KN FreightNet has ArrivedA disruptive innovation that transforms airfreight shipment handling.

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02Swift Response Saved a Life

10In Conversation with Paolo Montrone

05Faster, Easier, Better Control

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Welcome to the second issue of Kuehne + Nagel Connect, a magazine in which we highlight some of the work we do for you in the increasingly integrated network of global trade.

This year marks 125 years since Kuehne + Nagel was formed in Germany to oversee shipments of cotton, cereal and sugar. From an age that relied on the telegraph and morse code, our customers needs have continued to change. And we have changed too.

Leveraging Technology for Better ServiceRecently, we introduced the new e-commerce platform KN FreightNet that allows airfreight customers to instantly obtain prices, including charges such as fuel and security fees.

With this new service, your shipment can be booked and ready to go in less than a minute. And the details are saved, so there is no need to resubmit information for repeat shipments.

Tightening Processes for Smoother DeliveryIn South Korea, we were one of a select number of forwarders to be named a Certified Excellent International Freight Forwarder (CEIFF) by the government.

In addition, the South Korean government has designated our local office to be an Authorised Economic Operator after an extensive audit.

Strengthening Network with New Trucking GatewayThe new Southbound LCL Trucking Gateway from Port Klang to Singapore has given our customers the option of bonded overnight transport. Offering rates comparable to seafreight and predictable schedules, our customers have more to gain working with Kuehne + Nagel now.

Going the Extra Mile to DeliverOur unwavering commitment to always deliver was well embraced by both our India and Vietnam teams. While the India team saved a life with their quick response, the Vietnam team implemented a complex solution perfectly to help a customer get her supplies just in time.

Partnering the Customer for ResultsMore often than not, successful deliveries are only possible with our customers’ support and trust. Our Australia team synergistic collaboration with their FMCG customer fully exemplifies that. The customer enjoys cost savings; and our Australia team won themselves a loyal customer.

The times may have changed, and is likely to continue to evolve; our responsibility to you remains the same.

Alfred HofmannPresident South Asia Pacific

Editor’s notE2

More often than not, successful deliveries are only possible with our customers’ support and trust.

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Swift Response Saved a Life

Standing by Kuehne + Nagel’s commitment to deliver as promised were two Kuehne + Nagel India staff – Kesavan and Raman. They went out of their way to answer a customer’s emergency call.

Swift ActionsAlthough Kesavan was not expecting to receive an emergency business call during a public holiday, he immediately sprang into action. In order to save a 39-year-old man who met with an accident and was fighting to stay alive, Kesavan acted swiftly to get in touch with the warehouse site manager to get his approval to open the warehouse and withdraw a life-saving medical graft.

Tight TeamworkConcurrently, Kesavan contacted warehouse supervisor Raman. Residing close to the warehouse, Raman rushed to the warehouse, picked up the medical graft and prepared the necessary documents. By the time the customer’s representative from the hospital arrived, the medical graft was ready for collection.

The whole operation facilitated by Kesavan and Raman was completed in less than three hours. And, most importantly, the man in the hospital was saved.

Thanks to the timely and swift actions of Kuehne + Nagel India’s warehouse staff, a life was saved.

“We are grateful to all members of the

logistics team. It was because of their help and responsiveness,

despite the holiday, that made it possible for us to save a life.”

Mr R.Dhanasekaran, Medtronic India

12:10Customer called regarding an emergency requirement

12:20Site Manager gave approval to open the warehouse

13:20The warehouse was opened

14:00The medical graft along with invoices was prepared for dispatch

14:40Customer collected the product

14:50The warehouse was closed

Tokyo 125 AnniversaryIn the presence of customers and business partners, Kuehne + Nagel held a special event in Tokyo on 4 March 2015 to celebrate the 125th anniversary of its foundation. Group CEO Dr Detlef Trefzger, welcomed guests and presented an overview of the Company’s history and development, both in Japan and around the world.

Opening celebrations with a traditional Japanese sake ceremony. (Left to right) Tadhg Meaney (TYO NM), Detlef Trefzger (Sgi HA), Nobuatsu Ogawa (Osa BM)

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Kuehne + Nagel Korea Gained Triple Accreditation In pursuant to being awarded the Certificate of Excellent International Freight Forwarder by Ministry of Land, Infrastructure and Transport, Kuehne + Nagel Korea received a letter of commendation from the Pusan Customs House in appreciation of their active cooperation on the customs affairs, as well as achieving the Authorised Economic Operator (AEO) status.

These certifications are expected to boost public confidence in Kuehne + Nagel Korea’s service quality and reliability, paving the way for securing requests for quotation for major accounts, particularly in the oil & gas industry.

Kuehne + Nagel Korea Managing Director shared, “Many major customers in Korea and other countries, who are also AEO certified, have a preference to work with AEO certified logistics service providers.”

Southbound LCL Trucking Gateway is Now Operational LCL cargo from Port Klang to Singapore can now opt to take to the roads rather than the sea. This development presents competitive rates, shorter lead-time and predictable schedules for customers.

Riding on this momentum, Kuehne + Nagel is currently exploring the extension of this trucking gateway for Airfreight and Contract Logistics services, as well as the implementation of a corresponding trucking gateway from Singapore to Port Klang.

Certificate of Excellent International Freight ForwarderIssued for the first time in 2014, only 20 forwarders out of over 3,000 forwarders in Korea received the accreditation.

Authorised Economic Operator (AEO) CertificateThe successful achievement of the AEO certification indicates that the security system in Kuehne + Nagel Korea is robust and meets with both customs and customers’ requirements.

10-hour overnight trucking from Thursday night to Friday morning

No change of customs procedures for exporters

Weekly service

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rates to seafreight

• Flexibility: our truck can be deployed daily versus once a week feeder vessel.

• Lead time: our truck reaches the shores of Singapore in hours versus feeder vessels require days.

• Economics: our truck is competitive versus the feeder operation.

KEy BENEFITS INCLuDE:

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Obtaining quotes, placing bookings and tracking shipments is a time-consuming process that causes a significant drain on resources – and both time and resources are precious in today’s world. Driven by this knowledge and the rich expertise gained from dealing with diverse and global customers, Kuehne + Nagel launched KN FreightNet in 2014.

Less than six months since its launch, the e-platform is already fast becoming popular among Kuehne + Nagel’s customers – with quick sign-ups to date and numerous bookings

Airfreight shipping process has never been simpler. With Kuehne + Nagel’s new e-commerce solution– KN FreightNet, customers now have

the right tool to manage airfreight shipments in one place.

and quotes received during the first few months.

Exciting Features of KN FreightNetBuilt using the latest web technology, KN FreightNet’s easy-to-use navigation and clearly structured menus provide customers with greater control over how and when they book.

Clarity in Quotations Traditionally, getting a quotation is a process that could take days, and even then the final costs incurred may deviate from the quotation as

In the Spotlight

Faster, Easier, Better Control

fuel and security charges are often not factored in yet. In contrast, KN FreightNet offers transparency. A structured cost overview enables customers to clearly understand the different cost components as well as ensure that there are no surprises in the final bill.

In addition, the system enables customers to compare prices between three available airfreight services, and calculate the required shipment date based on the requested delivery date at the onset – helping to facilitate and expedite the decision-making process.

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Real-time shipment tracking that enables full visibility

Access to Kuehne + Nagel’s suite of three airfreight products to ensure air cargoes are delivered via the safest, speediest and most cost-effective way possible

Dedicated support team working on toll-free numbers

Binding, all-inclusive quotes within 60 seconds – including fuel/security charges

Instant, online booking without the need to retype any shipment data

Quotation and booking templates for recurring routes

KN FreightNet Benefits at a Glance

How does KN FreightNet work?

User input: 1) Place of origin, 2) Final destination, 3) Weight, 4) Volume

Overview of all-inclusive prices* including fuel and security charges for Kuehne + Nagel’s airfreight products and estimated transit times will be calculated and provided accordingly.

*Prices are valid for up to 14 days.

OR

Make a booking

Users can track shipment with “click-to-track” functionality that gives up-to-date information on the status of consignments shipped in the last 90 days.

Save shipment details

Users can choose to save shipment details as templates for ease of re-booking and future quote comparisons.

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In the Spotlight7Fuss Free Freight Booking

Making a booking using KN FreightNet is straightforward and easy. Not only does the system guide the user through the booking step-by-step to ensure that all the necessary shipping documents are in order, it also facilitates the electronic transmission of booking details to Kuehne + Nagel’s operators directly, in a quick and paperless manner. The result is a seamless integrated booking process that boasts greater efficiency and accuracy.

Maximum VisibilityHaving real-time information in the fast evolving business landscape of today is pivotal. Therefore, KN FreightNet goes beyond providing four main status types – booking received, booking confirmed, shipment start and shipment ended – to include exact details of the shipment, enabling customers

to gain visibility of all actual and planned movements on their current shipment. Coupled with the availability of information on consignments shipped within the last 90 days, better capacity and resources planning is made possible.

Solutions Tailored to NeedsComplementary to the benefits offered by KN FreightNet are three customised service options. KN

Value-added Airfreight Service Options

KN Express (Air speed) Recommended for time-critical cargo

• Transit time approximately 1 – 3 days (door-to-door) – fastest possible transport

• Automated delivery promise• All-Inclusive-Price• Includes carriers prime express products• All terms and ranges of delivery• Every size and weight (aircraft specifications apply)

KN Expert (Air Premium) Recommended for fast, time-defined delivery

• Transit time approximately 3 – 5 days (door-to-door)• All-Inclusive-Price• Direct flights used where possible• KN preferred or Cargo 2000 carriers• All terms and ranges of delivery• Every size and weight (aircraft specifications apply)

KN Extend (Air Standard) Recommended for budget-sensitive shipment

• Transit time 6+ days (door-to-door)• One- or Multi-Stop flights used• All-Inclusive-Price• Includes KN selected or Cargo 2000 carriers where possible• Maximum cost saving by optimal/efficient freight collection/

distribution, storage and consolidation• All terms and ranges of delivery• Every size and weight (aircraft specifications apply)

Are you on KN FreightNet yet? Get started at www.knfreightnet.com.

FreightNet customers can opt to prioritise delivery time promise or freight cost, without compromising on the visibility of their shipments.

Furthermore, in an effort to leverage the ease and convenience KN FreightNet is bringing to the airfreight customers, Kuehne + Nagel has embarked on initiatives to enhance and expand the system beyond airfreight to cater to other customers.

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An Insider’s Perspective to KN FreightNet

At a glance, there is everything to love about KN FreightNet. However, nothing beats hearing about the tangible benefits that KN FreightNet has brought to the customers who are on board

the programme. Julia Tiar, Product Manager of KN FreightNet, shares these insights

What is the reason behind KN FreightNet’s rapid take-up rate?There is a set of common industry problems that face businesses whenever they talk about airfreight services. These same problems, including incorrect billing, insufficient charges transparency, slow response time and visibility, are however eliminated with the use of KN FreightNet. In its place, customers get more control, less surprises from unexpected charges and more prompt services.

The introduction of KN FreightNet has come at an opportune time. There is no real online freight solution at the moment, in the forwarding industry. Although some freight forwarders may offer web platforms, they are often not totally integrated, and responses to requests for quotation still have to take hours and even possibly days. In comparison, customers

get their quotes on the spot with KN FreightNet. Our customers see value in the consistency, speed and convenience the solution offers. Therefore, they have responded warmly to KN FreightNet.

Who can benefit from KN FreightNet?KN FreightNet is a business solution that is easy to learn and use. That, as well as the inherent advantages KN FreightNet brings compared to traditional logistics, simply means that no matter the business, big or small, there is something that KN FreightNet has to offer.

How can small businesses benefit from KN FreightNet?It really only takes three easy steps to use KN FreightNet – quote, book and track. These steps are simple enough for any person unskilled in logistics to handle. That is why KN FreightNet has become an effective

platform that empowers small businesses to expand and grow. Without having to learn the ins and outs of logistics, they can still be assured that they are always getting a good deal – based on shipment time and cost.

How can big businesses benefit from KN FreightNet?For big businesses with operations around the world, it is important to have consistent standards and an integrated value chain as these allow for better control and process transparency. Where KN FreightNet is concerned, the system not only makes it easy for the organisations to achieve these, it also brings about greater efficiencies to the business – thanks to its simplicity. The opportunity to customise the platform interface to ensure compliance with their standards is an equally strong motivation for big businesses to embrace KN FreightNet.Ku

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Every year, Kuehne + Nagel Vietnam handles 32 shipments for 14 cruise liners, amounting to 81 containers on average. Recently, Kuehne + Nagel Vietnam’s competencies were put to a test when bad weather in Da Nang prevented the cruise ship Celebrity Millennium from calling at the Chan May port for provisions. Instead, Celebrity Millennium had to berth at Ha Long Bay, which is located 1,000 kilometres away from the planned destination.

Racing Against TimeWithin 36 hours, the team had to come up with a solution and to execute it so that Celebrity Millennium can receive the provisions and be on its way. With zero buffer for error, the team sprang into immediate actions.

Going the Distance in Bad Weather

On one hand, the team got in touch with the port agent at Ha Long Bay to check if a barge could be arranged to move the containers from the port to Celebrity Millennium, berthed approximately three nautical miles away. On the other, the team had to plan the logistics of moving the containers from Da Nang to Ha Long Bay and loading them onto Celebrity Millennium. A bonded transfer customs process also had to be arranged to transfer the containers from Da Nang Chan May port to Ha Long Bay Cai Lan International Container Terminal (CICT).

Overcoming a New ChallengeIt was four hours later when Kuehne + Nagel Vietnam got the approval to withdraw the containers from Da Nang port for transportation to

Kuehne + Nagel Vietnam braved bad weather to ensure on time, on target delivery for Celebrity Cruises’ ship – Celebrity Millennium.

Ha Long Bay. Just when everything looked to be going as planned, one of the trucks broke down about 200 kilometres away from the destination. This set the team back by almost four hours as they rushed to find a replacement truck.

Making up for Lost TimeEventually, after an eight-hour delay, the replacement truck brought the container around to CICT. Upon arrival of the containers on site, the two activated barges ferried them along with a machine forklift to the waiting Celebrity Millennium. Working together seamlessly, Kuehne + Nagel loaded the containers onto the vessel with the machine forklift while Celebrity Cruises made sure returning guests from the land tour were unaffected by the proceedings.

Mission AccomplishedWith about four hours to spare prior to Celebrity Millennium’s departure, the provisions were fully loaded and Celebrity Millennium was ready to set sail to their next stop – Hong Kong – as scheduled.

Kuehne + Nagel Vietnam’s integrated solution had paid off. Acting as a conduit to align the logistics between the carrier, truckers, port agents, brokers and barge operators as well as leveraging Kuehne + Nagel’s global network, Kuehne + Nagel Vietnam was able to ensure that there were no service gaps in the multi-modal, highly complex recovery. No wonder Kuehne + Nagel is the choice logistics partner of Celebrity Cruises!

HA LONG BAy

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In Conversation with Paolo Montrone

Born: In Trieste, Italy

Global Footprint: USA, Italy, France and Singapore

Tenure in Kuehne + Nagel:25 years

Portfolios in Kuehne + Nagel:1990 – 1997: Director Mediterranean Trades; 1997 – 2001: District Manager Central and South, Italy; 2001 – 2003: Director Sales and Marketing, Italy; 2004 – 2008: National Director Seafreight, Italy; 2008 – 2011: Senior Vice President Seafreight South West Europe Region; 2010 – 2014: Senior Vice President Seafreight North America Region; 2014 – Current: Senior Vice President Seafreight South Asia Pacific Region

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How has previously holding a similar portfolio in North America and South West Europe helped you in your current portfolio?I come with the background knowledge of what is expected of my role. More significantly, from my past experiences, I have come to learn that people around the world are actually very similar – people want to live in peace, love their family; they want prosperity and a better future for their children. Everyone enjoys good music, a good movie or sitting at a table for a good meal with their families and friends: the only difference is French cheese smells different from Curry.

The same theory applies in our globalised business context. All our clients face the same challenges no matter where their companies operate – increasingly and constantly changing competitive environment, operating costs, pressure on margins. It is up to us to exercise our creativity to explore new ideas and provide solutions which make our clients more competitive, and not with “lower rates” but mostly by improving processes and leveraging people and systems to do so. This is where we make the difference, and are the best at it.

What elements do you rate as essential for developing well-functioning teams?Trust is definitely one of the most important elements. For a team to work well, members must be able to trust each other and share the same objectives, be passionate and have capabilities to fulfil tasks assigned to them. Sense of personal responsibility, accountability and ambition to improve are a must.

I always enjoy working in highly dynamic teams where everyone is Ku

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able to accept different points of view and not afraid to engage in open, and sometimes passionate and animated discussions. Nobody can be always right and always certain about the decisions to be made. We have to encourage everyone, especially the younger generation, to bring forward fresh ideas even if it means to challenge the status quo. I believe the essence of the Kuehne +Nagel culture is to constantly challenge ourselves to think harder and think different: these are prerequisites to innovation. Our history of 125 years is living proof of this.

What are some immediate goals you have set for South Asia Pacific (SAP) in 2015?Our key priorities are in line with our Focus & Excellence strategy as outlined in details in our Ocean initiatives. To ensure we are the extension of your business, we must continue to have the best team in all SAP countries – at all levels. Our people are our most important asset and this is where we make the difference. To do that, we have plans to roll out additional training to arm our people with appropriate skill sets and essential tools.

How I see it is that we must pay more attention and support our operational frontline functions. This is where the most customer engagement and contacts happen. It is also where we directly influence the satisfaction of our customers with our service or cause them to want to look elsewhere for the next shipment.

What measures have you put in place to achieve these?Our target is to grow our market share in all SAP countries for both FCL and LCL and we want to drastically increase the business we control. This means while we

still want to be the best-in-class partners for our global network, we also have to focus on growing our direct client base in each country.

We are well aligned with our Sales & Marketing leadership to foster further dedicated trade growth in all key Trades and Business Solutions where we are known to have the industry’s best product / service portfolio.

Focus on ensuring a positive customer experience has to become even more of a priority and the differentiator for our organisation. Our tagline is “We are the extension of your business”, to maintain and excel on this status we have to go the extra mile for our clients, all of us.

I always encourage our people to think “How would I like to be treated, responded to, catered to, if I were to be the client on the other side?” Think of when you had a good or a bad experience checking in to a hotel, for a flight, dealing with your bank or your insurance representatives… We ultimately provide a “service” which comes from Latin “servire” and means figuratively “be devoted”.

Often in our hectic operational daily work we can lose the sense of this, but we need to constantly remember that our clients put their trust in us and that they are always free to make another choice.

“It is up to us to exercise our creativity to explore new ideas and provide solutions which make our clients more competitive, and not with “lower rates” but mostly by improving processes and leveraging people and systems to do so.”

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12 Kuehne + Nagel Australia Trade Consultancy Scoring a Win-WinIn the competitive world of today where businesses place an important emphasis on bottom lines, very often, the cost efficiency and effectiveness of supply chains could significantly impact the profits. Consequently, relationships between logistics companies, such as Kuehne + Nagel, and the customers are no longer zero-sum games.

The viability of this belief is best demonstrated by the recent collaboration between Kuehne + Nagel Australia and a global FMCG. While the former has won a big account, the latter has also won better profit margins for their products.

Putting Forward an Irresistible PropositionWhen the newly appointed Supply Chain General Manager of the FMCG customer agreed to hear the team at Kuehne + Nagel Australia out on their proposal and recommendations, Sean Saliba, National Consultancy Manager, Kuehne + Nagel Australia, made it a point to present a strong case.

Moved by the team’s passionate pitch as well as the prospects of potential savings, the customer eventually appointed Kuehne + Nagel Australia to undertake an import audit programme, with the view of establishing cost savings and a duty minimisation strategy.

Finding Answers from the DetailsAfter conducting a thorough analysis on each customs entry lodged under the customer’s name from 2009 to 2012 provided by the Australian Customs, the team established that the customer had imported close to half a billion dollars worth of cargo over the years. Of which, the customs duty accounted for approximately 3.5 percent. Hence, this resulted in significant costs for the customers

when they perform a final landed cost analysis per product.

A deeper analysis of the tariff data, legislation and customer’s products revealed that the customer’s previous customs brokers had incorrectly entered the goods. This resulted in incorrect tariff classifications, omission of existing tariff concessions and unclaimed free trade agreement concessions. Collectively, the previous suppliers caused the customer to overpay customs duty amounting to 10 percent of the overall gross total.

Exploring Cost Saving AvenuesThrough the research findings, Kuehne + Nagel Australia identified areas that could bring about cost savings for the customer and implemented a two-tiered strategy:

• Measure 1 – Kuehne + Nagel Australia reviewed the existing

legislation and ascertained applicable tariff concessions which could help the customer reduce customs duty payable. Eight newly created tariff concessions covering various products were promptly secured, promising future savings for the customer.

• Measure 2 – Kuehne + Nagel Australia exercised duty drawbacks on the customer’s behalf to achieve significant duty returns. (Based on exported cargos that were originally imported)

Building on the Winning StreakThe positive outcomes stemming from the strategy inspired the customer to examine feasibility of scaling up the initiative to include their business in other countries. Concurrently, Kuehne + Nagel Australia continues to examine possibilities of further duty refunds and obtaining new tariff concessions for the customer.

Breakdown of duty refund pathways

12%New Tariff Concessions

67%Incorrect Tariff Classifications

21%Free Trade Not Applied

“The collaboration afforded the customer an opportunity to experience first-hand our professionalism and the competitive advantage we can bring to their business. That, in turn, has strengthened our relationship and paved the way for further opportunities.”

Sean Saliba, National Consultancy Manager, Kuehne + Nagel Australia

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