TNT is working with the United Nations World Food Programme to tackle the rising challenge of world hunger
TNT is working with the United Nations World Food Programme to tackle the rising challenge of world hunger
Dutch delivery company TNT’s partnership with the World Food Programme to tackle world hunger is facing an uphill struggle.
Josette Sheeran, WFP executive director, describes food shortages and spiralling prices of staples including rice as a “silent tsunami” that threatens to leave 100 million people without enough food. Governments including those of Brazil and China have already begun to restrict rice exports to ensure supplies for their own hungry populations.
Since 2002, TNT, one of the Netherlands’ largest companies, has provided logistic expertise – through training and advice – to WFP, the world’s largest humanitarian organisation, which feeds, on average, 100 million people a year. TNT invested about €7.7 million in the partnership last year.
According to Wouter Scheepens, partner at Triple Value Strategy Consulting, a consultancy based in The Hague, Dutch transport businesses operate on tight margins, and few companies have consistently offered sustainability projects.
TNT is one of the few Dutch transport companies to use its core competencies to help an organisation such as WFP, Scheepens says. “TNT is a great example of double or even triple wins for TNT, WFP and the beneficiaries,” he says.
Laura Melo, a WFP official working on fundraising, says the partnership goes much deeper than philanthropy. WFP has benefited from TNT’s logistics and transport knowledge and its ability to raise funds and awareness for WFP, especially in the Netherlands, she says, noting TNT also helped to attract other private sector sponsors.
TNT, which recorded revenues of €11 billion in 2007, says the partnership with the logistics arm of the UN motivates its 161,500 employees and boosts its external image. A company survey showed 62 per cent of employees worldwide voluntarily participated in the Moving the World project last year.
Top-level support
Peter Bakker has been TNT chief executive since November 2001. Although some executives felt they could get more bang for their buck by straightforward financial investments, Bakker converted his board members by taking them to Africa to witness WFP’s refugee camps. He convinced senior executives that the partnership was good for TNT’s business and good for society.
Ludo Oelrich, TNT’s director of the partnership with WFP, says that the Asian tsunami in 2004 was its biggest test. TNT chartered helicopters, provided warehouses and mobilised hundreds of employees to help WFP in areas such as Indonesia’s devastated Banda Aceh. Oelrich estimates that $3 million of in-kind support helped thousands of stranded refugees.
TNT also participates in an average of six emergency relief operations a year, such as providing aid for flood victims in Mozambique as well as the know-how to revamp the supply chains for school feeding projects in Liberia.
The sale of TNT Logistics to Apollo Management, a US private equity firm, for about $1.9 billion in August 2006 could have shifted the focus of the partnership. However, Oelrich says, 90 per cent of the staff in the partnership worked for its postal and express mail delivery divisions, with only 10 per cent from the logistics division. WFP’s Melo agrees that with TNT in-house transport expertise the partnership continued without a hitch.
Nonetheless, TNT also witnessed failures. For instance, it was unable to introduce key performance indicators across WFP’s giant operation and different cultures.
The partnership also draws criticism from some non-governmental organisations. Although Oxfam lobbyist Sander van Bennekom admits that TNT delivers benefits to WFP, he is critical of TNT and other multinationals for using only a tiny part of their revenues.
Van Bennekom says TNT’s support of the Global Compact, the UN’s corporate citizenship initiative, allows it to side-step regulations. “If companies such as TNT really promote best practices [in sustainability], they shouldn’t be worried about tougher regulations,” van Bennekom says.
Still, TNT employees remain enthusiastic. In last year’s WFP and TNT sponsored walk, 550,000 participants in 93 countries raised almost €1 million, while employees from postmen to truck drivers work on school feeding projects in remote Cambodian, Nicaraguan or African villages.
As food riots break out across the world from Argentina to Yemen, TNT is aware that the issue of food security has never been more serious. Oelrich says TNT is setting up a disaster response team to provide expertise in warehousing, transport, airports and communications.
TNT is also working with other logistics companies to establish “logistics emergency teams”. “There’s a lot of work to do and we provide an extra pair of hands to the WFP,” Oelrich says.
UN World Food Programme by numbers in 2006
Food distributed to 87.8 million of the poorest people in the world, including 58.8 children.
· 24.3 million people in development programmes.
· 63.4 million beneficiaries in emergency and protracted relief and recovery operations.
Operations in 78 countries around the world.
· 90 relief operations.
· 22 development projects and 34 country programmes in 48 countries.
Total food distributed: four million tonnes.
Direct expenditure: $2.9 billion.
Total number of employees: 10,587.