04 October 2021

EXECUTIVE INTERVIEW: Daniel Randig, Senior Vice President, Air Logistics – Middle East & Africa, Kuehne + Nagel

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How has the pandemic impacted the Cargo industry in the Middle East?

The impact was deep. No region could avoid being impacted by such an event. Being the crossroads for many trade routes, including Asia, the Middle East could not avoid having its cargo industry hit very early on the pandemic.

Air cargo flow in our region depends highly on passenger flights, so the moment the borders were closed and people could not travel anymore, the airlines had to reduce their schedule or even completely stop flights. The whole supply chain then felt the domino effect.

On the other hand, some of the carriers based here were quick to adapt and respond to market demands. For example, several of the charters Kuehne+Nagel organized to move essential products, including personal protective equipment - PPEs were done with our partners based in the Middle East who were very quick in embracing the “cargo only” pax charters.

By the way, I believe many airlines will never look at cargo as an ancillary source of revenue again.

Now, more than a year after the start it was declared a pandemic case, we see a lot of positive signs across the region. Places like Dubai, where the government took a robust and organized approach, including one of the most advanced and broad vaccination campaigns worldwide, is bouncing back much quicker. When you walk around the city, you see positive signs everywhere; real estate is at full steam. There is tourism and consumption all around. It, naturally, impacts the cargo industry positively.

Have industry players been quick to adapt technology to cater to the changing needs in the market?

The way we do business and interact with suppliers and customers have changed rapidly in the last decade and not every player has followed it. Either because they see investment in technology as a cost or because they got complacent with their legacy systems. However, the market is becoming unforgiving about it. If you look back on some of the great brands of our industry that recently vanished you will see that in most of the cases they were companies that could not operate efficiently mainly due to outdated systems.

The disruption caused by Covid-19 made it even more evident. When the lockdown mandates started and people had to work from home with no time for much planning, only a few players could quickly organize their workforce and continue to serve their customers. We at Kuehne+Nagel benefited of our long-time strategy of having a single operations platform which enables our team members to work from any part of the world. In the last years we also accelerated the digitization across the company and through our e-Touch initiatives, we’ve been automating a myriad of tasks, freeing our team members to spend more time in touch with our partners and developing solutions for our customers.

In which areas and geographies do you see strongest potential for growth?

In the last months, we have seen very strong demand for transport solutions for pharma and essential goods as well as e-commerce. Actually, we are seeing high demand from every single vertical. More recently, boosted by consumer recovery, there is also a high demand for auto parts and retail apparel.

Another point is the extra demand for air freight that is happening as collateral from bottlenecks and disruptions in the sea freight. Whether it is a blocked canal, a typhoon in Southeast Asia or a shortage of workforce at ports in North America or Asia, it will push cargo to be flown that was not initially planned.

Putting all these extraordinary events aside, we see Middle East and Africa as definitely two regions we to expect accelerated in the next years. Many countries are investing in infrastructure, which attracts even more private investments, creating more opportunities for local business development. There is optimism and concrete signs from different industries.

What technologies do you predict will impact the Cargo industry most in the next five years?

Well, we would need an entire event to talk about the changes we are seeing in our industry with the adoption and development of new technologies. From the Internet of Things to Artificial Intelligence, from autonomous vehicles to face recognition and blockchain, companies in every corner of the world are looking for ways to improve the cargo industry. The challenge of any technological innovation is to demonstrate its feasibility and return on investment within the accepted timeframe of the stakeholders. The goal is to find practical solutions that will impact productivity and enhance safety.

In that sense, I believe technologies that bring transparency and speed in access to data, such as intelligent labels, will become part of our routine very soon. The broader adoption of 5G will enable a more effortless flow of information and the capacity to work with big data, which will improve forecasting and risk management. Tied to it, the digitization in the next five years will go beyond the basic and simple tasks, it will result in improved data quality, allowing more educated decision-making processes.

Another major objective of the cargo industry is to reduce its carbon footprint. The advance of digital technologies allows us to address it in multiple points, including, and perhaps the most emblematic, how we fuel the planes. We at Kuehne+Nagel are very proud of our actions and our commitment to support the adoption and advancement of investments in a more eco-friendly supply chain.

What are your expectations from Dubai Airshow 2021 - which will be the first of its kind event since the coronavirus outbreak?

The Dubai Airshow is really one of the best meeting points when it comes to the aerospace industry. Similar to previous editions, we at Kuehne+Nagel see the show as an excellent opportunity for networking, meeting and engaging with aerospace stakeholders from across the globe.

However, this edition comes with a special twist. Considering how our industry was hit by the pandemic even before it was called so, this event is undoubtedly an important milestone for the aerospace community.

The Dubai Airshow 2021, I believe, symbolizes a lot the resilience and importance of our industry. It showcases our ability to adapt quickly and efficiently even in the face of unprecedented events. It is also a statement about the region forward-thinking and vision towards business. From our side, it is also a confirmation of Kuehne+Nagel’s commitment to serve this industry, our commitment to our customers and partners.

I am looking forward to meeting people personally and exchanging ideas that shape the way we travel and move cargo in the “new normal”.

How can the cargo industry reduce its C02 impact while keeping up with the next day delivery culture?

This is indeed not a simple task and can’t be done overnight nor in isolation, requiring heavy investments. However, we believe there is no alternative, it is a must-do and we, as a market leader, decided to be among the first movers. As part of our ambitious Net Zero Carbon programme, we became fully carbon neutral for our own emissions by the end of 2020.

But we know it is not enough. As the next step of our Net Zero Carbon programme, we decided to proactively address the CO2 footprint of the transportation services performed by our suppliers – airlines, shipping lines and haulage companies – by the end of 2030.

One key topic is the utilization of Sustainable Aviation Fuel (SAF) which is currently the most effective measure to significantly reduce the environmental footprint of shipping. Our joint work with our suppliers is critical here; together we are fostering the
deployment of sustainable fuel so our like-minded customers can ship their products CO2 neutral.

How can we fast track outdated regulation to meet the needs of today’s cargo?

The best way is to have an open dialogue between governments and private companies, where different points of view can be shared and common ground established. But of course, the first needs to come from authorities by a frank self-assessment and then a genuine desire to modernize.

At Kuehne+Nagel, we have a wealth of information and experience of dealing with governments, entities and markets. We always open to join discussions that would improve trade as it positively impacts the society as whole.

Lastly, what are Kuehne + Nagel plans ahead in the region?

Despite being a global company, at Kuehne+Nagel, we have always believed in having local presence and expertise. We want to be close to the customers and be part of the local society. It is not different in the Middle East, where we are present for decades.

Throughout these years, we have witnessed the evolution towards more openness to international trade and the adoption of more business-friendly rules and processes. Needless to say, the region’s stability, including the recent restoration of diplomatic relations, helps to attract investments and develops intra region trade.

Currently, we serve our customers in the Middle East through facilities in 25 locations, employing around 3000 people and providing solutions for international shipping, warehousing and distribution.

Contact the Dubai Airshow team to exhibit and be part of THE most important aerospace & defence event of the year!

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