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[Music] hello thank you for joining us for today's webinar my name is tag lucas and i'll be in the background answering any of your technical questions today before we begin i'd like to give you a brief overview of your webinar console to ask a question go to the q a panel at the lower right side of the screen type your question select all panelists from the drop down menu then click send if you do not see the q a panel go to the bottom right side of your screen select the icon with the three dots then choose q a we encourage you submit questions throughout the session to preserve confidentiality questions will be read by our team and will not be attributed to you we will do our very very best to get to all the questions during the q a portion of our briefing but if we are not able to get an answer for you today we will follow up via email now i'd like to introduce our guest speakers ankit hello everyone gabriela hello philip hello without further ado i would like to introduce our host ludwig the floor is yours thank you and hi everyone great to have you on board thanks for joining thanks for the interest um i have assembled here a small panel from mckinsey all experts in the space of logistics we have uh ankit who is our corporate finance and a value creation expert and having a a broad history in serving our clients and logistics and we have um philip who is associate partner in germany serving ocean state and logistics players and lastly gabriela who is leading our research in the space and myself and partner and yeah one of the leaders of our logistics practice with that let's continue and dive right in and if there is a question you see the panel on the right lower side as explained before you can drop questions uh we encourage you to do so to get a lively discussion going and with that now to the scope and content of our webinar and as you probably have seen in the in the advertising of today's session um if you move to the next page we have looked at logistics differently than in the past we have felt that um the recent um yeah crisis which a lot of with a lot of very short-term movements uh and the the covet impact that has been largely also positive for logistics and has even um increased the short short term focus of of the players in our industry while at the same time we believe that there are some universal truths about how to grow to outperform and create value as a logistics player and therefore we said no let's not do a short term view again let's look back far in history over the last almost 20 years so what have we done and analyzing a big sample of ocean freight contract logistics um afraid forwarding companies trucking parcel and freight rail players and looked at their performance in terms of growth in terms of profitability in terms of a return on invested capital and a share out performance and looked at that across a distinct set of of time series so we between 2003 and today we had kind of two cycles of strong growth the first 2003 to 2007 then we had the financial crisis and then after a slow return 12 20 11 to 20 18 19 was again a strong growth cycle so we wanted to really understand who has managed through those cycles to outperform the in its disproportionate returns and that's discussed with you and we cluster companies in various um buckets but the more most of the time on now are these through cycle environment i hand it over now to to ankit who will explain in more detail and what it is about and here you go thanks ludwig uh happy too so essentially we looked at a broad set of logistics companies from two lenses one is the top line growth and second is the economic profitability now there are a particular set of companies which have outperformed on a top line growth across multiple economic cycles and we name them as revenue out performers now there is a second type of category of companies which have outperformed on economic profitability and we name them as profit outperformers and of course there is also an intersection of both of these so essentially companies which have outperformed both on top line growth as well as economic profitability and that's our third category which is profitable revenue out performers now when we looked at profitable revenue outperformers we try to distill it further with two additional behavioral aspects one is how many companies have actually delivered positive economic profitability out of these so essentially companies which have at least delivered minimum investor returns on the minimum investor returns expectations uh so essentially roic equal to cost of capital that's the minimum filter and second trait which we applied here is companies which have been resilient enough during the crisis period with higher trs than the industry average now uh now when we looked at these companies these four categories one of the interesting observation is that majority of the companies close to 68 percent have focused on profitability 52 percent of the companies have focused on top line growth and still a very large sample set of companies close to 40 percent have focused on both of these dimensions but only one out of eight companies have demonstrated the traits of through cycle outperformers and these through cycle outperformers have been have been rewarded very well by market with higher trs if we look here i mean the through cycle outperformers delivered a trs of close to eight percent which is twice the levels of industry average of three to four percent so essentially in a nutshell these through cycle outperformers delivered twice the growth as industry average five percent higher economic profitability than industry average which in turn also translated into twice the returns to shareholder compared to industry average and when we looked at the distribution of these through cycle outperformers by sub sectors we observed three trends first trend is that there has not been any single sub sector which is leading the pack in terms of these through cycle outperformers so essentially we see like a mixed distribution across subsector second is that at least for some of the sectors like freight forwarding uh trucking and freight rail we observe that they have a relatively higher proportion of through cycle of performance and third trend is when we look look at the distribution on a more on a regional basis we observe that most of these through cycle outperformers have majority of their business in north america but still when we look at the overall sample set we still see like a a huge variation in their performance whether it is an economic prod economic profitability growth margin or trs now one one natural question which it raises is what these what do these through cycle outperformance uh did differently what common strategic themes come out of it right which can also help us for future value creation trajectory uh and i'll request ludwig to come again right and share uh on that thank you ankit yeah so in general we distilled three themes if we move on to the next page three themes on which truth cycle outperformers focused and and and that is pretty clearly visible so first they have grown the core um in a kind of on on the basis of competency performance optimization continuous improvement a standardization uh leveraging of scale effects and i'm going to go into a bit more detail on that the second common theme is they have grown also inorganically so they have built a proven m a platform to adopt a programmatic approach to m a what does that mean it's kind of not opportunistically do one deal when it kind of there is an opportunity but rather constantly scanning the market and having you on which um areas geographically or in adjacent fields are the ones where we need to use inorganic growth to scale and then thirdly and that's probably the most interesting outcome of our research and and we'll see a bit more on that they had an anticipation of economic cycles in their investments so while most of the companies and we all all know that we have high capex spend many of our logistics segments most of the companies spend a lot on capex but when do they spend it the through cycle outperformers reduce spending in the early time phases of a downturn drastically but then as soon as the first glimpse of hope and the end light at the end of the tunnel is visible they already spent on capex quite a bit again so they outspent their peers at times where hanging up again and and the non outperforming different pattern you'll get to see it in a minute but let's spend a bit time on each of the three themes because we believe they they decide for for for you online and and we have a few basic samples with us today we move to the next page please so what does kind of growing the core through kind of focus on core competencies and performance optimization mean actually so first we have seen a companies that really kind of innovate and extend their competitive advantage in their core business by focusing on on econom economies of scale and building a kind of high quality higher service level network and we see that especially in the forwarding companies also in the trucking companies but actually actually across all and most logistics businesses are network businesses so really for a strong focus on improving the existing core and improving the competitive edge secondly a ruthless performance management aspect and that is a benchmarking culture on both the commercial and the operational side to never let the efficiency slip to continuously monitor to continuously improve the standards and roll the standards out and ensure it is adhered to standards and again some um forwarder and distributor company examples here then thirdly right now we are all talking about technology and digital but even in 2003 that through cycle outperformers already started to disproportionately invest into a technology platform and backbone to automate and standardize their processes and then some companies also within their core shifted to more profitable um elements of that core and i'll get to it in a minute if we now move on we have a couple of specific case studies here and and one is uh you all know the company so very they were probably the first to adopt a ruthless standardization across the globe in the air and ocean forwarding business which when they started used to be a very customized a very people driven business they replaced a lot of that by a strong i.t focus and standardization focus that also allowed them to be better performance managers and then obviously within their core they also focus on the high margin verticals where more value-added services could be sold and that is one uh case example if we go to the next we have a jb hunt in the u.s an example for within kind of the core the kind of large road freight space which is the largest segment of logistics across the world they have early on discovered in the very fragmented plain vanilla ftl space they can't earn their cost of capital and outperform therefore they went more into a intermodal dedicated contract services space and and a solution space and that already in the 1990s which um yeah by now uh it gives them a very very large customer base for instance in the um intermodal uh ocean freight so almost 25 to 30 percent market share in the kind of processing of ocean container imports into on the land side in the us and that is another quite striking example rewarded with a high value creation and and one more example i want to talk about on the next page is main freight it's a smaller company maybe not known to everyone that well but what's interesting about them is their origin is new zealand a market that is not known to be home to any out performer in any industry because it's just such a small uh a market but they have uh understood to replicate their winning platform of running trucking networks efficiently first and through mna first from new zealand to australia and then from australia to other markets in asia from there also through an acquisition into the united states and then finally into europe and uh therefore kind of with all of their kind of investments to their platform and processes have now a much larger scale and and would yeah distribute any investment across and that was probably the only chance a company from from that small market had to become a global outperformer with that i'm handing it back to gabriella talk us more through m a yes thank you ludwig so let me tell a bit more about our analysis of the m a approach of our through cycle outperformers group so we have looked into their activities in the m a during the crisis and we have come to a couple of quite interesting observations so first of all um our through cycle outperformers group have been using a much more the m a strategy than the other companies so we see that almost 70 percent more users among our outperformers group when we have looked um at the deals that this group uh was making during the crisis um we found out that we had uh 3.5 more deals um 3.5 times more deals among the full cycle outperformers however what is interesting is that the average deal value was around 10 percent lower than the deals made by the other players and those two factors pretty much fulfill the definition of the programmatic approach that ludwig mentioned earlier so we see that we have more deals but the average deal size is lower than the industry so there is this constant strategy rather than really i'm just chasing a larger one of opportunity when it comes to the focus of the deals um we see that the free cycle outperformers have been um slightly more interested in the moving into adjacent industry so a little over 20 percent more deals in adjacent uh sectors and um over like one-third of um folk more focused on the um deals outside of the geographic home market so expanding into other regions so also trying to pursue new opportunities in other geographies if we move to the next page yeah i will tell a bit more about how our other um our out performers group has performed in the uh capex strategy so here we have also um an interesting observation um when we compare the overall capex spend uh through cycle outperformers versus other companies we have uh well yeah quite a striking observation so our um our earth performers were much faster responding to the economic situation and during the time of the downturn they were able to slow down their capex to kind of reflect the situation on the market however where they were also um faster in observing the recovery and uh coming back to the normal so they were able to switch back to the capex capex expenditure track much faster whereas the remaining group of companies maintain pretty stable approach to the capex spend um when we move to the next slide yeah those those observations and uh like overall performance of our through cycle group and the view of the historical resilience is also um just driving to a question so if if this historical resilient resilience is reflected in the current performance in the current situation in the current covet 19 crisis and in order to answer that we have looked in the into the trs results in 2020 to see and compare how our through cycle outperformers is doing right now and the result is also um quite interesting so well we see that within this group we have like one percent of the total return to shell shareholders which might not be a great result however when we compare to the other companies um that resulted in the negative and trs we see that um they are doing much better than the overall industry so the historical performance has been in this case um really a good a good a good indicator of um current reaction to the crisis and let me pass back to the load to ludwig uh who will tell a bit more about the current covet 19 uh situation and the ways to address it yeah thank you gabriella yeah it's it's awesome to see i mean when we look at this page 19 we didn't analyze the outperformers of 2020 and compare them with the rest no we looked at those companies that have managed through cycle from 2003 onwards till the end of 2018 to be through south cycle out performers and it was actually then no surprise that also in 2020 especially in the first half of the year when the crisis hit they outperformed their peers again on a shareholder return and many other metrics by the way now what does that mean for for you all managing logistics companies today and going forward if we move on the next page we have basically our ladder of um yeah how to successfully exit covet 19 crisis and i mean obviously most of your companies and don't feel like in a crisis at least not from a demand standpoint because there is high logistics demand but still there is a lot of change happening in the industry and um while out of these this five-step framework resolving the immediate challenges and creating resiliency to stand through the immediate shock that probably most of you have successfully managed now the focus is really on the next three steps how can we create a detailed plan and what are the ingredients of a detailed plan to return to a pre-covet a scale or even a higher scale quickly and from point of today and how can we reimagine the own operating model and also the services to the customers uh in the in the next normal i think those two are really should be focused uh in executive teams at logistics companies these days and if i would think about some of the ingredients then it's pretty clear that one is around capex if we see and know that uh through cycle outperformers have typically accelerated in the middle of the curve or in the middle of the bend then you just need to find for yourself are you at that point already or observe very carefully when that point is arrived then really open up uh the investment uh to be ahead of the uh the rest of the group and and then other areas are again the m a topic how can i at least if i haven't been a programmatic m a company in the past how i can i start to be that going forward that doesn't mean you have to focus on any kind of companies that need to do fire sales right now but rather to prepare a plan to have this programmatic view on on m a and i mean the basics are still the basics also those need to get right around operational and commercial excellence and when i talk about realm in re-imagination then a few elements for logistics come to mind one is definitely the sustainability how can i grow with a more um kind of carbon neutral or even reduce my carbon footprint how can i attract customers by new products that are more economically friendly because that will be a a competitive edge in the future and there are obviously some some others we can talk in our q a in a bit um and with that obviously i i expect you you all have questions comments i would still say let's finish with an additional block of our webinar here where i will hand over to philip that is around how do we as mckinsey see um the next few years or next few months from a demand standpoint and an outlook standpoint so that you at least know what our baseline for a logistics outperformance going forward is and then we we get back questions philip over to you great many things and um i think given that we've had some extensive analyses of um how companies have performed in the past it will be also interesting to look back over this very different year of 2020 and what also happened in the logistics markets but also think through what the indicators and what the macroeconomic logics could be until we see actually that the supply demand balance could restore if we look on to the next page um i think you probably all are familiar that the supply and demand in the logistics market are out of balance at this stage and we've quite quite heavily seen particularly in the last quarter of 2020 that there was a significant change um from our perspective there are four items that i want to mention on the demand side we see that there was a significant shift from services consumption to goods consumption which pushed up demand by 10 we see on the capacity side or the supply side however that um ocean freight capacity was almost stable and air cargo capacity was significantly reduced because of the lack of belly capacity as you all know the the planes from the passenger sides are down to historically low levels and this in turn has led to significant utilization and then of course significant rate levels both in ocean air but also in the other logistics sectors and i think the key question for all of us is now when will we expect the trend reversal what are the indicators that we can look at to come come up with a with an outlook i try to give you a bit of an overview of the status quo what we see a bit of a focus on the united states in the following pages and then also um share as of now an outlook how how the the situation could pan out but i mean as we all know this situation is something that we have never experienced before and obviously all the projections can change depending on the situation out there great if we move to the next page just a brief look into into demand and historically for the past 60 years we've actually seen a gradual but steady shift away from consumption for goods towards a consumption in services from 55 percent down to 31 percent but now in 2020 the first time we had really a significant shift back and this shift that was worth more than 500 billion us dollars on an annual basis so that's quite quite a significant shift which probably not many in the market had anticipated in the beginning of last year when we were seeing lockdowns we say saw that capacity was taken out of the shipping market we've seen the challenges in the air cargo market but that situation is has now materialized and we still observe that demand for goods is pretty high in the markets on the inventory side which we come on the next page too this situation is confirmed and we see quite a difference to the financial crisis in 2008 2009 which of course was a completely different event because there was an economic event only not a humanitarian human humanitarian crisis as we are experiencing right now but in terms of the inventory sales ratios we see that there was a very short spike in this ratio indicating that the um that inventories were full but we see particularly on the retail side that the inventories are still at a historical low which means we expect that at some stage those inventories will have to catch up again if we take that now into the capacity view on the following page then we see that global ocean capacity has been sort of of course growing in the past decade but the rate of growth has significantly reduced and even though all the vessels are apparently out there on the market and on the on the oceans and not laid up we haven't seen such big capacity growth that would be able to account accommodate the significant roughly 10 increase in demand and that's why we've seen those exorbitant rates particularly on the far east and the trans-pacific routes where we see an increase of up to 89 for example on the trans-pacific um throughout 2019 to 2020 which is quite significant of course on the air cargo site um i think given the significant reduction in capacity that is a very similar effect um but of course the effect on the years is even stronger um just driven by the supply chain moving on to sort of the conclusion that we have um on on the following page in the end we think there are three key effects that we now need to look out to see how a potential supply demand balance restoration could look like first of all it's the gdp growth and we've actually seen that the world gdp is more tracking to towards something that indicates a return to pre-co with 19 levels by quarter 3 20 21 but this of course highly depends on how the situation evolves in the next coming months second point is goods versus services spending so when will this trend actually reverse that we had seen now in 2020 and we believe this is mainly driven by vaccination and there the estimates range from a critical mass that could be achieved in quarter three quarter four twenty twenty one because the summer season can help and um we believe it makes a lot of sense to also leverage that travel information as early indicators for example looking into travel searches travel bookings could give us once some of the lockdowns are lifted once some some of the the people are looking to travel again an indication that the good spending might actually decrease and people might use the money that they also saved up to spend on more services again the third factor to keep in mind is that the inventories are relatively low which means even if we see a trend reversal on the first two points it will would still take one or two months to actually fill up inventories back to pre-crisis levels so that we would then achieve a more balanced supply demand situation in global freight markets to sum it up the current thinking that we have is that um as of now ocean shipping supply demand balance could be restored as early as quarter two quarter three in this year taking all those factors into account and of course looking how the situation develops air cargo is a market where we believe that this will take longer time particularly still due to the ongoing supply shortage and road cargo could exhibit a similar situation a similar timeline than ocean shipping so this was a short excuses in our thinking on the more macro development i hope this is insightful and of course also happy to take questions thank you phillip excellent why why don't we then move on to questions on all aspects of of the webinar so far and gabriella and ankit maybe you can keep an eye on all the questions that have already come in and we will process one by one um sure so we have a question around the elasticity between the deal amount and the deal value so [Music] what limits the non-outperformers to adopt the same strategy as the three cycle outperformers uh i'm happy to to try answering that one and ankit please uh chip in here um i'm not 100 um kind of sure but how i interpret the question is and why and kind of have the non-out performers uh have gone down the route of rather few large-scale deals and not this programmatic smaller ideal deal strategy i i think what one reason is and was that in order to do a more programmatic string of purse approach you need to have a much more kind of planned procedure of knowing in which segments in which geographies and then diving deep into understanding the market also for mid-sized companies that are interesting while if you only reactively think about m a then you think about kind of big competitors failing or divesting and and and then jump on the opportunity but probably you have a bit more anxiety we're happy to share i mean based on our empirical research we believe that companies which pursue programmatic mnd as part of their strategy generally uh deliver better returns because of several reasons right one is uh they they get like more and more experience as they do like large number of teams and we they also kind of embed this mnda as a part of their holistic strategy which which helps them to understand what are the adjacencies they can target what are the motivation levels for mnd now talking about the question specifically uh what limits non outperformers to adopt the same strategy there could be several reasons to that one of the reasons could be just whether mnda is an active part of your strategy or not second reason could be uh or could also be the timing thing when any of these companies uh decided to pursue mla as a as a part of their strategy whether there are opportunities available in the market or not whether the timing is right or not how how how focusedly we are pursuing these opportunities and whether there are any opportunities available at that time okay thank you ankit and ludwig um we have another question so with the the digitalization in b2b and b2c um do you see a shift from ftl to ltl and what can be the impact for the outperformers yeah let me again start and maybe philip you can and at this time pitch in so in general and the digital effects are i have better visibility of supply and demand and through my data and forecasting and machine learning etc i can more accurately steer my supply chain as a shipper which means that i kind of probably can better make use of um less than container load in ocean trade less than truckload and in a road freight and offers whenever i know i'm not having enough loads to fill a full truck and therefore we have seen already in the last years a an outgrowth of both ltl to ftl and lcl to fcl and through digital we only see that continuing and then two more drivers will improve kind of the less than product category one is sustainability when i have to factor in carbon cost or cost to the environment then shipping half empty containers or trucks is even more costly and then consolidating less than shipments and then one more is if the rates in ocean and growth rates are so high as they are right now and again incentivized to optimize uh and consolidate wherever possible and that's also benefiting these networks so we see kind of a lot of um drivers why why these um shifts will happen and continue to happen and the impact to outperformers is probably they will benefit because our performers were the ones jumping earlier than others on these more specialized products and philip anything to add yeah i mean i fully agree um i think the the other point here is of course also that um the digital idealization that we see is also driving towards a stronger role of platforms that supply med supply match supply and demand and it also offers a unique opportunity to make the pricing better today some of the pricing for the less than container or less than truckload is is relatively complex and with a higher degree of digital and analytics usage also this pricing can be made much quicker and easier thereby allowing this mode to probably gain more importance thank you philip and ludwig so like we have a bit um length question about the impact and the response to the new platform uh freight platform like quick cargo uber fright convoy and sender so can you maybe add thoughts on that so our view in general on platforms is yes they improve efficiency of freight and logistics markets because they kind of optimize supply and demand and quickly bring that kind of unknown supply to unknown demand to the uh the fragmented supply and so it works very well on the trucking side it works less well whenever the supply side i.e the carriers are in a more consolidated state so in ocean freight where the top 10 container lines control the market there's much less platform play and to be expected than in road rate and obviously kind of linked to platforms there's also the phenomenon of very digital freight forwarders that are not only a matching platform matching supply and demand but actually four waters that take responsibility for the shipment and to end and but do that in a much more automated and digital way leveraging kind of the data transparency that's out there in the market therefore we do see a play for them we have also last year published our first report on startup funding and logistics which really confirms that a lot a lot of of yeah potential is seen there by investors but let's also not forget that and most logistics is network businesses and supply chains that have been optimized over years and so we don't only have spot business that might find a bit more efficient way through a digital platform we do have large contractual relationships that where logistics companies optimize their network for one or a couple of large customers we do think that that will stay and that will to a certain extent also protect the incumbents but and for sport business and for efficiency reasons also in your own distribution as a legacy company you should not miss the boat um and philip you know i know you have also done some research on digital channels and or the incumbents not sure if you want to add anything on that otherwise we can move to the next question okay i think we can move to the next one then um so we have a question on the mna strategy so um can we say that the active m a during the crisis is the consequence of the conservative capex policy during the crisis time happy to take that capital out the short answer is yes it could be however there could be some other motivations for this mandate strategy during the crisis period as well some of the other motivation could be like during the crisis the balance sheet of some of the players uh was in distressed position and m a was becoming like a natural theme at that time for those players and uh one of the other reason could also be the valuation level itself right there were opportunities available in the market at attractive valuation levels which at least some of the big players with strong balance sheet have leveraged during that period okay and then um there is one more uh also related to to the capex policy so like how singular is the conclusion so the graph comes across um as where uh outperformers would have a linear upwards trends over the time and the others jumped in 2007 so like um increased spend and then plateaued since then yeah let me take that briefly obviously yes that's how you can read the line and but what's behind the line from our point of view is the their non-outperformers being not fast and agile enough to cut back spending kept expanding in the 2008 and nine years of crisis which hurt them quite badly so they from a profitability and cash flow level have not recovered quickly after the crisis and didn't have money and cash to spend on capex unless uh two three years until two three years later when they have made some um operating cash flow again while the outperformers kind of uptight and protected some of their funds to spend them when uh it it would really matter and that's at least what what we have seen and then protected a continuous um capex spend which is also logical because after the financial crisis the economic development was quite linear growth and it will be interesting however to see how in two years time we look back at the capex spending throughout covet crisis and afterwards okay thank you ludwig and we also have a question about this forward forward forward-looking perspective so um will the warehousing and haps would become more important for the future lsps or that would be like if it's possible to focus on just on the transport and and collaboration with the local partners rather than uh the hubs and warehousing network i think we can keep that one quick it's there there's no one to true answer it depends on the customer vertical you serve we see right now even in the pharmaceutical logistics around vaccine delivery and storage that in the kind of very distinct verticals of pharma life sciences also of e-commerce and some others that are non-commodities so to say an integration of um and and and control of both storage and warehousing processes as well as transportation processes and being able to promise consistent service levels and across the entire supply chain is super important therefore in those verticals i wouldn't um follow this um logic of you can focus on transport only in more commodity type goods you probably can okay thanks um another one what might be the impact of climate change like becoming co2 neutral for example and circular on the out performers is investment in the new technology a challenge for financing the change and also we have another that is pretty much related also to the um carbon neutral and this specifically targeted into freight railroads so like how they can uh reflect uh this uh yeah focus on the carbon neutral and um while they are still very much dependent on the transporting of coal so i am happy to take the later one so traditionally i mean the way that investors look at any company they uh they view it they they value the future expected cash flows so for a business like a fright railroad which is engaged in transporting coal and if if investors believe that the expected growth will be on the lower side that will be kind of reflected in their valuation levels and one of the other things which have which institutional investors have started to give lot of emphasis on is whether the company is kind of uh creating value for all the ecosystem for entire ecosystem or not whether they have the social angle linked to their business levels or not so something at least which investors have started to to pay attention towards but again right from from a company standpoint important to identify which businesses are your core which businesses will give us enough growth to excel in future and convince investors about that yeah that's a super important point ankit so right now it might be the highest margin business but investors will look through that and say this is declining in volume and getting more challenged on margin given the public and political pressure and therefore kind of the net present value of this kind of right now still high earnings segment isn't that high and other segments that are growing and will have future a better future outlook and are much more um appreciated by investors therefore their push would be take the margins from what you get today and reinvest it into something that kind of can help you sustain um while in in a greener world okay thank you so like um this would you have any additional thoughts about like the general impact of the climate change like well like one thing we mentioned already which is be very efficient on uh packaging and not shipping around air in containers and therefore kind of more consolidation smaller kind of shipment sizes the yeah scale advantage of the biggest container ships or um trucks or or aircraft has actually already been exploited so there's not much in the near term on the basically more efficient asset side in the mid to long term obviously there's electrification hydrogen and alternative fuels that should be a very important part of any uh strategy for a logistics companies and that's actually true if you operate these assets or if you are an asset light company subcontracting them because the uh esg goals um will hit you for own and subcontracted um emissions and so that's kind of our perspective but we also need to be honest that logistics or physical flows across the world and that will continue to be there and they they cannot be decarbonized immediately it's a it's a long-term game that will require investments okay thanks a lot so like would we have still a bit of time for another question maybe one or two more questions and then okay so maybe last one um do you expect the autonomous platooning uh for tracking to be a game changer in eu or us game changer is a difficult word um and my current hypothesis would be no from all that we have heard and seen it can contribute to a 10 to 20 percent and emission reduction and fuel consumption reduction but the infrastructure needs the safety concerns the organizational complexity of realizing it and yeah renders it more a bridge technology for uh the heavy duty um trucks uh on on long-haul uh a road freight for the years until we have either battery electric or a hydrogen or alternative fuels and that would be my my current guess okay thanks thanks ludwig maybe one last question before we call it today yeah so like uh what would be the main still challenge related to the coveted vaccine logistics yeah that that's my uh pet topic i was involved uh on several fronts um trying to to find solution to this uh definitely one of the biggest logistical challenges in the past centuries and the good thing is we are getting used to cold chain at minus 70 degrees and through the right packaging dry eyes etc and that is kind of manageable the good thing also is the vaccine is a very dense cargo so within kind of a pellet of vaccines can serve almost a million people and or half a million people so that's really um helping as well and then i do believe that there is so much attention investment and um solution design going on right now with the largest and most professional logistics companies in the world that it's not going to be the logistics that fails it's not going to be any type of transport or storage it's rather the bottleneck in production and the vaccination process itself that might be a bottleneck but yeah it will be a core focus and a a huge role for the logistics industry as a whole and even though the volume might be small but the value and the importance and the urgency is high like little else okay i think with that that might be a nice word let's all hope that the vaccination runs smoothly that we will return to a kind of a bit more normalcy in soon and i hope we hear you all again in the next webinar on logistics