The Kuehne+Nagel Group (the Group) delivered a very strong result in 2021 in a business environment characterised by the uncertainties of the COVID-19 pandemic and by highly strained supply chains. The Group confirmed its global leading position in Sea Logistics with 4.6 million TEUs managed in container traffic and its leading market position in Air Logistics with 2.2 million tons where significant volume growth and improved profitability can be reported. Results in Road Logistics and Contract Logistics increased steadily over the course of the year and delivered consistently to the success of the Group.
Kuehne+Nagel’s service offering is specialised in managing complex end-to-end supply chain solutions within a global network, controlled by Logistics Control Towers and executed by all Kuehne+Nagel business units. These integrated logistics solutions not only increase transparency and efficiency in the supply chain but also optimise the information flow between the service partners and customers. This allows Kuehne+Nagel to support and add value to its customers’ value chain, a key factor in a highly competitive and fast growing market.
In 2021, the world economy experienced a global economic rebound with an estimated growth of 5.5 per cent after the recession caused by COVID-19 the year before (2020: -3.4 per cent growth). While the recovery was temporarily negatively impacted by local lockdowns and reduced overall activity, the global economy has gained momentum to reach pre-pandemic levels. For 2022, global growth of 4.1 per cent is forecasted. (Based on: World Bank, Global Economic Prospects, January 2022)
In 2021, the international logistics industry experienced world trade volume growth above the level of 2020 with an estimated increase of 9.3 per cent in 2021 versus -8.2 per cent in 2020. (Based on: IMF, World Economic Outlook Update, January 2022)
Logistics operations were shaped by disruptive events in global supply chains – some due to the COVID-19 pandemic and some due to operational bottlenecks in carrier, port and trucking operations. On the sea- and airfreight carrier side, the market in 2021 was characterised by a significant increase in freight rates caused by capacity shortages due to supply chain disruptions and operational inefficiencies. This drove a severe cost increase effect with respect to the Group’s operational efforts to execute shipments, but also a significant expansion of gross margins.
Kuehne+Nagel‘s volume grew in line with the market. In combination with the large increase of freight rates, net turnover was 60.9 per cent greater than in 2020. Gross profit increased by 32.4 per cent and the Group was able to increase EBIT by 175.3 per cent in 2021.
The Group continued executing in-line with its strategy Roadmap 2022 presented at the Capital Markets Day 2017 with a focus on creating additional value through customer excellence, expansion into new services and leveraging the Group’s strengths to extend from supply chain to value chain services. The ambition is to create sustainable growth in gross profit with new value chain services and selective acquisitions to leverage synergies and expertise. The overall aim is to reach an EBIT to gross profit margin (conversion rate) for the entire Group in excess of 16 per cent by 2022.
In the last year, the Group had to repeatedly shift the focus to the operational challenges to ensure and deliver customer excellence. However, the Group is well on track in the program and will reach its ambitions in digitisation as a game changer for productivity and market offering, investments in new opportunities connected to value expansion, acquisitions as an accelerator and continuous service excellence for customers.
Kuehne+Nagel is transitioning to a zero carbon business model and is driving a global zero carbon future for its customers by addressing the carbon dioxide equivalent footprint (CO2e) of the transportation services involving its suppliers: airlines, shipping lines and haulage companies. Since 2020, Kuehne+Nagel is shipping all Sea Logistics less-than-container-load (LCL) shipments CO2e neutral by compensating through nature-based projects.
A building block in Kuehne+Nagel’s business strategy is proactively addressing climate change by measuring CO2, reducing CO2 when possible with low-carbon fuels and compensating for CO2e. The Group has invested in various nature-based CO2 compensation schemes, where carbon is being removed from the atmosphere. The emission credits obtained are in accordance with the highest international standards.
The Group’s sustainability report addresses in detail Kuehne + Nagel’s commitment to the principles of sustainable business practices and performance for the respective calendar year.