuehne +
Nagel benefited from further improvements in its service offering.
The unified Europe-wide product portfolio “KN Euroline”,
which targets the individual customer needs, was launched in
January 2011 and met with rapid acceptance. The increased
number of scheduled international lines from 300 to 370 resulted
in a higher departure frequency and shortening of transit times
within the network.
Establishment of a Eurohub in Bad Hersfeld
In October 2011, through the acquisition of Carl Drude GmbH &
Co. KG, Kuehne + Nagel gained access to a highly capable hub
operation for international groupage activities in Hauneck/Bad
Hersfeld in the German state of Hesse.
From mid-2012, daily lines to 50 European economic centres will
be operated via this central hub. Consistent cargo consolidation
and overnight transhipment operations will increase departure
frequencies and reduce lead times. In addition, capacity utilisation
will be optimised.
Development of land transport outside Europe
Kuehne + Nagel invested not only in increasing the density of
its European groupage network, but also in the expansion of its
road logistics services in growth regions. With the acquisition of
the Brazilian Grupo Eichenberg it made an entry into the South
American overland transport market. This company, headquartered
in Porto Alegre, is one of the leading providers of overland
transport services in the Brazilian domestic market as well as in
the Mercosur zone to and from Argentina, Chile and Uruguay. In
China Kuehne + Nagel started to develop a national network. At
present, there are regular services between eight major Chinese
cities; further lines will be added in the course of the current
business year.
Full and part loads
The investments made in the continuous expansion of the full and
part load business are bearing fruit. In 2011, the transported
tonnage increased by more than 17 per cent, corresponding to
120,000 full loads. In addition, roughly 1.2 million part loads were