German-headquartered logistics provider Dachser posted 5.5 percent growth in 2018 on record shipment and tonnage figures, driven primarily by its European export business.
The company reported increased consolidated net revenue of EUR 5.57 billion (USD 6.58 bn), with shipment numbers lifted 2.5 percent to 83.7 million and tonnage up 3 percent to 41.3 million metric tons.
While the global logistics provider’s growth was boosted by economic conditions, it said certain challenges became increasingly apparent: the shortage of professional drivers and logistics operatives; potential capacity bottlenecks resulting from pronounced seasonal peaks and a shortage of load capacity; and growing uncertainty about diesel driving bans, Brexit, and the future of international trade relationships.
“By 2018, it was clear that logistics had to focus on the discipline of scarce resources management,” explained Bernhard Simon, CEO Dachser SE. “Against this backdrop, it is important to handle growth with purpose and manage it such that we maintain a healthy balance between quality, processes, and costs. Only sustainable growth will benefit our employees and customers.”
Dachser’s Road Logistics business field—which comprises the transport and storage of industrial goods (European Logistics) and food (Food Logistics)— increased its consolidated net revenue by 6.6 percent to EUR 4.47 billion.
The European Logistics (EL) business line posted the strongest growth with net revenue up 7.0 percent to EUR 3.55 billion. Shipments and tonnage each increased by 3.1 percent.
“All four regional business units helped substantially strengthen the network. The network effects in the export business ensure that the EL business units continue to grow and mutually drive each other’s growth,” Simon said.
Dachser’s Food Logistics business line also posted robust revenue figures for 2018. Consolidated net revenue increased by 5.3 percent to EUR 917 million. The virtually unchanged number of shipments compared to the previous year was offset by tonnage growth of 2.0 percent.
“We continue to pursue our quality strategy, and it is paying off. Dachser Food Logistics has seen positive development for many years now and is generating growth with national transports and contract logistics. We have also seen encouraging growth rates in cross-border transports,” Simon said. “On the downside, the shortage of freight space and drivers plus seasonal fluctuations in volume are hitting this segment hard.”
The Air & Sea Logistics business field again proved to be volatile. As a result of exchange-rate effects, decreasing freight rates, and a downturn in volume on the China-Europe route, consolidated net revenue stagnated at around EUR 1.19 billion. A 2.9 percent decrease in the number of shipments was offset by tonnage growth—most notably in sea freight—of 6.6 percent.
“By 2020, we aim to replace all isolated solutions with our Othello transport management system, which we developed in-house. In 2018, we completed the rollout of the system in China to mark a major milestone in this project,” Simon explained. “The key to sustainable growth in air and sea freight lies in mastering and managing complex interfaces and the deep integration of our logistics systems. As we have seen with European overland transport, our investments in integration and standardization will pay off here, too.”
In 2018, the company invested EUR 126 million in logistics facilities, IT systems, and technical equipment. For 2019, the company has earmarked EUR 234 million for this purpose. Dachser also places a strong focus on training, an approach that has proved very successful, particularly for professional drivers.
“At present, we have 207 people training to become professional drivers through Dachser Service & Ausbildungs GmbH, which makes us one of the largest driver training centers in Germany. Our next step is to broaden our focus to include logistics operatives in transit terminals and warehouses,” Simon said.
DACHSER SE’s subsidiary, DACHSER USA Air & Sea Logistics Inc.’s revenue increased by 11.9 percent to $221 million in 2018.
“We had a strong fourth quarter as a result of companies planning their shipments ahead of the scheduled Q1 2019 tariffs,” said Guido Gries, Managing Director, Dachser Americas. “Also the opening of the Detroit office in 2018 as well as the addition of offices in Minneapolis and Baltimore the years prior contributed to this growth.”
Long term, Dachser USA will look to maintain and grow its local network, which is critical to the continued growth of the business. According to Gries, “All key markets globally are well represented in our network, which is a strength that is needed to support growth. The more our entire network grows, the more value it presents to our customers. We plan to grow our network in the Americas region by 12-14% this year.”
Along with growing the network, Dachser will continue to invest in new state-of-the-art technology as it finalizes the global roll-out of its transportation management system, which provides its customers with one-stop-shop connectivity and visibility of their entire supply chain. Providing end-to-end visibility is a key element in Dachser’s enhanced customer service strategy. Additionally, Dachser will focus on providing dedicated customer service teams to address the complicated automotive and pharmaceutical sectors, each of which require a sophisticated knowledge of the industry. This program was successfully launched in Mexico and will be expanded into the U.S. in 2019 as part of the overall growth strategy.
