Specialist paper manufacturer Koehler Paper based in Oberkirch, Germany, produces 500,000 tons of speciality paper and board for the global market. Koehler covers the entire first leg of transportation, from plant to seaport, with the aid of container service provider ETK (Euro Terminal Kehl GmbH). In an interview with Insight, Klaus Krieg, Corporate Director Supply Chain Management, discusses sustainable delivery concepts, uncertainty regarding supply and shipping management due to more frequent periods of low water levels, and supply chain disruptions.
Insight: Koehler Paper and ETK can look back on 15 years of cooperation. What is the secret behind this successful partnership?
Klaus Krieg: As a family-owned company with a tradition stretching back 215 years, building long-term relationships with our suppliers and partners is important to us. This is the only way in which two parties can foster a relationship of trust with each other and a spirit of partnership in all their dealings with one another – in good and in bad times.
Our aim in working together with ETK was to adopt a holistic approach in achieving optimal workflows in logistics at Koehler. By joining forces, we have professionalised processes on an ongoing basis and adjusted them to the current conditions and the respective requirements.
What part of its logistics does Koehler Paper cover with ETK?
ETK has taken on the entire initial leg, from our plants right through to the relevant seaports. The process starts with the delivery of the empty containers, for instance to our Kehl location, proceeds to providing trucks, and goes right through to transporting the containers to the seaports.
What role do rail and barge play in mapping transport networks on the Rhine for the export business?
The possibility of splitting between the two modes of transportation is vital for Koehler. The year 2022 in particular has once again highlighted the appropriateness of this strategic approach which allows us to respond flexibly to possible blips in the transport chain. In phases of low water levels on the Rhine, for instance, we respond by transporting higher volumes via rail. In this context, we benefit from the very good connections and systems which HSL makes available to us through the railway companies. We can therefore always rest assured that sufficient rail and barge transport capacities will be available.
What is the modal split ratio?
At the moment, 60 percent is dispatched via rail and 40 percent via barge. The initial delivery of empty containers is largely done on barges.
What’s the standard procedure for export shipments?
The transport order for shipping the goods in containers is sent from Koehler Paper’s logistics to forwarding agents such as FMS, K+N or Schenker. These agents book the containers in at the shipping lines and use ETK for processing the preliminary transport. After an order has been placed by Koehler’s logistics and following release of the empty containers, the goods are loaded in the plants or in the various neighbouring external warehouses. ETK plans the right transport mode for the first leg, taking account of the data provided, such as ETS, closing, cargo opening etc. The containers are subsequently transported via rail or barge to the seaports and loaded there onto the reserved seagoing vessel.
Please give us an idea of the export volume we are talking about here and how this set to evolve.
Koehler Paper dispatches around 200,000 tons of paper a year throughout the world from its locations in Kehl and Oberkirch. This volume corresponds to around 9,000 containers or 17,000 TEUs.
Through ramping up our latest paper machine 8 in Kehl, which went online in 2020 and will reach 100 percent output for the first time in 2023, we are looking to raise our export volume to 220,000 tons a year. This new production line 8 is the only one of its kind in the world and offers state-of-the-art coating technologies, allowing barrier paper for flexible packaging to be produced. This paper can replace plastic, in packaging food, for instance.
Koehler Paper has been a loyal customer of the ETK intermodal connection between Strasbourg/Kehl and Rotterdam since the start of the Alsace Rotterdam Express in 2015.
Koehler Paper has been a loyal customer of the ETK intermodal connection between Strasbourg/Kehl and Rotterdam since the start of the Alsace Rotterdam Express in 2015. What is compelling about this concept?
The connection and the concept have integrated over the years and have proven their value. The product’s reliability and the flexibility in particular play an important role for us. Rail bookings throughout the year give us the option of raising the volumes transported by rail on a flexible basis in response to the recurring situation of low water levels on the Rhine. Alsace Rotterdam Express’ regular offering is also used by our customers. It enables us to reliably reach the seagoing vessel on time , and we can give our customers reliable information on delivery dates.
The empty container depot is also located in Kehl. How useful is this when organising operations?
Having a direct supply of empty containers from our depot in Kehl is hugely significant for Koehler’s logistics. Loading is organised as a shuttle service, so proximity to the depot is a big advantage. Similarly, Koehler benefits from the great flexibility derived from being close to the depot. ETK arranges for empty containers to be sufficiently available in time to ensure that loading can take place smoothly after production.
In comparison, the volumes loaded via the Rhine are down. Why is transport by barge losing its appeal?
The ever more extreme and frequent phases of low water levels on the Rhine mean that supplies to and shipping from our plants are no longer guaranteed. From the standpoint of emissions, we are talking primarily about CO2 here, we nevertheless want to transport at least 40 percent of our freight volumes via barge. In this context, we are hoping that, in cooperation with HSL, we can expand transportation on the Rhine with barges that have been specially adapted.
How do you approach developing your logistics supply chain with regard to sustainability?
Over the period up until 2030, the Koehler Group has set itself the goal of having its own plants producing more renewable energy than is necessary for its own paper production. The effect on business partners such as suppliers and service providers also plays an important role in terms of sustainability. As from 2023, we aim to start benchmarking our service providers against Scope 3 emissions. From 2024 onwards, we will also be incorporating these factors in our decisions on awarding contracts.
To what extent is your export business impacted by the disruptions to global supply chains and how have you adapted your strategy to deal with this challenge?
Our long-standing partnerships with our service providers and shipping lines have so far enabled us to get through the crisis of global supply chain disruptions relatively well. One challenge was, and partly still is, the availability of empty containers. Only by coordinating very closely with our partners have we been able to master this challenge to date.
As far as the commodities situation is concerned, we pursue a foresighted stock level policy. In the current crisis, we have been able to reduce our risk by keeping sufficient stock and have therefore been able to ensure availability for our customers going forward.
The image in the background shows Insight the fully automated high-bay warehouse of speciality paper manufacturer Koehler Paper based in Oberkirch, Germany.
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The Koehler Group, which also comprises Koehler Paper, was established in 1807 and has been a family-run company since its founding. The Group’s core business focuses on developing and producing high quality special paper. The range of products includes thermal paper, playing card board, mats for the beverage industry, speciality paper, carbonless paper, recycling paper, decor paper, pulp board, sublimation paper, as well as, since 2019, innovative speciality paper for the packaging industry. The Koehler Group maintains five production sites in Germany and another three in the US with a workforce of around 2,500 employees. The Group operates internationally, with an export rate of 70 percent in 2021 and annual revenues of around one billion euros.
Image source: Koehler Paper