Kerry Logistics’ Blank brings Europe, China a bit closer

Thomas Blank, managing director of Kerry Logistics

With its extensive infrastructure and footprint in the world’s biggest e-commerce market, China, Kerry Logistics is intimately involved in directing and processing the growing volumes of goods circulating the globe. In Europe, the company is working to grow its footprint, but the market is mature, necessitating an ambitious mergers and acquisitions (M&A) strategy.

In Munich, Air Cargo World caught up with Kerry’s managing director for Europe, Thomas Blank, shortly after the Hong Kong-based logistics company purchased Tuvia Italia, one of Italy’s largest companies in the field of air, maritime, land, multimodal shipments and integrated logistics. Blank explained how the May 2017 acquisition fit into Kerry’s larger strategy of creating a seamless logistics network between the two continents. Whether its maritime, air or train, Kerry is covering all its modal bases as it brings business and consumers closer together.

Q: What steps are you taking to capture cross border e-commerce?

The strategy in Europe is obviously different from our Asia strategy. We are not going trying to replicate the services and infrastructure that we have in Asia. Instead, we are selling into the infrastructure of Asia. As an example, we are looking for customers that need warehousing and value-added services, distribution services or e-commerce cross border services in China and Southeast Asia. From here [in Europe], we broker the customer relationship and maintain it, or have the outbound freight going into Asia, or the inbound freight coming in from there, using the value-added service that we have on the other side of the world.

Q: What sort of demand are you seeing for this cross-border e-commerce, and who’s behind that?

The big names are Alibaba, Amazon, eBay and others, but what you see today is two different channels. There’s the milk powder that goes to China, which is nothing more than an alternative supply to the official channel. We’re more interested the second channel, the e-commerce platforms that bigger businesses have, where a Chinese supplier puts his goods on Alibaba or Amazon, and then European buyers purchase through those platforms. These goods are shipped either in bulk, via ocean freight, and stored in a warehouse, or they come in via airfreight, once they have been purchased. It’s the same thing in the opposite direction – companies that don’t have their own web shop set up, that don’t have their own supply chain strategy for e-commerce use these platforms. That’s one part that we’re focusing on, and we’re also focusing on companies that do have their own web shops, and we hold inventory for them to release it after it is purchased.

Q: What role does rail play in these supply chains?

A train has 52 rail cars, that’s 104 TEUs [twenty-foot-equivalent units], versus the vessels we use, that hold between 12,000 and 18,000 TEUs, and they leave daily from Shanghai. Rail is more of a convenient in-between product for air and ocean freight. In both directions, there was an imbalance of trade in the past, but that has changed, with the ocean carriers ramping up their pricing strategies and the capacity being reduced. Kerry just had a customer shift cargo from ocean freight to the train, shortening the transit time. It’s was an acceptable price differential for them and it cut down their inventory holding costs. Ten years ago, people would have said the train was unreliable, but today, train schedules run like clockwork. Customers are also more willing to try new modes, so it’s an interesting period of time.

Q: What’s next for Kerry Logistics regarding European expansion?

We are working on several other acquisitions – the acquisition of Tuvia Italia was acquisition number three in the last five months in Europe. We’ve got a couple more up our sleeve that I can’t talk about right now. France is on the list as well; it’s the only big economy in Europe that is still missing. In Germany, we still aren’t at the size we need to be to be a major player, so we need to look at an acquisition there. In Eastern Europe, it will probably be more of an organic opening, rather than through M&As. Kerry just opened a freight forwarding office in Warsaw. It’s still very small, however our team there is well networked, and I have high hopes that that office will develop rapidly. We have also found people in Romania that look interesting.

8 - Readers Like This Post

Leave a Reply