Kuehne & Nagel announced: Global organizational structure overhaul

Source: China Shipping Weekly

The new organizational structure will increase the speed of decision making in Kuehne + Nagel's business and functions, while ensuring maximum consistency across the global business and rapid response to customer needs.

On April 8, Kuehne+Nagel, the world's largest maritime freight forwarder, announced that it will adjust its global organizational structure, cancel the existing global regional management level, and the heads of branches in each country will report directly to the headquarters, thereby streamlining and optimizing the organizational structure.

The new organizational structure will increase the speed of decision making in Kuehne + Nagel's business and functions, while ensuring maximum consistency across the global business and rapid response to customer needs.

It is worth noting that streamlining the structure often means personnel changes. In response, a Kuehne & Nagel spokesperson revealed that the restructuring will affect about 1% of the company's employees, most of whom will be transferred to the new functions.

It is understood that Kuehne + Nagel's current global workforce is about 81,000 people, and about 800 employees are affected.

Joerg Wolle, Chairman of the Board of Kuehne + Nagel Group, said: "With the removal of the global regional management hierarchy, Kuehne + Nagel is streamlining its organizational structure to create conditions for further efficiency improvements in order to act faster and more flexibly in a rapidly changing market."

For Kuehne & Nagel's organizational structure adjustment, there are also some doubts.

Anthony Miller, an industry consultant, said: "Kuehne & Nagel's move may indicate that the company is improving the shortcomings of the old management structure. In any case, it seems that all logistics companies are moving to a more centralised organisation."

Bill Paul, founder of Logitalent, a Us-Based recruitment firm specialising in freight forwarding, said: "The removal of the global regional management hierarchy is more like mimicking DSV's organisational structure. As for whether it is closer to the customer, there are still questions. "Based on how Kuehne & Nagel laid off a lot of relationship managers in recent months, I think they may be getting further away from their customers."

It is understood that Kuehne + Nagel is currently in a new round of recruitment freeze. In February, Kuehne + Nagel CEO Stefan Paul explained: "The current market environment is challenging, which affects not only Kuehne + Nagel, but also the logistics industry as a whole, which requires us to take immediate action to reduce costs. In view of this, Kuehne + Nagel is suspending recruitment globally as of February 12, 2024."

In addition, in response to the sluggish market, Kuehne & Nagel has implemented a variety of cost control measures since 2023. In the fourth quarter of 2023 alone, Kuehne & Nagel incurred 53 million Swiss francs (about $58.554 million) in special layoff expenses, but did not disclose the specific number of layoffs.

In March 2023, Kuehne & Nagel also announced the "2026 Strategic Development Path", which aims to significantly improve profitability while continuing to implement the asset-light model in the next four years.