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ICT and Green Logistics Kuehne + Nagel Management AG

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Kuehne + Nagel and Environmental Sustainability

As one of the world‘s largest transport and logistics providers, Kuehne + Nagel has a vital responsibility for the

environment and nature. This is demonstrated by our special arrangements for moving dangerous goods and above all

reflected in our choice of ecologically-compatible transport and delivery methods. Additionally our sophisticated data-

processing systems enable us to consolidate freight electronically, thereby substantially cutting empty capacity and

utilising the available resources to the maximum. At the same time we are constantly developing new, even more

environmentally-friendly logistics solutions. Safeguarding all of our futures, a cause to which Kuehne + Nagel is

dedicated.

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Green operations in logistics results from understanding some simple physics and operational efficiency factors •  Energy consumption = f(mass, velocity, distance) •  Efficiency = f(planning, supply/demand matching, delays, technology

employed, resources consumed)

•  Flow only those goods for which there is a demand from production source to consumption point without delays or stops using the least amount of resources possible

•  Lower environmental impacts due to higher efficiencies in operations, lower inventory levels, minimized warehousing requirements, higher load factors, reduced material waste and optimized material flows

Objective

Outcome

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ICT assists logistics operators in addressing both physics and operational efficiency factors to realize green logistics •  Visibility and event management tools provide planners with the ability to

respond to transport events as they occur •  Integration into point of sale systems provide planners with real time

information enabling them to match supply and demand •  Sophisticated demand planning and inventory optimization systems minimize

inventory requirements increasing resource efficiency and reducing transport and storage requirements

•  Sensor technologies provide planners with better realtime information on location and state enabling pro-active planning and re-planning activities

•  Integrated telematics systems enable realtime monitoring of vehicle performance, location and postioning

•  Transport management systems facilitate traffic flows on land, sea and in the air

•  Transport network design tools optimize networks for flow and carbon emissions

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A good example of how ICT helps green logistics is in fleet management

Use of FleetBoard & Telematics management systems

�  Savings regarding fuel consumption �  Optimizing vehicle usage and driving style ð Reducing vehicle abrasion

�  Reduction of maintenance contract costs �  Cost and time savings for data downloads

(driver card, mass storage device) �  Advanced planning possibilities of deadlines

(workshop, maintenance, technical control board [TÜV])

Telematics and FleetBoard time management informs in real time about the driver’s driving and rest times ð Use of a digital vehicle tracking system and fleet management solution

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ICT also helps in assisting shippers, customers and LSPs in answering the question “Where’s my stuff?”

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Unfortunately, while ICT can provide the assitance just noted, realization of the full benefits of ICT has been difficult •  Most logistics companies do not communicate with their partners in an

electronic manner because of time, trust and cost issues •  Communication formats in the field of logistics are not standardized •  autoID technologies, such as RFID, are expensive and costly without

broad deployment •  Telematics systems are proprietary and do not communicate with one

another •  ICT requires a level of sophistication that many smaller logistics

companies do not have •  Logistics operations cross many borders (business as well as country)

and there are few standards at any crossing •  ICT encourages certain reactive or point-to-point shipping operations

that undermine efficiency and actually increase transportation requirements

The promise of ICT for improving environmental performance in the logistics industry is inhibited most by a lack of trust •  A history of independent operation

has resulted in numerous small and large LSPs running redundant operations and equipment at less than optimal efficiency

•  Independent operations result in low capacity utilization (50 – 80%), traffic congestion, fierce competition that limits investments, and adverse environmental impacts

•  The competitive environment further aggravates the issue of trust as LSPs fear their competitor might use what they learn through collaboration against them

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One attempt to simplify ICT usage and realize greener operations is collaborative cloud services for logistics

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Cloud services for logistics, using Facebook like social networking models, encourages companies to link and share information

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Collaboration in the cloud requires ICT that leverages emerging FI technologies and builds on Web 2.0 models

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ICT still holds potential for helping to improve logistics efficiencies and lower environmental impacts. It just needs to become a bit more open and “social” in its operations. •  Integration of supply chain partners

into “flow” models could reduce inventory levels and delivery times by up to 50%

•  Shared use of transport equipment and consolidation facilities could reduce transport related traffic by 25%

•  Environmental impacts of transport and logistics operations could be significantly reduced through collaborative operations facilitated by open and intuitive ICT solutions

Thank You for Your Attention As long as I live, I'll hear waterfalls and birds and winds sing. I'll interpret the rocks, learn the language of flood, storm, and the avalanche. I'll acquaint myself with the glaciers and wild gardens, and get as near the heart of the world as I can.

John Muir