The German road freight and warehousing business, Dachser saw reasonable growth in its core trucking business but, probably unsurprisingly, its freight forwarding operation suffered throughout the 2016 financial year. Like so many Mittelstand German companies its published results are short on detail and Dachser has not yet lodged its accounts for the year, but what it has outlined suggested that whilst it remains strong in road freight and warehousing, medium-sized forwarders, such as itself, have been struggling.
In terms of revenue, Dachser’s road freight business grew by 2.4% to €3.5bn. Underlying demand was reasonable with a 2.3% increase in tonnage carried, suggesting that market conditions were not too bad. However, it is hard to tell without profit numbers.
What did perform well was the company’s ‘Food Logistics’ segment, which saw sales rise by 9.5% to €815m, driven by retail demand in Germany. This German focus is in-keeping with much of the rest of the company, which looks to exploit the country’s position at the centre of trade movements in both Central and Western Europe.
In contrast the ‘Air & Sea Logistics’ freight forwarding business saw revenue fall by 3% to a gross revenue of €1.54bn. Bearing in mind that Dachser looks to integrate its contract logistics business with its forwarding operations, it might be expected that higher demand in logistics would have supported freight forwarding, but this appears not to be the case with shipment volumes flat. Dachser said that the “decrease in revenue was due to low international freight rates, especially in sea freight, and negative currency effects”. The numbers might suggest that margins, and therefore profits, would have been squeezed badly, however the company’s CEO Bernhard Simon commented, “[W]e know how to deal with the volatile nature of international air and sea freight, and are consistently expanding this business field”.
Overall the company saw revenue up by 1.7% to €5.71m. For 2017, investment in new warehouse capacity and IT will rise 40% to €177m.
Source: Transport Intelligence, April 20, 2017
Author: Thomas Cullen