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Dachser and the dash for air

It’s not all about the trucks. Martin Roebuck profiles a forwarder with an increasingly global presence and big ambitions in air freight

D achser trucks are a familiar sight on Europe’s motorways and ferry ports, each carrying food, chemicals or consumer goods. Now, however, the company is a growing player in the global air and sea freight markets too.


Air & Sea Logistics is a little less than half the size of the Road Logistics division, with revenues of €1.58 billion in 2014, compared with €3.86 billion from the road. It is growing faster, however, recording 8% growth compared with the Road Division’s 5%. Dachser saw an overall increase of 5.2% in consolidated revenue, up to €5.3 billion for the year, nicely in line with 5.1% volume growth.


Unveiling the company’s annual results in April, chief executive officer Bernhard Simon pointed to a “positive trend in sea freight” as the decisive factor in last year’s success.


Thomas Reuter, who heads up Air & Sea Logistics, clarifies that the surge in sea freight revenue was due in part to Dachser’s acquisition of Spanish forwarder, Transunion, in 2013.


“It is a strategic objective to establish a balanced ratio between sea and air freight,” Reuter says.


Indeed, the company is close to achieving that balance, with air freight accounting for 45%, or around €710 million, of Air & Sea revenues last year.


“We have significantly expanded our own air and sea freight network over the past few years and have grown together with our customers in these markets. Dachser Air & Sea has its own branches in 38 countries, and we have agents present in almost all countries of the world,” Reuter says.


“We will be aiming at organic growth, but will further reinforce our operations by targeting growth markets with acquisitions, whenever this seems a good idea.”


In particular, the US continues as “a focal point in our development,” Reuter says. “A lot of multinational target customers are located there, but we’re building our US business by focusing on the needs of small and medium-sized shippers. As such, we have added contract logistics to our armoury. We’re strongest on the US East Coast, but are expanding in the Midwest and in locations such as Phoenix, San Francisco and Seattle. Dachser has a target of 20 to 25 US offices in its 2018 plan.”


The value of networking

Dachser generally runs joint air and sea freight offices, but has some dedicated teams located at strategically important air freight hubs.


The group strives to maintain a close link between its freight and contract logistics businesses. “We probably have the most powerful group transport network in Europe. On top of this, we have completely integrated warehouses for individual customer contract logistics services in Europe, the US and Asia. Our forwarding and contract logistics business is also very tightly networked in terms of IT,” Reuter says.


Which industry verticals are generating the fastest growth for Dachser in air freight terms, and which are less buoyant? “Life sciences is skyrocketing, and as such we have targeted expansion of the life science air freight market. It is of crucial importance to us,” Reuter says. “However, the electronics industry is shifting its focus more and more to sea freight as a result of mounting price pressure.


“The trend in that sector continues downwards, except for high-priced electronics products and large-scale market launches. ‘Lifestyle’ products, such as the iPhone, still have to be quickly brought to all markets to allow globally coordinated retail presentation.”


More shippers have migrated to sea freight at the expense of air in recent years, both through better advance planning and adjustment of production schedules, as well as in response to the growth of sea-air transport.


The current low oil price could reverse this trend back in air transport’s favour for some cargo categories, though high-tech and fashion goods are less vulnerable to modal switch, Reuter says. Sea freight is continuing to increase its share of raw materials and chemicals movements, for example. “One thing isn’t changing: air freight remains the only alternative when there are bottlenecks in production or distribution.”


Yet despite the sluggish volumes that carriers continue to report on many trade lanes, it is “by no means a buyer’s market,” he insists. “Air freight markets are always in flux and changes in underlying political or economic conditions can impact directly on tonnage. However, the prices in air freight continue to be dictated by carriers.” >>

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