Dachser builds on its growth driver
Revenue up by a solid 1.6 percent in 2019; European overland transport grows 2.9 percent; EUR 151 million invested in logistics facilities and IT systems
Even as the global economy becomes increasingly weaker, Dachser was able to continue growing in 2019. The logistics provider increased its consolidated net revenue by a solid 1.6 percent to EUR 5.66 billion. Driving this growth was again the Road Logistics business field, net revenue rose by 2.9 percent to EUR 4.60 billion. In contrast, the Air & Sea Logistics business field saw a decline of 4.1 percent, mainly attributable to weaker demand for air freight services for automotive customers.
The revenue growth at the Group level contrasts with declining shipment and tonnage figures. Although the number of shipments was down by around 3.7 percent from 83.7 to 80.6 million, tonnage fell only slightly compared to the previous year, slipping by 1.0 percent from 41.4 to 41.0 million metric tons.
When the economic wind turns, quality and reliability count more than ever. That’s why we’re all the more committed to ensuring our employees are well-qualified and motivated and why we’re continuously investing in our network, our processes, and our IT.Bernhard Simon, CEO of Dachser
Business development in detail
Dachser’s Road Logistics business field—which comprises the transport and storage of industrial goods (European Logistics) and food (Food Logistics)—continued to provide stability while driving growth at the company. In 2019, Road Logistics increased its consolidated net revenue by 2.9 percent from EUR 4.47 to 4.60 billion. The Business Line European Logistics contributed 3.63 billion Euro (+2.4 percent) to the Road Logistics revenue. “Cross-border services remained strong and contract logistics saw positive development throughout Europe. Although the situation on the freight market relaxed in the course of 2019, the shortage of drivers and lack of qualified personnel in Germany and many other European countries continues to be our most pressing challenge,” Simon explains.
Dachser’s Food Logistics business line achieved the strongest growth in 2019, recording revenue growth of 5.1 percent from EUR 917 to 964 million. The number of shipments handled declined by 1.7 percent and tonnage saw a slight rise of 0.6 percent. “Food Logistics has been a reliable pillar of our business model for years,” Simon says. “The alliances with our partners in the European Food Network have proven to be extremely stable and fruitful.”
In the Air & Sea Logistics business field, revenue declined by 4.1 percent in 2019, from EUR 1.19 to 1.14 billion; the number of shipments was down by 5.6 percent. “In Air and Sea Logistics, we’re feeling the effects of the business climate, which is very volatile and greatly impacted by the disruptions to world trade,” Simon says. “In our air freight business, the effects of the weak demand for transport services from the German automotive industry are particularly evident.” In 2019, Dachser took steps to future-proof this business field. These included adding the life sciences/pharmaceutical and fashion & sports sectors to its customer portfolio and expanding rail services along the New Silk Road. Air and sea transports, particularly for LCL, were connected more tightly with the European overland transport network. In addition, the rollout of Dachser’s Othello transport management system, developed in-house, is now essentially complete. “By mid-2020, we will use our own transport management system to handle 99 percent of all shipments. The resultant improvements in efficiency and productivity allow us to add further value for our customers,” Simon says.
In the coronavirus crisis – An anchor of stability in difficult times
To further improve the quality of its services, last year the family-owned company invested EUR 151 million in the construction or expansion of transit terminals and warehouses and in IT systems and technical equipment. Investments of a similar amount are planned for the current year, too. However, due to the coronavirus outbreak, Dachser, like many companies, will have to readjust its targets. Simon explains: “The final impact on our business is difficult to predict; all we can do is reassess the situation daily and respond accordingly, taking an agile and flexible approach. In view of the current restrictions on business activities, we can’t avoid a downturn in volume in our industrial goods business, especially in Spain and France. However, in terms of our service portfolio and customer structure, we deliberately adopt a very broad position so that we can adapt well to new scenarios. As a logistics provider, we are a key link in the basic supply chain for the food sector, and we expect this business to remain relatively stable.”
Dachser further increased its equity ratio in 2019 to over 57 percent. With its current workforce of some 31,000, Dachser has more employees than at any other point in its history. “We’re very proud of this because our employees are the heart and backbone of the service we provide. Securing jobs is our top priority in 2020,” Simon says. “We also want to remain a stable and reliable partner for customers and subcontractors. Together, we’ll overcome the crisis surrounding the coronavirus with fair prices and fair remuneration, and lay the foundations for future growth.”
Even with the challenges presented by the trade war between the USA and China, Dachser USA Air & Sea Logistics were able to end the year just slightly above flat by focusing on growing our customer base and building for the future. We understand that as the market becomes more volatile and uncertain, providing innovative and cost-effective solutions as well as superior customer service is the key to retaining and attracting loyal customers.Guido Gries, Managing Director, Dachser Americas
Development in the United States
Dachser SE’s subsidiary, Dachser USA Air & Sea Logistics Inc.’s gross revenue remained essentially flat with a 0.6 percent increase from 2018 to 2019 to 223 million USD
Along with growing its global network, Dachser’s mission is to create an integrated digital environment whereby transparency and accessibility that enable end-to-end operational effectiveness and efficiencies remain paramount. Through the utilization of its “Othello” transportation management system, Dachser USA Air & Sea Logistics provides its customers with a one-stop-shop approach with enhanced connectivity and visibility of their entire supply chain.
Additionally, Dachser USA Air & Sea Logistics will continue to focus on providing and expanding dedicated competency centers and knowledgeable service teams to address nuanced sectors, such as automotive as well as Life Science and Healthcare (LSH), each of which require sophisticated expertise. Receiving its CEIV certification in 2019 allows Dachser USA Air & Sea Logistics to build a strong foundation for its LSH business. Furthermore, it will continue to expand its technology offerings by working in collaboration with well-known startups as well as growing technology companies.
As a family-owned business, Dachser supports a culturally diverse environment and believes in the value of nurturing young talent in the industry. In addition to its robust apprenticeship program at its corporate headquarters in Kempten, Germany, Dachser USA Air & Sea Logistics implements a highly coveted internship program at multiple locations throughout the country. What’s more, Dachser USA Air & Sea Logistics has hosted more than 30 interns at multiple US offices.
“At Dachser USA Air & Sea Logistics, all of us feel a sense of loyalty and personal commitment to each other and our customers. We care about providing logistics solutions that make our customers’ lives easier. That's why we've spent the past 90 years developing a robust global network and comprehensive portfolio of products and services that our customers have come to rely on,” said Mr. Gries.