It’s one thing to survive a rocky economic period, it’s another to thrive from it. But one man who is set on making this a reality is Tim Scharwath, Kuehne + Nagel’s chief executive for North West Europe. He talks to Jessica Davies.
It hasn’t taken long for Kuehne + Nagel’s new head of North West Europe to make his mark. Not long after he took the reins from Peter Ulber on 1st January this year he let loose an aggressive expansion plan for 2009, designed to shake off the icy grip of the recession and see the company emerge even stronger. The recession struck with “brutal force”, says Scharwath, “but we can all come out of it in a positive way – if we are open to it. This spirit has already taken hold within Kuehne + Nagel.”
Scharwath has his eye set firmly on driving growth and development, and as such is running a two-pronged “dual strategy” project – the primary focus for the year. The first part of this strategy will hone in on stringent cost management; the second on expanding market share. “The first part is the easy bit,” he says, “it’s just a matter of saying no once and a while. The difficult part is growing business.”
So far it seems to be working. Earlier this year it won multiple UK contracts worth a total of £14 million (25m CHF), some £2.8m (5m CHF) of which was secured by K+N Drinks Logistics. Overall, the result exceeds that of the same quarter in 2008, he says. Also, the biggest chunk of the £14m was won through cross-selling – another area he’s keen to accelerate.
The dual strategy is integral to Scharwath’s chief goals. “It shows our customers and the market that we can manage the [economic] situation, and keep up high service levels. In times like these, it is more important than ever that we have high service levels, because it is easy for customers to go from one freight forwarder to another, especially in international forwarding.”
With customers desperate to cut back, Kuehne + Nagel has reacted by intensifying its efforts to generate cost-saving contracts, particularly via collaborative methods. The launch of its first purpose-built super shed in the UK, at Wellingborough, set the ball rolling. Hotel and restaurant giant Whitbread was the first to move in to the 500,000 sq ft shed, taking up a quarter of the site’s capacity. It now shares the site with a customer from the high-tech sector.
The concept is to bring together different customers into one large warehouse space to share synergies. “We look to join up customers – one which has its peak in summer time, the other in autumn or spring. This way they can share manpower.”
This collaborative model has already proven a success in both Germany and the Netherlands, and the plan is to now develop the project further in the UK. “The next step is to find another suitable super shed.”
Another benefit is that it enables customers to consolidate volumes and reduce transport costs. He points to the beer industry as an example of where a shared network used by different customers works well. “If you take that example through into retail and other markets, there are enormous possibilities.”
Scharwath reckons Kuehne + Nagel’s decentralised structure is one of its major strengths, and one which sets it apart from competitors. “We have 150 people who work at corporate level running a corporation of some 54,000 employees. If you compare that to DHL for example, the ratio of central and decentral abilities are very different.
“In our set-up one person has responsibility for a region or country, and can sell across the whole portfolio, whether it be for contract logistics, seafreight, airfreight, or fourth-party logistics. This means there are no silos – we have a total view.”
Now, more than halfway into his second decade at Kuehne + Nagel, he reckons the company’s decentralised structure gives him the freedom and flexibility to explore new solutions for customers.
“The responsibilities and abilities I have in my position are far superior to those that others would have in other companies – it feels a bit like running my own business.
“And it’s a very good sell to any customer if they know who it is they can discuss things with. It means you can go to a customer whether it be regarding a seafreight, contract logistics or fourth-party logistics contract and say – if you want someone to scream at, scream at me.”
