Kuehne + Nagel International AG: Pricing Strategies, Service Hours, International Arrangements, Impo

Kuehne + Nagel International AG is a major transport organisation and logistics company that has been associated with the services of sea freight and forwarding air freight along with management of contract logistics and overland businesses effectively. The company was founded in the year 1890 and the parent organization is Kuehne Holding AG. The CEO of the organization is Dr. Detlef Trefzger. The company possesses around 85000 employees and have its stores in more than 1400 locations in 100 countries (Home.kuehne-nagel.com, 2021). The report will discuss about the various pricing strategies, service hours, international arrangements, import export processes, 3PL arrangements and also conduct a SWOT analysis.

The pricing strategies implemented by Kuehne + Nagel International AG is mainly based on several factors such as the destination, timeline, requirement for manpower, load, etc. The company has aimed at reducing the costs and at the same time, manage transportation and freight activities at an effective rate (Sheu & Choi, 2019). Due to immense competition from other logistics and transportation companies, the company needs to evaluate various courses of action for meeting the various needs as well as follow a customer centric strategy. The cost leadership and competitive pricing strategies have often been adopted by Kuehne + Nagel to ensure setting prices that are competitive and could draw in enough customers towards the brand, further, influence their buying behaviours.

The service hours for Kuehne + Nagel in Australia is from 8.30 am to 5 pm. During these hours, the company caters to the operations, which are inclined towards collecting, monitoring, transporting, importing and exporting perishable air freight overland operations (Kuehne-nagel.com.au, 2021). Along with the air freight operations, the company also controls the services of sea freight business processes during this service hour. Logistic monitoring and controlling along with the risk assessment and management is one of the essential responsibilities of the company staffs. Stipulated lunch break from 1:00 PM to 1:30 PM reflects the conscious approach towards work life balance for the staffs.

Sometimes, extension is also allowed in the lunch break in case of projects involving heavy logistics operations, which involved high intensified labour.  The service hours, which resumes after the lunch break consists of monitoring the overland contract logistics, which are lightweight (Cagliano et al., 2017). After strenuous workloads in the form of transporting goods from the factories to the destinations, tea breaks and refreshments are organized, which energizes the workers for another set of business processes.

Service Hours

Typical evidence of this lies in rail and road logistics, the distribution of which is time consuming, during which the workers feel bored. Mention can be made of the mid-way breaks, which are a part of the long journeys to the cargo terminals. These midway breaks are a part of the work schedules, which are completed within the service hours. During this time, the warehouse operations are deployed to the other employees, which is monitored according to the prepared work breakdown structure (Wang et al., 2019).

The international agreements for Kuehne + Nagel include investments of major portions of the UK contract Logistics portfolio along with divestments in Argentina, France. The international processes include commitment towards contract logistics solutions that are scalable, especially in the departments of pharma and ecommerce. The divestment of various portions of the contract logistics business in UK has also resulted in better restructuring and focused business operations and processes (Home.kuehne-nagel.com, 2021).

The company has stressed or prioritised more on the display of convincing and effective financially profitable ventures, which are aimed at working with the administrator for planning a proper condition. The business processes and operations also include management of inventory, loading, quantity, shipping, logistics management and product protection as well as insurance activities too. The business organisation has also been found to have managed a an international supply chain agreement for the purpose of managing extensive distribution along with storage of vaccine named Moderna for Covid 19. It has been a major step towards a better future that has driven conditional marketing authorisation, based on approval by the European Medicine Agency or EMA.

This international supply chain agreement has served the basis of supporting the distribution of Covid 19 vaccines worldwide and manage distribution of the vaccines in various market such as in Middle East, Africa, Asia, Europe and in various parts of America (Home.kuehne-nagel.com, 2021). The logistics and distribution processes have also been managed through warehousing of the vaccines during this Covid 19 times, which has ensured operating its own fleet with the inclusion of more than 200 dedicated pharmaceutical transport vehicles. The investments, which have been made further, have helped in enhancing the pharma and healthcare network, which also ensured stable supply chain that has been well supported by supply logistics as well.

Exports of Kuehne+Nagel freight forwarded company revolves around effective cargo logistics, which takes the goods to be exported, to the buyers. There are customs, for the exports, which are applicable both for the home and host country. The goods to be exported are collected at the terminal points, from where it is exported to the host countries. The last stage is handing over the goods to the buyers, from the cargo terminals.

International Arrangements or Processes

The logistics include air, train, trucks, cargo ships and others, which goes through the risk assessment regarding maintaining the safety and quality until it reaches the destination. One of the other aspects of the export and import services of the company is that of free carrier, where, the seller uses the efficient logistics for taking the goods to be cargo terminal (Hämäläinen, Twrdy & Inkinen, 2017). Free alongside ships are also used as an efficient logistics exporting the goods and services to the host countries. Freight costs and insurances are levied on the import and export processes, where assessments are made on the basis of ensuring whether the carriage is paid to the right buyer, considering the insurance. Contracts and agreements are signed when the goods reach the terminal point. This bears correlation with the aspect of Delivery at Place (Wei & Dong, 2019).

The 3PL represents the third party logistics and with the business trying to expand and deliver more products and services in the marketplace, it has become crucial for evaluating whether to outsource the shipping activities and fulfil the operational requirements managed at the organisation. The customers' buying behaviours change from time to time and thus to meet the customers’ demands and expectations, the business organization has worked with a third party logistics with the purpose of  meeting the demands of customers as well as support critical and complex business functions effectively (Sinkovics, Kuivalainen & Roath, 2018).

The 3PL companies could support Kuehne + Nagel by offering logistics services as well as support the overall business operations along with transfer and movement of goods and services from the manufacturing unit to the end users. The 3PL has also facilitated the outsourcing of logistics and management of supply chains effectively through various activities including the warehousing, transportation, procurement, inventory management, freight audit, payment, tracking shipment, etc.

The 3PL or Third party logistics has helped in improving the scalability, saved a lot of cost and time, managed the expansion of business effectively too. The 3PL could allow Kuehne + Nagel for scaling up the labour, space and transportation activities, as per the requirement of services and products (Zhu et al., 2017). It could help the manufacturers, producers and suppliers to grow as well as optimise the functions and processes associated with the logistics and supply chain management, which establishes a clear path or direction to attain higher business growth and profitability at present and in the future as well.

Import/ Export Processes

The 3PL could ensure allocation of resources towards management of warehousing activities along with management of transport of goods and services while optimising the services largely. This helps in reducing costs that are incurred, furthermore, ensures that significant amount of time is saved as well to focus more on the manufacturing, production, strategic planning and operational procedures (Kahiya, 2020). Not only does it help in expanding h business into new markets, but also helps in leveraging new supply chains for the company chosen here, i.e., Kuehne + Nagel. This should also be effective for improving the customers’ services as well as gain access to new markets, while being in accordance with the compliance procedures and security measures.

It has also helped the company to attain proper accreditation for the delivery of extensive global services as well as manage better accessibility and expansion of business effectively too (Fredriksson, Janné & Rudberg, 2021).  The company has been considered as “Global Third-Party Logistics Provider of the Year” during the supply chain logistics award, because of its excellence in offering industry leading logistics and freight services all over the world.

He company has not only achieved this reward on the basis of great visibility across supply chain networks, maintenance of customer service standards, but also on the basis of investments that have been made in the warehousing, distribution and logistics capabilities. The company’s approach towards enhancement of service portfolio has also favoured the management of innovation of products as well as managed optimisation of processes, which have been crucial for delivering excellent supply chain services and to cater the needs of customers prominently (Hofmann & Osterwalder, 2017).  

It has been found that often the distance and duration of transportation options has been significant to the overall pricing and cost of logistics and transportation. The costs of transportation have been a major aspect of the overall spending associated with the logistics and supply chain management for the organisation named Kuehne + Nagel. Due to the increase in price of fuels and proportion that has been allocated to the transportation, the cost of delivery and pricing also increase largely.

Considering the fact that as the cost has been transferred to the customers and the price of products and services have continued to rise, the pricing and cost have also increased (Ren et al., 2020). Though, the costs and pricing have been driven largely, it is crucial for the management of cost reduction, which could be possible with the help of various transportation strategies.

3PL Arrangements

The logistics have been often related to the ratio of weight and measurement and it is evident that the measurement unit could evaluate the costs associated with the transportation activities. The expenses or costs of transport and logistics are measured, on the basis of the weight and stated measurement of the shipments that are to be transferred or shipped. Due to this, it is clear that the higher is the weight and stated measurement, the higher would be the costs and pricing associated with the transportation, logistics and supply chain options (Jazairy, Lenhardt & von Haartman, 2017).

The fulfilment of customers’ needs and preferences is at the core of every businesses and just like that, Kuehne + Nagel has also managed to integrate certain technologies that have driven innovation and development. The technological advancements have massively helped the company to use a new application named myKN, which could help in access to online services that are required to plan and ensure management of shipments and transportation from one place to another (Home.kuehne-nagel.com, 2021). It could allow the Kuehne + Nagel customers to track shipments and gain related information online, thus, ensure better management of transparency and openness with better access to financial data and information too.

Another major impact that technology has created is the Kuehne + Nagel ESP, which has massively favoured the clients to connect and communicate with the various individuals present across the supply chain such as the customers, suppliers, vendors and also the supply chain experts. Another major technology example could be the Swift Log that has transformed the supply chain management system into an ecommerce technology, which ensures utilisation of effective software based solutions that could help and support the clients in case of managing fluctuations in volume of shipments (Home.kuehne-nagel.com, 2021). Thus, there would be better scalability, higher global outreach, smooth and optimised work flow too.

The sustainability methods and programmes of Kuehne + Nagel have helped in managing continuous communication with the different types of stakeholders in business as well as allowed the employees and other stakeholders to share and exchange their ideas, opinions and feedbacks. It has not only helped in making effective decisions but at the same time, resolve conflicts effectively as well as strive towards improvement of business operations and processes in every departments and areas of business (Karia, 2018). It has also promoted better transparency and openness while at the same time, managed fair treatment of workers, which has helped in forming a diverse and inclusive workforce, where equal scopes and opportunities have been provided to everyone.

The company understands about sustainability going far beyond, which represents safeguarding the global resources and at the same time, used Big Data technology and predictive analysis to improve logistics’ efficiency and optimised the supply chains all over the world with ease and effectiveness. The Learning and development programme or approach further encouraged flexibility and provided training to all the workers of the organization for the purpose of accelerating growth and improve organisational efficiency (Khan, 2019). To gain long term growth and development, the organisation has also committed towards being environmentally sustainable with the implementation of environmental policy and reduced negative environmental impact caused by logistics and transportation services. The major components include the environmental compliance management, management of energy and wastes, water, biodiversity and management of air quality as well (Ren et al., 2020).

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