Cargotec’s equity story from a summer trainee’s point of view
Several megatrends support Cargotec's businesses and long term growth potential. How are these trends supporting Cargotec's equity story present in a summer trainee's daily work?
During the past few months, I have worked as a trainee in Cargotec’s investor relations team. I was quick to find out that Cargotec’s growth potential is supported by several megatrends and that sustainability is at the core of the company’s strategy. These are both very important factors for myself as an investor and employee. Thus, as the end of my trainee period is approaching, I wanted to share my thoughts on how these trends supporting Cargotec’s equity story have been present in my everyday work.
Digitalisation, electrification and automation promoting sustainability
The beginning of May was an exciting time to start working at Cargotec, since the company's strategy had just been refined with sustainability and profitable growth as breakthrough objectives. Sustainability presents a great business opportunity for Cargotec, since different sustainability-related issues are challenges that also our customers have to solve. For instance, it has been impressive to see that Cargotec can monitor its connected equipment – well over 10,000 machines – and help its customers to optimise the usage of their fleet. The utilisation of connectivity and data provides customers considerable fuel savings and cuts emissions, just to name a few benefits.
Also in May, a year had passed of Cargotec’s commitment to UN business ambition for 1.5°C to mitigate climate change. Cargotec has set ambitious greenhouse gas emission reduction targets to address the impacts of its entire value chain. One way to reach these targets is to sell eco-efficient solutions to our customers, since we have the greatest contribution towards mitigating climate change with our offering. For instance, Kalmar’s terminal tractor, and by the end of 2021 Kalmar’s full offering, will be available as electrically powered versions. Cargotec reports the eco portfolio sales in the key figures in interim reports.
I got first hand experience of some of Cargotec’s eco portfolio solutions during a visit to Tampere, where Kalmar’s Technology and Competence Centre is located. One of the highlights of the trip was visiting the control room of the industry's largest port automation test field and getting the chance to control the equipment myself. This truly concretised Cargotec’s position not only as a leader in cargo handling equipment, but as a technology leader in its field as well.
As I saw in Tampere, automated terminals improve efficiency, reduce energy consumption and emissions and lead to a safer working environment, which is an essential aspect of sustainability at Cargotec. The importance of safety at the workplace has only increased during the pandemic, so it’s great to see how Cargotec’s automation solutions have helped with this aspect of sustainability as well.
The control room of the industry's largest port automation test field in Tampere
Global growth & economic development
The trends in the overall economy are reflected in Cargotec’s share and therefore are present in our everyday work at investor relations. One of the main megatrends supporting Cargotec’s growth is global economic development, which drives world trade and demand for cargo transportation.
The global container throughput (number of containers handled in ports) is expected to keep growing during the upcoming years, which emphasises the importance of efficiency in ports. While the demand for cargo transportation is growing, the pandemic, trade wars, and for example the accident at the Suez Canal have interrupted the cargo flow, so it appears even more important that ports function efficiently. This supports Cargotec’s growth as currently only 40 terminals out of 1,200 in the world are automated.
Market recovery after the turbulent beginning of the Covid-19 pandemic has been strong in Cargotec’s main market areas. As a result of this, Cargotec’s orders received reached an all-time record in the second quarter of 2021. While trends driving economic growth, such as increased consumption and population growth, create challenges for sustainable development, it has been comforting to see how Cargotec’s products and technologies enable greenhouse gas emission reduction in the cargo flow.
As my summer at Cargotec is coming to an end, it has been nice to reflect back on the past few months. My first impression of Cargotec being a company that just makes cargo handling equipment has evolved into Cargotec being a true technology leader with sustainability at the very core of the business. To wrap this all up, I feel very optimistic about Cargotec’s potential to enable a low-carbon economy by helping to reduce the carbon footprint of the logistics industry as a global leader in sustainable cargo flow.
Author: Julia Klemola, Communications and Investor Relations Trainee