Digitalization at Heart of Evolution

Q: What areas is Kuehne+Nagel prioritizing as it looks to the future and how will these impact customers?

A: Kuehne+Nagel has over 125 years of history and while we are proud of our past, we are aware that we have to evolve to continue growing. Therefore, the hottest topic for Kuehne+Nagel is digitalization. We are creating partnerships to develop solutions for digital applications, visibility and quotations, which will make our processes much faster. Customers can get a quote and make a booking in less than three minutes on our web solution, called KNFreightNet. Air freight is always urgent, but there are varying levels of urgency so we can use KN Express, KN Expert and KN Extend to estimate arrival times and provide the speed of service that suits clients’ needs.

Q: How important are Kuehne+Nagel’s Mexico operations to its global position?

A: Kuehne+Nagel’s Mexican offices turn 50 years old in 2017. Mexico is among our Top 10 countries for year-on-year growth. We see encouraging trends in the country even after considering the macroeconomic situation. We grew by 11.5 percent in the Mexican airfreight export market in 2016 and now we hold 9.5 percent share for Mexican exports. This market is extremely competitive. Unlike other countries where one company monopolizes the market, the top three logistic companies in Mexico have a similar market share.

Globally, air freight expanded by 1 or 2 percent in 2016 but Mexico grew by almost 14 percent, according to IATA. Last year, we moved over 40,000 tons of imports and exports in the country. Of this total, aerospace represented a single-digit share. While this may seem like a small figure, it is representative of the industry’s year-on-year growth and demand for specialized solutions. The aerospace manufacturing industry is one of Kuehne+Nagel’s key focus areas not only in Mexico but around the world.

Q: What growth strategy is Kuehne+Nagel implementing in the country?

A: Our strategy, called Mexico 2020, is to provide industry solutions to all market sectors but especially focused on industries that demand specialized solutions, such as perishables, pharma, automotive and aerospace. We expected to transport 52,000 tons by 2020 but our most recent data shows we can expect to reach this milestone by 2018.

Q: What were the main drivers of Mexico’s accelerated growth in comparison to global trends?

A: Perishables are the main drivers for growth in air freightrelated exports. Last year, Mexico experienced a boom in avocado exports, which greatly helped the air freight market. Another area that is supporting cargo exports is the growing Mexican manufacturing sector, mainly automotive. Kuehne+Nagel is especially interested in supporting manufacturing companies in the aerospace industry, which requires a specialized service. Aerospace components cannot just be placed in an airplane for transport. They require specific processes for packaging plus land and air transportation. Furthermore, the process is different for each individual aircraft part to be shipped. To support the sector, we introduced the product Supply the Sky, which comprises a series of services for the entire supply chain including KN Engine Chain.

Q: What are Kuehne+Nagel’s expectations for the Mexican market considering the economic and political climate?

A: In the first quarter of 2017, the Mexican export market slowed in comparison to the same period in 2016. Today, market expectations are positive and we expect Kuehne+Nagel to grow at least 7 percent in 2017. We expect that the Mexican market will grow at a faster pace than the global average. The country’s aerospace sector exported US$7.5 billion in 2016 and the sector expects to export US$12 billion by 2020. Kuehne+Nagel still has room for growth in the local aerospace industry and we expect to grow our export tonnage in aerospace by 40 percent in 2017.