“We consider the acquisition of Link Logistics to be a further strategic step for the global expansion of our perishables logistics operations”, said Tim Scharwath, Executive Vice President Air Logistics, Kuehne + Nagel International AG. “It will help accelerate our growth in this business segment and besides Europe we can also even better serve our customers in the Asian and Middle East perishable segments. In addition, jointly we can strengthen our position in the Australian airfreight market.”

Based on the logistics provider's own 'KN PharmaChain' product, the Kuehne + Nagel specialists collaborated closely with the customer to develop a solution that ideally fulfills all requirements. 'KN PharmaChain' is a Europe-wide overland transport service for pharmaceutical products.

The service is constantly further developed and expanded. It uses state-of-the-art refrigerated trailers which permit exact temperature control and efficient double-stack loading. The majority of the tractor units conform to the Euro-5 standard. The network, which is certified in accordance with Good Distribution Practice-Standards (GDP), guarantees an unbroken refrigeration chain in road transport.

In the solution that has been developed, the shipments originating from various Roche production plants are consolidated by Kuehne + Nagel and transported to Greece under temperature controlled conditions. Compared with air transport, substantially less fuel is consumed for the same distance. Furthermore, the passive temperature control packing, which was previously required, is no longer needed, thus reducing the volume of the shipment as well as saving packing material. As a result of these measures, the CO2 emissions are reduced by around 85%. The remaining CO2 is offset by a project of the organisation myclimate, which is being financed with a one-time payment by Kuehne + Nagel.

"The implementation of this project is the result of a close partnership in the fields of sustainability and green logistics," says Dirk Reich, Executive Vice President and member of the Management Board of Kuehne + Nagel International AG. "This clearly shows that Roche and Kuehne + Nagel do more than pay lip service to the protection of the environment," he adds.

“Being chosen by Hill-Rom to receive this award is a considerable honor,” said John Hextall, President of Kuehne + Nagel North America. “This award is the result of the cumulative efforts of the Kuehne + Nagel global organization to implement, manage and exceed Hill-Rom's international transportation requirements.”

About Hill-Rom Holdings, Inc.
Hill-Rom is a leading worldwide manufacturer and provider of medical technologies and related services for the health care industry, including patient support systems, safe mobility and handling solutions, non-invasive therapeutic products for a variety of acute and chronic medical conditions, medical equipment rentals and information technology solutions. Hill-Rom's comprehensive product and service offerings are used by health care providers across the health care continuum and around the world in hospitals, extended care facilities and home care settings to enhance the safety and quality of patient care. www.hill-rom.com

The facility is equipped with Kuehne + Nagel’s state-of-the-art information and warehouse management systems guaranteeing efficient management of 6,000 stock-keeping units (SKUs) and 1,200 pallets for Bonfiglioli. Kuehne + Nagel provides a team of dedicated staff handling the business for the customer.

“Having the new plant’s operations managed by Kuehne + Nagel has enabled us to improve our day-to-day logistics performance and to further enhance our service for our customers,” said Andrea Genuini, General Manager of Bonfiglioli Transmission Pvt. Ltd.

“We are very pleased to be a partner of Bonfiglioli in India,” said Volkmar Mueller, Managing Director of Kuehne + Nagel Pvt. Ltd. “With our worldwide network and logistics expertise, local know-how and advanced information systems, we are well positioned to provide first-class services in this important market."

The storage capacity at Kuehne + Nagel’s state-of-the-art warehouse at Dubai Logistics City will be extended and is scheduled to be operational in the second semester of 2012. Embraer will benefit from the unique logistics platform and Kuehne + Nagel’s industry expertise in aviation logistics.
 
“To support the growing fleet of E-Jets in the Middle East, local partnerships have already been announced with Egyptair, in Egypt, as an Embraer authorised service center. By opening this new support base to customers, we will bring spare parts inventories close to them, improving our level of service,” said Mathieu Duquesnoy, Embraer Vice President Commercial Aviation, the Middle East and Africa. “The Dubai distribution center will allow us to improve parts and components availability, as well as the delivery process to customers in this growing region, as we were committed during the Embraer Operator Conference which took place in Amman, Jordan, on last October.”

“We are delighted that Embraer decided to extend the global relationship by entrusting us with their spare parts logistics in the DLC facility,” explained Werner Kleymann, Regional Manager of Kuehne + Nagel in the Middle East, Central Asia and Turkey. “This is an important development for our aerospace logistics business in the region,” he added.
 
Within the scope of its “Supply the Sky” program, Kuehne + Nagel offers an integrated range of logistics services for the aerospace industry. The company develops and delivers customised aerospace solutions for manufacturers, leasing companies, airlines and service providers in the field of maintenance, repair, overhaul, ground handling and in-flight services.

Karl Gernandt, Chairman of Kuehne + Nagel International AG said: “Kuehne + Nagel is committed to abiding by all antitrust laws and regulations. I reconfirm that we continuously develop and reinforce our compliance program to always ensure compliance with the highest available standards. The Court’s approval of the plea agreement today marks the final conclusion of the U.S. antitrust investigation of Kuehne + Nagel commenced in 2007.”

The products are delivered from the Danone factories and picked based on customer orders with modern pick-by-voice technology. Both facilities are temperature-controlled and feature efficient racking solutions like gravity racks. The operation runs 24 hours per day on 3 shifts. Kuehne + Nagel developed customised interfaces to link its warehouse management system to Danone’s existing IT architecture. Apart from Poland, Kuehne + Nagel provides logistics services for Danone in many strategic markets such as in France, Ukraine, Brazil and Italy.

“Co-operation with Kuehne + Nagel, a strong partner in logistics  supporting us with high quality facilities and services, is crucial for our logistics efficiency as well as for our products out-of factory quality management to ensure our consumers satisfaction,” commented Frank Uszko, Managing Director of Danone in Poland and the Baltics.

“We are very pleased to strengthen and extend our partnership with Danone in Poland. It is our priority to ensure high quality and flexible logistics services. Focused on advanced information systems and the use of project management tools and methodologies, Kuehne + Nagel ensures value-added logistics processes for Danone in particular and the demanding FMCG sector in general,” added Tobias Jerschke, Managing Director of Kuehne + Nagel in Poland.

Kuehne + Nagel Group

CHF million

Jan-Sep 2011

Jan-Sep 2010

Turnover

14,598

15,178

Gross profit

4,380

4,453

Operational result (EBITDA)

728

746

EBT

579

572

Net earnings

454

449

Seafreight
During the first nine months of 2011, Kuehne + Nagel increased its seafreight volume by 11.4 per cent. Thus, the Group clearly outperformed the global container market growth, estimated to be around 5 per cent after volume growth dropped further during the third quarter. Leveraging its value-adding product portfolio, Kuehne + Nagel achieved highest growth in Asia outbound trades, especially to the Middle East and South America. Following the expansion of its specialised network for perishables in reefer containers, volume in this Kuehne + Nagel segment grew significantly as well. Despite slightly lower margins due to very low freight rates in the third quarter of 2011, EBITDA-to-gross profit margin stabilised at 35,3 per cent on a very high level (previous year: 35.8 per cent) in the first nine months of 2011. The operational result remained at the previous year’s level.
 
Airfreight
In airfreight, Kuehne + Nagel increased its tonnage by 14.5 per cent in the first nine months, although growth in the international airfreight market considerably slowed down in the last months. Compared to the same period in 2010, market freight volumes stagnated. Kuehne + Nagel performed particularly well in Europe, South America and North America, whereas demand in Asia declined. Investments in the development of solutions, tailored to specific industries, such as pharmaceutical and high-tech, were compensated by improved productivity. As a result, EBITDA-to-gross profit margin increased from 30.5 per cent in 2010 to 32.3 per cent in 2011. EBITDA was improved by 13.1 per cent.

Road & Rail Logistics
In the first three quarters of the year, Kuehne + Nagel’s European overland activities recorded a growth in net turnover of 4.9 per cent (currency adjusted: 19.4 per cent.) The company continued to invest into the expansion of its European groupage network and at the same time focused on the development of road logistics services in markets outside Europe. Through the acquisition of Grupo Eichenberg, Brazil, Kuehne + Nagel has gained access to the South American overland market. Currency adjusted, the operational result was slightly above the previous year’s level, EBITDA margin decreased from 1.7 to 1.4 per cent.

Contract Logistics
In contract logistics, net invoiced turnover declined by 5.7 per cent (currency adjusted: increased by 7.9 per cent). Focal point of the business unit’s strategy has been the expansion of services for multinational customers and the consolidation at strategic logistics hubs. Furthermore, the integration of contract logistics services into end-to-end solutions has been an integral part of the strategic approach. The challenging market conditions in France led to margin pressure, restructuring measures and a negative impact on results. Compared with the previous year’s period, EBITDA in contract logistics was reduced by 11.5 per cent; currency adjusted it remained stable. EBITDA margin decreased from 4.1 to 3.7 per cent.

Reinhard Lange, CEO of Kuehne + Nagel International AG, said: “Considering the softening market growth, we are satisfied with our results in the first nine months of 2011. Volatility is high and the fourth quarter is expected to remain demanding. We will continue to consequently implement our growth strategy and further build on our commitment to deliver innovative, value-adding services to our customers around the world.”

“Through the acquisition of Drude Logistik we get access to a highly capable hub operation for our international groupage activities. Drude Logistik fully meets our requirements regarding expertise, geographical position and infrastructure”, said Dirk Reich, Executive Vice President, Kuehne + Nagel International AG, responsible for Road & Rail Logistics. “Acting as our new Eurohub, it enables us to increase the number of departures, reduce lead times and achieve a better capacity utilisation due to a consistent consolidation and overnight transshipment operations. As a result, all Kuehne + Nagel locations linked to the Eurohub will benefit from improved service levels. The new routing via the Eurohub will be finalised until mid 2012”.

Currently, Kuehne + Nagel’s European groupage network has established line services between 38 countries across the continent, routed via its central hub in Haiger, Germany. Due to capacity constraints, this location does not allow any further expansion of international groupage activities.

In Germany, Kuehne + Nagel will continue to partner with the German groupage network IDS, covering 11 of its franchise areas. The national IDS hub is located in Neuenstein-Aua.

The agreement is subject to approval of the antitrust authorities. Both parties agreed to not disclose the pruchase price.

Contecar, a 90 hectare private port facility located near the harbour entrance and industrial zone, is currently being upgraded for the handling of 12,000 TEU ships by 2013. As a result of the investment programme, the port is able to significantly participate in the growth, generated by the Panama Canal expansion, expected to be finalised in 2014, one hundred years after the canal’s opening.

At this strategic location, Kuehne + Nagel will support its customers in optimising costs and processes along their supply chains. The consolidation of seafreight consignments, for instance, allows for shorter transit times to several destinations.

“With this new logistics facility in Cartagena, we have realised a further major step in our strategy to strengthen our activities in Colombia,” said Karl Gernandt, Chairman of Kuehne + Nagel International AG at the opening ceremony. “Our operations in combination with the port’s efficiency will strongly support Cartagena’s vision of becoming an important global logistics hub by providing integrated logistics solutions as well as delivering cutting-edge logistics engineering, technology and management.”

Since Kuehne + Nagel’s wholly owned subsidiary in Colombia was founded in 1988, it has strongly been involved in Colombia’s logistics development. Today, the national network consists of 8 branches across the country and is operated by 475 employees. In the scope of its growth programme, in January 2011, Kuehne + Nagel has acquired two successful Colombian companies, Translago S.A.S. and Agencia de Aduanas Excelsia Ltda., specialised in perishables logistics. Through the integration of the two companies Kuehne + Nagel considerably strengthened its position in the South American perishables logistics segment.