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Things are stuck in global logistics.
This impression is imposed by the spectacular shipwreck in the Suez Canal as well as by weeks of delays in deliveries or record prices for container transport from the Far East.
Instead of the usual $ 2,000 (around 1700 euros), a container from China to Europe currently costs five times as much.
Transport space is also scarce and expensive in air freight because around 60 percent of passenger aircraft are on the ground.
In this tense situation, an unprecedented challenge must succeed: the distribution of billions of vaccine doses around the globe.
Detlef Trefzger, CEO of the logistics group Kuehne + Nagel, knows his way around the world of transport like hardly any other manager.
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WORLD:
Mr. Trefzger, buyers have to wait many weeks for laptops and other electronics from Asia, and bicycles or sports equipment from the Far East do not arrive either.
What is going wrong in global logistics?
Detlef Trefzger:
In fact, we are currently experiencing several bottlenecks in international ship transport.
This is primarily due to a huge surge in demand from private households in Europe and also in the USA.
In the corona pandemic, people order huge quantities of goods for the home, garden or sport, which often come from Asian production and are transported across the oceans.
At the moment there is not enough shipping capacity for this and, above all, not enough containers.
This leads to faults in the ports.
Last year in February we had a punctuality of the ships of 70 percent, this February this figure was just 35 percent.
The waiting time in front of the US ports is currently more than two weeks.
In turn, the industry lacks these containers for loading.
WORLD:
Even if that is certainly not the most pressing problem at the moment: But does that mean that, for example, new sports shoe models from Adidas, for example, will no longer arrive at all in the spring?
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Trefzger:
That doesn't necessarily mean that logistics often find a different solution.
To make the transport of seasonal goods faster, we unload ships in Dubai, for example, and fly the goods from manufacturers of sporting goods or textile manufacturers to Europe or North America by cargo plane.
In addition to the combination of sea freight and air freight, there is also a rail connection between China and Germany.
The situation will continue for a while.
I don't expect the traffic jams to clear until the third quarter and ships to be on time again.
WORLD:
Isn't Kuehne + Nagel making a huge profit at the current record prices for container transport in the five-digit dollar range?
Trefzger:
No, we won't do that.
We don't set the freight rates either, the shipping companies do that.
We pass the prices on to our customers.
It is true that prices have risen sharply, but that is the law of supply and demand.
For a 40-foot container from Shanghai to Santos in Brazil, for example, $ 10,000 is currently required; before the pandemic, around $ 2,200 was common.
There are fluctuations of this kind in shipping.
Five years ago, this container cost just 50 dollars at times due to excessive capacities.
However, the current record prices only affect spontaneously booked transport.
Contracts for several months to a year are common with major customers.
The maritime transport market is currently on the upswing, then prices will also change.
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WORLD:
Air freight is now more important than sea transport: Several billion doses of vaccine against the coronavirus are to be distributed worldwide.
Do you know the dimensions?
Trefzger:
We expect twelve to 15 billion vaccine
doses
to be distributed.
That corresponds to less than 1,000 full loads of a Boeing 747 cargo aircraft.
Around 60 percent relate to air transport, the rest is driven by road.
Despite all concerns and prophecies of doom, logistics shows that it can cope well with the challenges of maintaining the temperature of the vaccines, for example.
To make the dimension clear: Before the pandemic, for example, only 600 million vaccine doses had to be transported worldwide for flu vaccinations.
WORLD:
Recently, capacities were scarce in air freight because there was a lack of storage space for transport due to the lack of passenger flights.
Does this affect vaccine logistics?
Trefzger:
We no longer have the problems today.
It is true that in times before the pandemic, we handled 60 percent of air freight by loading passenger aircraft.
But after the outbreak of the Covid-19 virus, 90 percent of these aircraft remained on the ground.
In my estimation, it will take until 2023 or 2024 for the aviation business to normalize.
Since then we have completely switched our air freight over to cargo planes.
We only use around ten percent of our passenger flights for this.
This applies to the domestic market in China, for example, where many flights are taking place again.
WORLD:
In which countries and regions does Kuehne + Nagel transport vaccines?
Trefzger:
We
prepared
ourselves for this task in our 248 pharmaceutical centers around the world last June, without knowing whether there would be a vaccine at all.
I think it's sensational that the first vaccines were ready so early.
For example, we have received orders from the manufacturer Moderna for the entire distribution outside the USA.
For Sinovac Biotech from China, we take care of the transport to, for example, the Ukraine or the Dominican Republic.
In Germany, the Ministry of Health in North Rhine-Westphalia has entrusted us with the logistics right through to the clinics.
By the end of March, we had shipped around 50 million vaccine doses around the world.
In the second quarter it will be five to seven times that for us alone.
But we prefer to work in the background.
WORLD:
Why in the background?
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Trefzger:
The orders come from several EU countries as well as from North and South America.
We operate two central transhipment points for vaccine doses in Europe.
You will not find any photos of them, nor are the place names mentioned.
The trucks we use to deliver the vaccine do not bear our corporate logo.
In some regions, the drivers are accompanied by the police or the armed forces.
The Covid-19 vaccine is a safety product for us.
Fortunately, I am not aware of any incidents so far.
Incidentally, we win these orders in competition and do not generate any extraordinarily high income with the vaccine transport.
We want to show what we can achieve and ensure that society is supplied.
WORLD:
Even if the transport of the vaccine is essential: Doesn't the logistics have to be limited and organized differently so that it no longer pollutes the environment as much?
Trefzger:
It's true, global transport needs to be optimized.
Today it causes seven percent of global CO2 emissions.
We ourselves have been climate-neutral for our emissions in storage facilities, offices, when traveling or in our own truck traffic since last year.
We want to achieve this for all of our services by 2030.
This then also applies to ships or aircraft that we use for our transport by other companies.
We are working on 300 climate neutrality programs worldwide.
WORLD:
Kerosene and heavy oil still dominate the propulsion of airplanes and ships.
Where are the alternatives?
Trefzger:
In air freight, we recently bought eleven million tonnes of
bio-kerosene
together with American Airlines, thereby making climate-neutral cargo flights possible.
For example, recycled waste oil or fats from restaurant kitchens are used for this.
We also use biofuels in shipping.
The difference in emissions is huge.
With our data analysis, we can calculate the environmental impact of every ship that is sailing for us.
In one example, we measured two and a half times the CO2 emissions of the worst cargo ship on a route compared to the best value.
There are many factors for this: In a storm, it depends on whether the captain drives at full speed through the middle or around the outside of the storm area.
This has a major impact on consumption and emissions.
It's the same as driving a car.
WORLD:
Logistics was the focus of interest when the spectacularly crashed ship “Ever Given” blocked the Suez Canal.
It was said that the entire car production at VW could come to a standstill due to the consequences - is that correct?
Trefzger:
We were far from chaos and catastrophe.
If the closure of the Suez Canal had taken longer, industrial production would certainly have been impaired.
But there would have been alternative modes of transport and routes.
The often mentioned computer chips, which are currently in short supply in the automotive industry, for example, are transported here from Asia by cargo plane and not by ship.
This delay is not due to the logistics, but to the manufacturers' production bottlenecks.