AS FOOTPRINT'S Brand Ambassador of logistics, Simon Clifford, Business Development Director at Kuehne+Nagel gives us a candid view on responsible logistics.
We are delighted that Kuehne + Nagel is Footprint’s newly appointed Brand Ambassador for logistics. Sustainability and efficiency runs through the core of your business, tell us why?
Some may be unfamiliar with our name, but we’re one the world’s leading logistics companies. We work with customers on a global basis to improve the efficiency of their supply chain operations. This can be something really simple like helping a customer achieve better loading efficiency on its sea container movements, or operating a complete end-to-end solution where we are involved in optimising all aspects of the supply chain to reduce our customer’s costs and waste less, as well as improving service to their end-Customer.
Sustainability and efficiency are totally compatible – a more efficient operation will have a lower impact on the environment and will ultimately be more sustainable.
Tell us a little bit about the scale of your network.
Kuehne + Nagel has approximately 63,000 employees at more than 1000 locations in over 100 countries.
Our foodservice operations in the UK are based on a network of stockholding depots in Greenford, Wellingborough and Trafford Park. These are supported by a number of cross-docking platforms where orders are delivered to the outlet. Our stockholding sites occupy some 540,000ft², that’s the equivalent of about 10 football pitches.
We make about 1 million deliveries per year to foodservice outlets in the UK with a fleet of about 250 vehicles. Annually we deliver in excess of 55 million cases of food.
You have not only built sustainability into your ops but your entire fleet is designed with sustainability in mind.
Yes, we put a lot of thought into how we design our vehicle fleet. Many of our vehicles are fitted with under-belly compartments that enable us to collect waste materials from the outlet – oil, cardboard, plastic, tin, glass and food. By collecting waste we avoid the need for a separate waste collection vehicle to turn up at the Outlet, reducing vehicle mileage and the impact on the environment. All of the waste is recycled, the oil is turned into bio-diesel and the food is converted to energy through anaerobic digestion. It makes commercial sense too, as by centrally collecting waste we can improve its value for recycling. So far we have saved over 7,000 tonnes of CO2 from food waste and oil reprocessing, and a further 15,000 tonnes of waste has been recycled.
Elsewhere within our contract logistics business unit we have invested in a fleet of double-deck trailers, so where we have to trunk product from a stockholding point to one of our cross-docking hubs we can double the capacity of the vehicle, again reducing the miles travelled. Additionally we have invested in Frigoblock non-fuel refrigeration systems for a large percentage of our restaurant fleet.
We’re now turning our attention to fuels – we’ve invested in dual-fuel vehicles on our trunking fleet, which use a mix of diesel and liquified natural gas which has a lower carbon footprint.
You are challenging some traditional logistics models and are trying to encourage the foodservice sector to rethink distribution modes. Tell us more.
Historically the sector has been supported by a wholesale model where the operator can easily access a wide range of generic foodservice products. This flexibility comes at a price with the Wholesaler taking a healthy margin on the products sold.
Typically, as a foodservice operator evolves it wants to be able to better differentiate the products it uses in its outlets and, once it’s reached sufficient scale then it can adopt a directly sourced model for the majority of the products it uses. This gives the operator access to a much wider potential supplier base, allowing it to purchase more efficiently. It isn’t just about lower product cost, it’s about how the operator can have greater choice and how it can improve its offer to end-customers in a fiercely competitive market.
That’s where Kuehne + Nagel step in – we provide the logistics platform that enables operators to choose whatever suppliers they like, and we do the rest – managing the stocks, paying the suppliers, taking the orders from the outlets, managing customer services and picking and delivering the order to each outlet.
Increasingly we’re getting involved in supporting customer’s source products further upstream, for instance with non-food lines which can be sourced from the far east at lower cost and greater logistics efficiency – and again we can support in terms of managing the global freight aspects.
Is wholesale and distribution behind the sustainability agenda?
I think the sector as a whole is increasingly aware of the need for sustainability, and at the same time this has to be achieved within the framework of cost efficiency and effectiveness. We have to look at this from the perspective of the entire supply chain – from minimising waste in outlets, to recycling and reprocessing as much as possible, to operating the most efficient logistics platform, ethically sourcing product and positively managing quality compliance and finally by operating in a socially sustainable way in terms of how we recruit, train, manage and develop our Colleagues in our organisations.
Why is change necessary?
With increasing awareness comes responsibility and I think there has been a generational shift in this respect. The younger generations of consumers are much more aware of the sustainability agenda, and much less tolerant of tokenism. From the business perspective these consumers are forming an increasing part of our population of end-customers and colleagues so they rightly expect our businesses to be behaving in an environmentally sustainable way.
You are driving the sustainability agenda throughout the value chain. What change can we expect over the coming years in the sector?
Clearly with a growing global population there’s more pressure on the food supply chain and this has already manifested itself in rising commodity prices and increased volatility of supply. Supply shortages have become a recurrent theme, particularly where crop failure is an issue.
If you couple this with some of the food safety issues that have materialised in recent years then it’s unsurprising that leading Operators are taking a longer-term perspective on managing their end-to-end supply chain security and compliance.
Alongside these supply-side factors we’ve still got significant pressures on the demand-side with increasing competition for the customer’s spend. In order to maintain competitiveness, foodservice operators are likely to adopt a broader perspective in managing the supply chain – identifying ways in which it can leverage greater benefits in terms of removing waste and inefficiency but also by improving supplier choice and supply chain resilience and flexibility when dealing with the increased volatility of supply.
Why is it important to Kuehne + Nagel to work with Footprint to affect change?
We’re delighted to be part of the debate about how all operators in the sector can work together to share best practice. We’re keen to share what we’ve learnt, and to learn from the experience of others. Footprint is a great platform for the industry to share experiences and to promote more collaborative ways of working.
The need for greater efficiency and sustainability in supply chain operations is being driven from both the supply and the demand side, and in order to maintain the progress that’s already been made I think it will be increasingly important for different parts of the supply chain to co-operate together to achieve ongoing improvements.
Do you have engagement from your clients?
Absolutely. And that’s because whilst we may be responsible for different aspects of the supply chain we share the same goal – to deliver a great service to outlets using the most efficient, cost effective and sustainable supply chain possible. In order to do this we’ve learnt that we have to work with our customers in a much more dynamic and collaborative way and its working in this way that helps us all unlock new efficiencies.
Where do you see Kuehne + Nagel in 5 years?
I’d like to see us taking a taking a leading role in broadening the perception of the supply chain and what it can do for operators – moving away from the traditional view of it being about ‘delivering cases of food’ towards being seen as a means of delivering the Customer promise. This calls for a more collaborative approach, and I think that’s an exciting opportunity for the sector.
Kuehne + Nagel is a global, financially strong logistics business and we are a committed long-term player in the sector. We’re fortunate to have enjoyed strong growth in our foodservice operations and obviously we’d like to see that progress continue. We want to be the market-leader in Foodservice logistics within the UK and have a vision of creating the best-invested network, delivering the best quality of service with the greatest efficiency to the UK’s leading foodservice operators.