German logistics company, Dachser, claims there was virtually no dip in company revenue in 2020, with a strong second half offsetting the impact of European lockdowns in April and May.
Investments of €190 million were earmarked for logistics capacity, technical equipment, and digital systems.
Last year, according to Dachser, was characterised by the loyalty and climate of mutual trust between the logistics provider, its customers, and its transport partners.
Dachser’s consolidated net revenue totalled €5.61 billion, a slight decrease of 0.9 per cent compared to the previous year.
“We have delivered on our promise to be a rock of stability during the coronavirus crisis,” said Dachser CEO, Burkhard Eling.
“The enormous encouragement of our customers and partners has been a great source of motivation. Special thanks are due to our staff and all those who drive on behalf of Dachser, who made last year such a success. Despite the extra burdens imposed by Covid-19, their performance was remarkable and they shouldered the responsibility that comes with systemic relevance at all times.”
Dachser kept its customers’ global supply chains running without interruption and came up with flexible solutions to capacity bottlenecks, particularly on intercontinental freight services. At the same time, the company provided the best possible protection for its employees’ health and supported its longstanding service partners in Europe.
In contrast to the decline of 2.2 per cent in the Road Logistics business division, the Air & Sea Logistics business unit saw growth of 5.2 per cent. The business field benefited from having air freight charter capacity of its own as well as from high freight rates for intercontinental transport. At the Group level, the number of shipments dropped by 2.5 per cent to 78.6 million, while tonnage fell by 2.9 percent to 39.8 million metric tonnes.
“Following a solid first quarter, the lockdowns in many European countries meant sometimes drastic declines in overland transport shipments,” said Eling.
“There was a clear improvement by June, however, with volumes remaining more or less consistently above 2019 levels. Our business model has proved that it can withstand crises, at the same time boasting strong growth potential and adaptability.”
Dachser has described its business development in detail.
In 2020, Dachser’s Road Logistics business – comprising the transport and warehousing of industrial and consumer goods (European Logistics) and food (Food Logistics) – once again lost none of its growth momentum. However, even by the end of the year, it was impossible to fully compensate for lockdown-driven reductions in European volume in April and May, with the European Logistics business units in France and on the Iberian Peninsula the hardest hit. This caused the consolidated net revenue of the Road Logistics business field to drop by 2.2 percent to approximately €4.5 billion.
While the European Logistics business line saw a decline of 3.2 per cent to €3.52 billion, Dachser Food Logistics upped its revenue to €982 million, an increase of 1.9 per cent. This business line faced a relatively turbulent 2020, marked on the one hand by panic buying in supermarkets and on the other by repeated closures in the catering, hospitality, and events industries in Germany. Nonetheless, it managed to make up for the decline in shipments in these sectors by acquiring new accounts and obtaining larger volumes of business from food retailers. Over the course of the year, Dachser Food Logistics increased the tonnage transported by 1.6 per cent.
Revenue at the Air & Sea Logistics business unit reportedly benefitted from the shortages in air and sea freight capacity, and the corresponding rise in freight rates, throughout 2020. Buoyed by its activities in Asia, the business field upped its revenue by 5.2 percent to a total of €1.2 billion.
“We responded swiftly to the bottlenecks in air freight capacity by chartering aircraft to expand our own capacity, initially for medical supplies, later also transporting other goods for our customers,” said Eling.
“Overall, we operated around 150 charter flights between Europe, Asia, and the US during 2020,” he said.
The sea freight situation was no better, according to Dachser, with scarce capacity and the acute lack of empty containers resulting in a volatile market and soaring freight rates. The LCL routes, known as ‘ocean groupage’, benefitted in particular from this development.
“Given the great potential we see for this premium service, we aim to further enhance the frequency, capacity, and quality of our LCL routes and push ahead with connecting them seamlessly to our European groupage network,” said Eling.
He emphasised that Dachser refused to let the coronavirus crisis dictate its actions. This applies both to the generational change on the Executive Board—prepared in 2020 and finalised on 1 January 2021 – and to investment planning.
“Last year, we invested €142.6 million in our global logistics network,” said Eling. “This year, we are earmarking some €190 million to create additional contract logistics capacity and forge ahead with digitalising processes and business models.”
The newly created IT & Development executive unit headed by Chief Development Officer Stefan Hohm will figure prominently in this regard.
According to Eling, the high equity ratio of 61.6 per cent and the shareholders’ clear allegiance to the family-owned company give Dachser the support it needs to continue its tried-and-true policy of growth by drawing on its own resources. Moreover, the coronavirus crisis has reinforced Dachser’s commitment to training, particularly for drivers and logistics operatives, that is deeply rooted in its corporate culture. In 2020, despite the constraints of the coronavirus crisis, 625 new trainees and students on dual degree programs started their careers at Dachser in Germany.
“Our goal is to preserve the company’s strengths while enhancing its agility,” said Eling.
“In other words, we are expediting the integration of our networks and the introduction of digital technologies for use in areas such as machine learning or swap body localisation.”
The company will also be stepping up its sustainability and climate protection efforts.
“Over the next two years, we intend to start by expanding our Dachser Emission-Free Delivery areas to at least eleven European cities, while deploying more battery electric trucks and electrically assisted cargo bikes,” said Eling. “What’s more, as a member of the German Hydrogen and Fuel Cell Association, we are actively supporting the research and testing of hydrogen fuel-cell drives for trucks.”