Executive Briefings

Untying Logistical Knots in the Emergency Aid Supply Chain

In an arrangement with the U.N.'s World Food Programme, TNT brings private-sector expertise to the job of supplying stricken areas with relief.

Like any supply chain, this one involves getting goods to destination on time and as efficiently as possible. But in the arrangement between TNT N.V. and the United Nations World Food Programme, the stakes are much higher than usual. Put simply, it's a matter of life or death.

Real expertise in supply chain management comes from the private sector. That was the thought of TNT chief executive officer Peter Bakker, who was propelled into action after reading an article about world hunger. According to the piece, a child dies from hunger every few seconds. Bakker thought his company could do something to alleviate the problem. It seemed like a more useful activity than sponsoring soccer matches.

TNT approached the World Food Programme (WFP) four years ago, offering its skills in getting food to people in times of emergency. "We felt it was our responsibility as a global organization to do something for the community in which we operate," says Ludo Oelrich, TNT's program director of the partnership with WFP. "We could make use of our core strength in express mail and logistics."

The two organizations quickly determined that they had shared goals, says David Morton, WFP's director for transport and procurement. Nevertheless, it took a while for them to figure out exactly how they might work together. Extensive planning and preparation were required. "It was a learning process right at the beginning," Morton says.

The partnership was officially launched in December 2002. Today, TNT supports WFP in three distinct ways. It helps with disaster response efforts, such as those following the Indonesia tsunami in December 2004, and the Pakistan-India earthquake in October 2005. It offers assistance in building logistics capacity and related technology, including fleet-management expertise. And it raises awareness of world hunger, through such events as an annual fund-raising walk by TNT employees from around the globe.

The first two areas call directly on TNT's supply chain expertise. The company's role includes expediting food shipments within the first few days of an emergency. WFP already has well-established emergency procedures to address such crises as natural disasters, both sudden and slowly developing; conflicts between countries, and refugee situations. TNT provides direct logistical support for emergency operations, experts to manage related business processes, and training of airfreight staff. And while WFP charters most of its own aircraft, TNT can help the organization to minimize its reliance on commercial charters.

The Tsunami Hits
The job might involve airlifting high-energy biscuits to stricken areas within hours of the disaster. When the tsunami hit the shores of Indonesia (affecting five other countries as well), TNT staff helped out with driving trucks, delivering food, expediting local airport operations and staffing a "control room" for the overall effort, Oelrich says.

As with any supply chain, the task required a substantial amount of groundwork. TNT provided WFP with a service catalog, listing the contact numbers of people at both ends of the chain, and procedures for calling up resources.

David Stenberg, country operations manager for the Express Division of TNT in Indonesia, was on the scene when the tsunami hit. He was the first point of contact for WFP in Indonesia in organizing air and over-the-road assistance. The first day, he says, was largely devoted to fact-finding, as officials surveyed affected areas and determined where supplies were needed.

Soon after, people and equipment were moving into the region. Working out of its local office in Medan on the eastern side of the island of Sumatra, TNT arranged for third-party trucking to the devastated area of Bandar Aceh. One hundred trucks were moving on the road, normally a six- to eight-hour drive, each day, Stenberg says. Some of the vehicles took up to 24 hours to reach destination, hampered by security restrictions and road damage.

TNT helped WFP secure everything from a forklift to helicopters. Meanwhile, WFP, which doesn't keep big stockpiles of food in anticipation of emergencies, was scrambling to amass enough aid. It diverted an ocean shipment from Japan of 12,000 tons of rice, bound for Bangladesh, to Indonesia. (Later, says Morton, the organization discovered that it could buy rice in Indonesia. Such are the lessons of a supply chain geared to unpredictable events.)

TNT also provides assistance of a more long-term nature. It offers customs expertise to the Joint Logistics Center, a project hosted by WFP on behalf of multiple United Nations agencies. Based in a small office in Rome, the JLC can deploy logistics experts on the spot within 24 to 48 hours, says Morton. It also helps to prioritize aid and avoid conflicts between the parties that supply it, including military peacekeeping forces and various commercial entities. TNT helps out by creating guidelines and databases for clearing customs expeditiously.

Joint Logistics Effort
TNT's capacity-building program is part of an initiative with WFP known as the Joint Logistics Supply Chain. The company's role is to advise on how the relief organization can make its supply chain more efficient. TNT draws on expertise derived from managing its own equipment fleet, as well as supplying the underlying information system. According to Oelrich, TNT can create simulation models that anticipate logistical problems. In the Sudan, for example, WFP mapped out all infrastructure, including bridges and roads suitable for heavy vehicles. It determined the cost of needed repairs as well as their impact on transportation expense. With that information in hand, WFP could make the choice between airlift and road transport.

On a higher level, TNT regularly examines WFP's global infrastructure and makes recommendations on the siting and management of storage locations. Recent projects include the selection of a new warehouse-management system and changes to the organization's method of fleet management. Improvements to the U.N.'s Humanitarian Rapid Response Base in Italy, managed by WFP, resulted in savings of around $481,000 a year.

In the three years of the partnership with WFP, TNT has also helped with emergency efforts in Sri Lanka and Africa. In 2004, the company committed $10.2m to the program, launching 27 projects and support activities in 60 countries. For 2005, TNT upped its commitment to $12m.

TNT's greatest contribution might lie in helping WFP to adapt to the unexpected - an aspect of all global supply chains, public or private. And, with each event, the company has a better sense of how to respond at the point of crisis.

"There's a learning curve involved," says Stenberg. "If there's another [emergency], we know what we need. We'll not wait and be given instructions."

Like any supply chain, this one involves getting goods to destination on time and as efficiently as possible. But in the arrangement between TNT N.V. and the United Nations World Food Programme, the stakes are much higher than usual. Put simply, it's a matter of life or death.

Real expertise in supply chain management comes from the private sector. That was the thought of TNT chief executive officer Peter Bakker, who was propelled into action after reading an article about world hunger. According to the piece, a child dies from hunger every few seconds. Bakker thought his company could do something to alleviate the problem. It seemed like a more useful activity than sponsoring soccer matches.

TNT approached the World Food Programme (WFP) four years ago, offering its skills in getting food to people in times of emergency. "We felt it was our responsibility as a global organization to do something for the community in which we operate," says Ludo Oelrich, TNT's program director of the partnership with WFP. "We could make use of our core strength in express mail and logistics."

The two organizations quickly determined that they had shared goals, says David Morton, WFP's director for transport and procurement. Nevertheless, it took a while for them to figure out exactly how they might work together. Extensive planning and preparation were required. "It was a learning process right at the beginning," Morton says.

The partnership was officially launched in December 2002. Today, TNT supports WFP in three distinct ways. It helps with disaster response efforts, such as those following the Indonesia tsunami in December 2004, and the Pakistan-India earthquake in October 2005. It offers assistance in building logistics capacity and related technology, including fleet-management expertise. And it raises awareness of world hunger, through such events as an annual fund-raising walk by TNT employees from around the globe.

The first two areas call directly on TNT's supply chain expertise. The company's role includes expediting food shipments within the first few days of an emergency. WFP already has well-established emergency procedures to address such crises as natural disasters, both sudden and slowly developing; conflicts between countries, and refugee situations. TNT provides direct logistical support for emergency operations, experts to manage related business processes, and training of airfreight staff. And while WFP charters most of its own aircraft, TNT can help the organization to minimize its reliance on commercial charters.

The Tsunami Hits
The job might involve airlifting high-energy biscuits to stricken areas within hours of the disaster. When the tsunami hit the shores of Indonesia (affecting five other countries as well), TNT staff helped out with driving trucks, delivering food, expediting local airport operations and staffing a "control room" for the overall effort, Oelrich says.

As with any supply chain, the task required a substantial amount of groundwork. TNT provided WFP with a service catalog, listing the contact numbers of people at both ends of the chain, and procedures for calling up resources.

David Stenberg, country operations manager for the Express Division of TNT in Indonesia, was on the scene when the tsunami hit. He was the first point of contact for WFP in Indonesia in organizing air and over-the-road assistance. The first day, he says, was largely devoted to fact-finding, as officials surveyed affected areas and determined where supplies were needed.

Soon after, people and equipment were moving into the region. Working out of its local office in Medan on the eastern side of the island of Sumatra, TNT arranged for third-party trucking to the devastated area of Bandar Aceh. One hundred trucks were moving on the road, normally a six- to eight-hour drive, each day, Stenberg says. Some of the vehicles took up to 24 hours to reach destination, hampered by security restrictions and road damage.

TNT helped WFP secure everything from a forklift to helicopters. Meanwhile, WFP, which doesn't keep big stockpiles of food in anticipation of emergencies, was scrambling to amass enough aid. It diverted an ocean shipment from Japan of 12,000 tons of rice, bound for Bangladesh, to Indonesia. (Later, says Morton, the organization discovered that it could buy rice in Indonesia. Such are the lessons of a supply chain geared to unpredictable events.)

TNT also provides assistance of a more long-term nature. It offers customs expertise to the Joint Logistics Center, a project hosted by WFP on behalf of multiple United Nations agencies. Based in a small office in Rome, the JLC can deploy logistics experts on the spot within 24 to 48 hours, says Morton. It also helps to prioritize aid and avoid conflicts between the parties that supply it, including military peacekeeping forces and various commercial entities. TNT helps out by creating guidelines and databases for clearing customs expeditiously.

Joint Logistics Effort
TNT's capacity-building program is part of an initiative with WFP known as the Joint Logistics Supply Chain. The company's role is to advise on how the relief organization can make its supply chain more efficient. TNT draws on expertise derived from managing its own equipment fleet, as well as supplying the underlying information system. According to Oelrich, TNT can create simulation models that anticipate logistical problems. In the Sudan, for example, WFP mapped out all infrastructure, including bridges and roads suitable for heavy vehicles. It determined the cost of needed repairs as well as their impact on transportation expense. With that information in hand, WFP could make the choice between airlift and road transport.

On a higher level, TNT regularly examines WFP's global infrastructure and makes recommendations on the siting and management of storage locations. Recent projects include the selection of a new warehouse-management system and changes to the organization's method of fleet management. Improvements to the U.N.'s Humanitarian Rapid Response Base in Italy, managed by WFP, resulted in savings of around $481,000 a year.

In the three years of the partnership with WFP, TNT has also helped with emergency efforts in Sri Lanka and Africa. In 2004, the company committed $10.2m to the program, launching 27 projects and support activities in 60 countries. For 2005, TNT upped its commitment to $12m.

TNT's greatest contribution might lie in helping WFP to adapt to the unexpected - an aspect of all global supply chains, public or private. And, with each event, the company has a better sense of how to respond at the point of crisis.

"There's a learning curve involved," says Stenberg. "If there's another [emergency], we know what we need. We'll not wait and be given instructions."