Overcoming business challenges sustainably
The current business environment is challenging for the logistics sector. Many consumers are buying less while also demanding lower prices. The result is reductions in shipped volumes and price pressure throughout the whole supply chain, including logistics. There are different ways a company can react to this environment. Some might consider lowering their quality of service in order to lower costs. Others, however, see this business climate as a chance to increase efficiency and lower costs by applying innovation rather than elimination, and to enhance their positioning to take full advantage of the next market upturn. Panalpina clearly takes the second approach, and our sustainability initiative factors prominently in this business direction.
Global Supply Chain Management, the key focus of Panalpina's vision and strategy, has great potential to increase savings not only of energy use and emissions but also logistics costs. SMEs, in particular, can profit from highly efficient logistics solutions to control costs in a difficult market. Panalpina is well positioned to provide them with full-service solutions, and in return can benefit from attractive margins and risk diversification that the SME market offers. But for all clients of all sizes, greater cost awareness is increasing their acceptance of more sustainable solutions that increase the proportion of low-emission legs of shipments like ocean freight, and increase fuel efficiency in all shipment modes. The flexibility of Panalpina's asset-light model allows us to make such shifts more easily than competitors who own more aircraft, ships, trucks or warehouses. Also, our financial flexibility, with a very low debt level, and our organizational flexibility, with a lean business structure, support our ability to react nimbly to market fluctuations.
To take full advantage of the benefits of our asset-light model, close partnerships based on fairness and trust with centrally managed processes in areas such as security and compliance are essential for Panalpina. Innovative solutions such as transport services with low and transparent carbon footprints must include our partners to be successful. And employees that think globally and share responsibility with openness and appreciation are the foundation of operating a successful global network of business relationships. In 2009, we again increased our positioning in these regards. We were admitted as a signatory member to the World Economic Forum's Partnering Against Corruption Initiative (PACI), introduced a company-wide environmental data monitoring including CO2 emissions, and conducted our first global Employee Engagement Survey.
I am confident that Panalpina has an excellent foundation for sustainable growth. We have the global footprint, deep industry know-how, and strong centralized processes and systems to use our asset-light model to enhance our position within the industry in the current challenging market. An increased globalization evolving around several global economic centers offers substantial growth potential for the future.
Monika Ribar
Chief Executive Officer