Despite the challenges of 2020 due to the COVID-19 pandemic, the year has proven the value of airfreight, supporting express deliveries of holiday gifts and just-in-time shipments to keep factory lines moving, and providing rapid transport of personal protective equipment (PPE) for health care workers caring for those affected by the virus. The past year has spotlighted the industry for outside observers, even as it has presented various operational challenges. Flights have been canceled, travel restrictions have been enforced around the world, and disruptions in other transport modes push demand toward air although capacity remains scarce on many trade lanes.
This year is coming to an end, but air cargo may face its greatest challenge yet in the months ahead. Billions of people are relying on the logistics industry to safely distribute doses of the vaccines now in their final stages of regulatory approval, and many doses will make at least part of the journey by airfreight. With so many of the specific transportation requirements still unknown, industry leaders are called to rise above any adversity in service to the great task of global vaccination.
In this year’s survey of Air Cargo World readers, respondents recognized the difficulties posed for global supply chains. Considering the many obstacles executives have risen above in 2020, and the task ahead in 2021, Air Cargo World has selected three air cargo executives who we expect to guide their companies through the challenges of 2021 and beyond.
In the second of three parts of this feature, Air Cargo World profiles Kuehne + Nagel’s Yngve Ruud.
Yngve Ruud: Kuehne + Nagel stays the course
“Adaptability” has been a watchword for 2020, with canceled flights and sailings, and a demand surge for shipments of masks, gloves and other PPE that was certainly unforeseen a year ago. However, Swiss freight forwarder Kuehne + Nagel drew up its five-year plan in 2017, well before the pandemic, and Executive Vice President for Air Logistics Yngve Ruud credits a large part of the 3PL’s 2020 success with the strategic decision to follow the plan through the year’s upheaval.
The five-year plan runs through 2022 and is centered around three touchstones: customer, people and technology. The basics of that plan have so far helped see the company through an extraordinarily difficult year. Despite the difficulties that impacted many 3PLs, particularly in the second quarter, Kuehne + Nagel’s air logistics division stood out among forwarders by recording a pre-tax year-over-year increase in net income of about 4%. The forwarder utilized the strong demand for PPE to improve results in its air division, securing charter capacity on a targeted basis during the worst of the Q2 capacity crunch.
“When in 2020 it became evident that we would have a completely different year, we made a couple of very important decisions,” said Ruud in an interview with Air Cargo World. “One of the decisions, which has been key for our success, is that we did not change our strategy.”
Ruud has spent his entire career, and then some, in logistics. With a family background in logistics, he was familiar with the industry even as a child, and began his career in his 20s by founding his own company. His business was later acquired by Kuehne + Nagel, and since then, he has acquired a lifetime of perspective on the industry. Regarding the key points of Kuehne + Nagel’s strategy, Ruud acknowledged that a stated focus on the customer is hardly unique in logistics. But what Kuehne + Nagel worked to accomplish was meeting its customers and its employees where they were as the situation changed rapidly.
“We followed a clear action plan and extensively communicated with our customers” to meet them where they were during a difficult time globally, said Ruud. “We wanted to go in as a true partner with the solution in mind, and try to create, however possible, a win-win situation.”
Dealings internally with Kuehne + Nagel employees took a similar approach, as did the focus on technology. With safety at the forefront of business planning, nearly 90% of the staff began to work virtually during the course of one weekend.
“From a technology point of view, that should have been extremely challenging, but since technology is also one of the key points of the strategy, we have been investing into robust technology that is globally sustainable,” said Ruud. “We enabled 40,000 people to work from home almost over the weekend.”
The commitment to following through on earlier strategy is also serving Kuehne + Nagel well in the lead-in to the vaccine shipment effort. The company recently enhanced its airside cool-chain facilities at Brussels (BRU) and Johannesburg (JNB) airports, adding several thousands of square meters of facility space and improving operations on the tarmac with the addition of pharma dollies. Rather than a last-minute scramble to adjust to the upcoming needs, pharma strategy investments began more than a decade ago, Ruud said.
“We have not accelerated anything in particular — we are adhering to our long-term strategy for pharma and healthcare,” said Ruud. “What we have done in the last three months is to be very specific on the COVID vaccines distribution. As you can imagine, cold-chain facilities like in Brussels, that is nothing we can set up in months.” With facility plans on schedule, the acceleration has come from Kuehne + Nagel employees and the HyperCare team established to support shipper needs around vaccines.
“If you think about it, we are distributing vaccines every year,” Ruud said. “What is different now is that it’s a more urgent way of distributing vaccines, but it’s still going to be a program lasting not only three months, six months or twelve months — it’s going to be a long-lasting program that is going to peak when it starts, but it will go into normal vaccine distribution. But since there is urgency now, we have to add additional measures, such as the HyperCare team.”