Logistics

Forwarding | Warehousing and Distribution

A Q & A with K + N ’ s head of ocean logistics By Lori Ann LaRocco

Michael Aldwell entered the shipping industry 16 years ago in his native New Zealand as a project manager for Kuehne + Nagel ’ s ( K + N ) local contract logistics business . He now heads ocean logistics for K + N , the world ’ s largest forwarder .

Lori Ann LaRocco : The logistics world has faced a lot of headwinds recently . We are now looking at the threat of ( 10 %) tariffs being implemented on China . What is the reaction from the logistics side ?

Michael Aldwell : From the companies that have a high density of manufacturing in China , they are looking for a diversified supply chain strategy . We ’ re seeing a continuation of the trend that we saw for the last seven , eight years , since Trump was first in office . And that is , “ Can you help us and support us with this continuation of offshoring ?” I think realistically , that ’ s something that ’ s going to continue to be omnipresent for the coming four or five years .

“ We ’ re seeing a continuation of the trend that we saw for the last seven , eight years .”

LaRocco : What implications do sourcing shifts out of China have on how you serve customers ?

Aldwell : Supply chain diversification feeds into the needs of a logistics enterprise because as the supply chain gets more complex and more diversified for an importer or an exporter , it ’ s harder to replicate the network of a global logistics provider by yourself . We see expansion happening in Vietnam and Malaysia . I just came back from Indonesia , and we see substantial growth there . That economy is amazing . You have 280 million people in Indonesia . I think it ’ s one of the most unappreciated economies in the world .

We are also seeing footwear manufacturing moving to Central America , so we see the need to be able to service complex international supply chain programs in Central America at a greater density than we have had in the past . I think that trend is beginning to accelerate little by little . We still see trade growth coming positively out of China . The early weeks of pre-Lunar New Year and late fourth-quarter trends were relatively poignant in terms of the build out .

LaRocco : How long does it take for you to pivot to capture that emerging growth ?

Aldwell : It depends on the scale . It also depends on what modality you want to take to do that . We have a network existing today in more than 100 countries , so what we ’ re now seeing is increasing density in existing manufacturing zones more likely to be targeted areas from a tariff perspective . You can scale quite quickly . It can take weeks and months instead of years because in most of these places , we have an established footprint .

What ’ s different is port capacity , terminal capacity , getting equipment into the right places when things are moving around . That takes time , but actually getting ships in the right place is not so hard because you can push steel through water in most places . Getting the logistics enterprises scaled up and running is a challenge , but it ’ s not something that we ’ re not used to . LaRocco : What about India ? Aldwell : What we see at the moment is really strong growth in the Indian marketplace . I think there are two things going on India . One is the growth of India as an outsource manufacturing hub where you see , as one of the beneficiaries of outsourcing from China , the risk from China because of geopolitical events . The second is the scaling in India consumption . It is the world ’ s largest population . Indian consumers are becoming wealthier . There is a growing middle class in India , and that ’ s driving consumption for imports , as well as the need to get raw materials for the manufacturing supply chain , so there ’ s a lot of investment that needs to go into India ’ s terminal infrastructure , the rail infrastructure . And we see progress there . We see a lot of [ capital expenditures ] going into that space .

LaRocco : We know that companies had been frontloading due to the combination of tariffs , the ILA strike , and the threat of another strike [ in January ]. In your future orders , are you seeing shippers starting to pull back some of that freight that went to the West Coast back to the East Coast ?

Aldwell : I think that ’ s a natural trend and we ’ re seeing that happen . We ’ re seeing some of that cargo starting to go back to the East Coast . As shippers go into the new year , they have been pointing to more locations across the US to make sure they are diversifying their supply chain by using the East Coast and Gulf ports .

LaRocco : Maersk and MSC recently came out saying they ’ re going to continue going around the Cape of Good Hope , which , while it is longer , provides more stability and certainty in the logistical supply chain . Are there things out there that you ’ re concerned about that would add to volatility and uncertainty ?

Aldwell : I think there are a few big events that are going to happen in the future . One is , I think , the assumption that the ocean carriers will quickly go back into the Red Sea . I think that is being dispelled now by the few announcements and I guess there will be probably some more to come . Most likely , it ’ s going to take some time to build confidence that that route will be safe ... What we are looking at is the insurance markets . You still can ’ t get insurance to sail through the Bab el-Mandeb Strait . Only when

38 Journal of Commerce | March 3 , 2025 www . joc . com