At Kerry, Rail Competes with Air

Exports from Europe to Asia are an important business for Chinese agent Kerry Logistics. In days of ocean capacity constraints air cargo has increasingly to compete with rail, says Thomas Blank, Managing Director Europe.

First Kerry managed cargo train coming from China arriving in Madrid
First Kerry managed cargo train coming from China arriving in Madrid

Kerry Logistics was set up more than 30 years ago in Hong Kong. The company claims to be the first Asian 3PL moving eastbound freight form Europe to Asia. Last April the company launched a direct rail service from London to Yiwu, an inland destination in eastern China.

The journey took 18 days, passing through 9 different countries. In 2016 a westbound service connected Yiwu with Madrid. These cargo trains are part of the ‘One Belt, One Road’ initiative, the 21th century version of the ancient Silk Road, pushed forward by Beijing’s rulers. “The train is somewhere between sea and air,” states Blank. “Especially for inland destinations in China it could turn out to be an attractive option, shortening the time-to-market considerably due to faster lead times compared to steaming.”

Frankfurt HQ
The company’s most important verticals are automotive, food and beverages, and fashion for which Kerry offers front and back warehousing and distribution. The European headquarters is located in Frankfurt; important office locations in Europe are Bremen, Gothenburg, and Manchester.

The latter is the main UK HQ, says Blank. “We have some historic business there.” When asked about the possible impact of Brexit he admits that the UK taking up the model of Norway or Switzerland would be “the healthiest situation.”

In Asia, Kerry Logistics has its own assets, both heavy (warehouses) and light (equipment and fleet). In Europe, everything is outsourced. The key warehousing operations are located in Rotterdam, Milan, and Gothenburg. As for air cargo Kerry collaborates with some 10 preferred carriers.

Fashion and automotive
About 80% of the air freight volumes is shouldered by five carriers, says Blank. “On some trade lanes, like Latin America, we sometimes have to select outside of this group of ten.” The selection is made by Kerry Logistics itself, based on frequency and transit times. Gone are the days that shippers would use their influence in this selection.

Thanks to its extensive network in Asia, Kerry Logistics has grown into a specialist in Europe-to-Asia exports. So far, pharmaceuticals have not been a real point of focus for Kerry Logistics, with Asia being the exception. Fashion is mainly flown from Milan-Malpensa and Paris CDG, but also from the UK, Spain, and Germany. The Brussels office deals with air as well as sea cargo, larger parts of the shipments consist of spare parts for car production in Asia.

In 2016 Kerry Logistics acquired U.S.-based NVOCC Apex, thereby expanding its global reach considerably.
 
Marcel Schoeters in Brussels

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