Global Experience to Support Local Growth

Q: What is Kuehne+Nagel’s national strategy for the Mexican aerospace market?

A: The aerospace market is very attractive and the need for specialized logistics solutions will become more pressing when considering the market’s expected doubledigit growth. Globally, we are placing great importance on the aerospace sector and on being recognized as a specialized logistics supplier that understands the vertical needs of several industries.

One of Kuehne+Nagel’s specialized products for the aerospace industry is KNEngineChain, a product designed for turbine transportation and engines, which is now available in Mexico after an extensive internal certification process. We also are implementing specialized services in this area for Mexico to deliver differentiated value along the entire aerospace supply chain, from MRO services to Aircraft on Ground operations. An optimal combination of sea freight, airfreight, warehousing and trucking will be vital to develop a competitive strategy for the aerospace sector.

Kuehne+Nagel’s core differentiator is the consolidation of different commodities from various industry verticals, converting them into the best possible service and cost conditions. Globally, more than 70 percent of air cargo is consolidated but the combination with different products can be a plus for some industry verticals. In Mexico, we are targeting markets such as automotive, pharmaceuticals, perishables and obviously aerospace.

Q: What is the company’s sector penetration?

A: In Mexico, aerospace is not our most representative vertical in terms of cargo tonnage but it is attractive due to interest in this area from the country and also in the US. As US production keeps growing so will ours. Some Mexican aerospace clusters have ambitious plans for the construction of an airplane in Mexico, which would be a great opportunity for us. The aerospace industry frequently requires specialized logistics products because aircraft parts often require urgent delivery to avoid the expensive costs of having an airplane out of operations. Aerospace represents only 1 percent of our total airfreight business composition, transporting almost 500 tons of cargo. This is obviously well below the industry's potential. We expect our aerospace revenue to grow 30 percent this year.

We are making a significant investment to develop our aerospace participation by training and certifying our personnel. Through events, cross-selling among other worldwide Kuehne-Nagel offices and customer visits, we continuously communicate what Kuehne+Nagel can do for the sector, the shelters and for the aerospace clusters.

Q: Why is connecting the clusters important and how will the company achieve that?

A: The lack of connection between Mexican aerospace clusters translates to significant costs and logistics inefficiencies for customers. By connecting the clusters, we can generate a better and more cost-effective solution for all involved parties. Queretaro is definitely a focus for us so we have placed a key account manager for the aerospace industry in the state but the US-Mexico border area is also a key in our strategic plan.

Aerospace customers usually demand special services such as next-day deliveries, expedited solutions and 24- hour customer service. These are common in the industry but not always cost effective, leading local clients to rely on expensive courier services to handle simple logistics requirements. Again, we see the US-Mexico border as the center of many logistics opportunities so the company will open in 2017 a new office in Chihuahua with a complete commercial and customer service structure to deliver all local market logistics requirements and connect Chihuahua’s cluster to the rest of our network.

Q: How can Kuehne+Nagel help its clients to optimize their logistics and save costs?

A: We can connect Mexican companies through our gateways in Mexico, such as Mexico City and Guadalajara, as well as through US cities such as Los Angeles, Dallas and Houston. Kuehne+Nagel is always developing services and routes to increase logistics alternatives for the Mexican aerospace market.