Sustainability Report 2017

Do it right – the first time!

 

 

Secure, Safe and High-Quality Services

 

For Kuehne + Nagel, it is imperative to create a secure and safe environment in all countries we operate and for all parties involved. This is reached by harmonising  operational standards across business units and countries and allows us to develop solutions and services that improve confidence and customer satisfaction.

 

Product Quality and Safety 

We continuously focus on fulfilling customers’ demands by studying their individual requests and design tailor-made industry solutions.

 

In 2012, Kuehne + Nagel has started to develop its cross-divisional KN PharmaChain solution to comply with increasing regulatory requirements and customer demands to focus on patient’s safety. Five years later, in 2017 this has become a recognised customer solution with a network of close to 200 certified sites for seafreight, airfreight, overland and contract logistics. The concept entails a full bill of material, similar to manufacturing production, where formula, recipe and processes are clearly defined, rolled out and implemented. As the first logistics service provider, Kuehne + Nagel has received a GXP pharma compliant network certification by IATA CEIV (Center of Excellence of Independent Validators) for all of its 88 GXP airfreight sites worldwide.

 

Performance

KN EngineChain, Kuehne + Nagel's solution for the aerospace and aviation industry complies with specific requirements when handling aircraft engines of all sizes. At the end of 2017, the network was comprised of 50 certified sites.

 

With KN BatteryChain, which was launched in 2017, Kuehne + Nagel has set a new safety standard in the lithium battery supply chain. A new business stream with five qualified hubs, focusing on automotive, high-tech and consumer goods, has been established. Standardised work processes have been created, ensuring safety and reliability, avoiding non-conformities in the handling, storage and transport of lithium batteries. A focus in the reporting year was the successful recertification of the applied standards ISO 9001, ISO 14001 and OHSAS 18001, resulting in a total of more than 1,500 accumulated ISO certifications. The 2015 revision of ISO 9001 allowed us to better define the processes in today’s supply chain logistics, as well as to identify and correct shortcomings by means of proper documentation, training and monitoring. This will further facilitate communication with customers and other parties involved.

 

The thoroughness of a solid process management is underlined by more than 880 branch quality audits conducted and more than 4,300 department reports issued where potential improvements have been agreed and implemented. With over 10,000 non-conformities and potential improvement records, these efforts are indicative of an increasing acceptance of new opportunities to provide a smooth supply chain for our customers.

Dangerous Goods

Dangerous Goods (DG) compliance has been improved based on a global applicable audit and risk structure that provided better visibility, corrective and preventive action. A sample size of 998 audit reports containing DG information – approximately 25 per cent of all locations audited – revealed an overall compliance level of 85 per cent. 


Clear improvements were made in the establishment of a structured DG Safety Advisor network, the implementation of the internal global guidelines as well as the cataloguing of High Consequence Dangerous Goods. Through auditor training, the quality of the audit replies was improved, allowing for the identification of potential hidden DG in several regions.

The standardisation of the internal approach to DG has opened up new business opportunities. Internal guidelines on forbidden DG have been systematically implemented. This was combined with a rigorous exemption process for locations that wish to engage in the carriage of such cargo. It also allowed for greater control to be exercised over these types of transport. Where exemptions were granted, the consignments were handled with great care. In total, seven exemptions were granted globally in 2017. 

Improved compliance reporting and the increasing trend towards drive electrification have resulted in exciting market opportunities for Kuehne + Nagel. The company has therefore launched KN BatteryChain, a new global and cross business unit programme for the storage and transport of lithium batteries.

It was presented for the first time at the IAA (International Automobile Exhibition) in Frankfurt in September 2017. Since then, five locations have met the chain’s demanding criteria: Frankfurt (DE), Tokyo (JP) and Seoul (KR) have successfully certified for airfreight, Gärtringen (DE) and Niederaichbach (DE) for contract logistics. Locations must not only comply with all applicable DG regulations. They are also required to meet the ISO 9001 standard and the automotive industry quality standard ISO 16949. An ambitious plan to successfully qualify 32 additional locations worldwide has been rolled out. KN BatteryChain aims to further strengthen the company’s network of specialists by facilitating the close cooperation of QSHE and DG professionals.

Important product features of KN BatteryChain are to:

 

  • increase safety and reliability through standardised processes,
  • reduce CO2 emissions,
  • manage consumption, and
  • prevent pollution and recycle

Customers are invited to make use of information derived from Kuehne + Nagel’s Global Transport Carbon Calculator (GTCC) and the Global Facility Carbon Calculator (GFCC). To identify trends and rectify non-conformity, comprehensive reports are created from the company’s transport and warehouse activities. Being part of KN BatteryChain, the certified locations focus on providing eco-friendly waste management (including hazardous goods and electronics). Only accredited and licensed suppliers are accepted. The Supplier Management Tool (SMT) lists all business partners. To ensure high levels of compliance and service quality, great care is taken to make them aware of their responsibilities.

Product and Service Innovation 

At Kuehne + Nagel, security is managed under the QSHE organisation by a dedicated Corporate Security Manager and the support of a global Quality Expert Security Team.

The aspects of Security

 


Kuehne + Nagel’s security management system is designed to fully comply with applicable regulatory and industry security standards.

 

Kuehne + Nagel is a member of the government business supply chain security programme Authorized Economic Operator (AEO), established by the World Customs Organisation (WCO). The company currently holds AEO certifications in 32 countries (out of 109), including global certification of the US security programme Customs-Trade Partnership against Terrorism (C-TPAT) and the Canadian Partners in Protection (PIP) programme. By participating in these programmes, Kuehne + Nagel aims to strengthen and assist the end-to-end security of international supply chains, and to foster the legitimate trade of our clients by being granted facilitated custom procedure resulting in shorter lead-times. 

 

Furthermore, in line with additional customer requirements, 11 hubs have been certified in accordance with TAPA (Transported Asset Protection Association) FSR security criteria.

 

As a leading global logistics provider, we strive to provide our customers with a robust security management system across the entire supply chain to mitigate the potential risks of theft or acts of unlawful interference wherever possible. We continuously seek to create a stable and predictable environment, allowing our customers to pursue their business without disruption or harm and without fear of disturbance with regard to the freight entrusted to Kuehne + Nagel.

 

In order to comply with these governmental requirements and to meet contractual obligations where Kuehne + Nagel has signed customer contracts with specific, enhanced security standards, the Quality Expert.

Constant decrease of loss values over the years

 

Security Team and global QSHE organisation have developed and established a three-tier KN Secure-Chain certification scheme. It is based on ISO 28001 standards and enables sites to become KN SecureChain certified depending on the scope of activities performed. Based on business demands and requirements by the end of 2017, Kuehne + Nagel certified 35 branches for KN SecureChain. 

 

Innovative solution

In order to improve the working conditions for drivers and to mitigate risk exposure to drivers and customer assets during overnight rests, Kuehne + Nagel and International Road Union (IRU) agreed on usage of TransPark certified parking places. These places provide a safe and secure area with necessary infrastructure to ensure reaching final destination in safe condition.

 

Highlights:

  • Continuous reduction of theft ratio
  • Kuehne + Nagel appointed by IRU to certify parking places  
  • 28 European parking locations vetted by Kuehne + Nagel in 2017
  • Expansion of vetting to other regions in 2018

Occupational Health and Safety

Kuehne + Nagel continues to build on the safety culture and leadership of the company. It’s our ambition to achieve the highest level of health and safety for all parties involved in our operations: employees, customers, contractors and the general public. To accomplish this, the “No Harm” campaign is being continued.

 

Through its OHSAS 18001 certified and compliant Occupational Health and Safety management system, Kuehne + Nagel ensures continuous improvement. Contractors and third parties are required to meet the safety standards and to stop an activity if it is thought to be unsafe.

Top goals of the “No Harm” to people campaign

 

Safety Pyramid

 

 

These reported situations are used to learn from and identify areas for improvement. 

 

The Global Expert Team Safety and Health has started to develop the second phase of the “No Harm” campaign; a module for warehouse supervisors. This module is currently being introduced and will ensure the journey to “No Harm” will continue.

 

The Middle East and Africa launched the “Get Home Safe” campaign. As part of the campaign all employees undergo training in defensive driving. Further instruments and tools in place are the “seat-belt convincers”, roll-over simulators and awareness training. The campaign will continue to be rolled out within Kuehne + Nagel in 2018 and beyond.

 

The Global Safety and Health Policy Manual has been reviewed and re-issued to ensure we stay aligned with international labour laws and standards.

 

Rules for reporting incidents have been further improved, especially the reporting of lost workdays needed further alignment between the regions. Whilst the second half of 2017 was excellent, the first half recorded two fatal accidents. One fatal injury was related to warehouse operations. This warehouse incident triggered an investigation with the supplier how to better secure the driver cabin of a forklift. The other fatal injury happened when, on his way home, a Kuehne + Nagel employee became involved in a road traffic accident. In the face of this tragedy, immediate actions were initiated, including the launch of the “Get home safe” campaign.

 

The CEO and management are fully committed to support any action necessary to prevent any future  harmful incidents of employees or contracted third parties.

  2017 2016
Kuehne + Nagel Group (all Business Units)
   
Number of Fatalities (FAT) 2
Lost Time Injury Frequency (LTIF)* 15.93 14.95
Total Reportable Case Frequency (TRCF)** 19.30 21.66

  * LTIF – The number of LTI’s per 1,000,000 working hours
**  TRCF – The number of TRC’s per 1,000,000 working hours

 

 

 

 

During the reporting period an increasing number of lost time incidents were recorded. This is partly due to improved alignment with reporting. The severity of the injuries decreased and the number of lost work days saw a reduction of 15 per cent to 47,984 days.

 

The Lost Time Injury Frequency (LTIF), which was initially introduced in 2016, increased to 15.93, while the Total Reportable Case Frequency (TRCF) decreased to 19.30.

 

The increased numbers can be explained by the rigorous changes in Safety and Health KPI definitions in 2016 and the first half of 2017. The “No Harm” to people initiative and a stable reporting quality have resulted in an impressive improvement in the second half of the year.

 

Employees and Third Parties

Every reasonable precaution is taken to protect the health and safety of employees, of the people working for us, as well as of the people in the environment we work in.

 

We require employees and suppliers to adhere to all compliance obligations, relevant regulations, rules, work instructions and safety measures at all times. 

 

We also urge everyone to stop potentially unsafe acti
vities immediately and to report unsafe situations to supervisors.

 

The increased number of employees and the continuous expanding network of Kuehne + Nagel locations require a constant training effort by the QSHE team members. Face-to-face and online trainings ensure employees are aware of worksite hazards. Trainings are provided on 
a global level, as well as on national and local levels. On a daily basis, supervisors and team leaders make certain that rules, regulations and prescribed work procedures are followed. Daily visual checks and regular inspections of the workplace are conducted to identify hazards and potential risks, and to inform employees accordingly. Employees carry out pre-use checks on the equipment they use. They have been provided with and are required to wear personal protective equipment (PPE) when job hazard assessments identify the need for it. To be prepared for emergencies, business continuity plans are available and emergency drills are carried out on a regular basis (e.g. fire drills).

 

All contractors and sub-contractors working in our 
facilities are made aware of the safety and health policy prior to commencing any activity. We are in good standing with the applicable Workers Compensation Board and provide third parties with verification from the Board. Visitors are required to register with our reception desk or gate upon arrival and departure; they receive a safety introduction on what to do “in case of”. Visitors are at all times accompanied by an employee to minimise the risk of injury or incident.

 

Facilities

Facilities hold regular safety committee meetings during which any health and safety issues are recorded. In addition, regular inspections are conducted. These include, but are not limited to checking:

 

  • First aid kits
  • Fire extinguishing equipment
  • Safety and housekeeping
  • Accessibility of emergency exits
  • Emergency signage
  • Lighting

Safety procedures are made available both in written form and online training formats in the respective local languages.

 

Highlights

  • Prevented incidents or injuries that lead to illness
  • “No Harm” for warehouse employees stimulated reporting of unsafe acts and unsafe conditions
  • In Brazil we received an “Excellence in Safety” Award from one of our major client.

Data Privacy and Security

Information Security Management supports Kuehne + Nagel's mission and business objectives. Effective management of risks concerning the confidentiality, integrity and availability of information assets is essential to Kuehne + Nagel achieving its mission and business objectives. Information Security Management promotes and enables the effective management of risks to information assets according to established standards, best practices and a process of continuous improvement.

 

Risk management will be comprehensively integrated into all of Kuehne + Nagel's business processes. Risk-based decision support throughout our business will foster the ambitious pursuit of opportunities and the effective response to, and recovery from, adverse events. Customers, partners and others will confidently entrust information assets to Kuehne + Nagel as an extension of their businesses.