In this edition Guido Henke, Director Europe LAN CARGO, talks to Jochen Müller, Board Member of Air Freight, Fairs and Special Events Logistics of Schenker Deutschland AG, also responsible for the DB Schenker Logistics Region Europe Central at his office in Frankfurt/Kelsterbach.
Mr. Müller started working for DB Schenker in 1994 and he has held different positions in Germany, United Kingdom and the United States of America being his last one CEO of Schenker Limited UK before he was then transferred to his actual position Frankfurt in November 2011.
Guido Henke (GH): Mr. Müller, talking about your company, how important is the logistics?
Jochen Müller (JM): DB Schenker, the transportation and logistics activities of Deutsche Bahn, the German Railways, operates in the market as DB Schenker Logistics and DB Schenker Rail. DB Schenker Logistics, as integrated logistics services provider, offers European land transport, global air and ocean freight, as well as sophisticated contract logistics solutions and global supply chain management from a single source. Our sister DB Schenker Rail is the leading provider of rail freight services in Europe.
GH: And what is the importance of airfreight within DB Schenker Logistics?
JM: You have to consider that we have an enormous land transport within Europe, so airfreight represents globally about 20% from total revenues.
GH: How many employees work in airfreight?
JM: Worldwide we are about 6.000 and in Germany between 600 and 700. This is pure airfreight staff, without supporting activities.
GH: And in Latin America?
JM: The staff is around 300.
GH: How do you find the results during this year 2013?
JM: We have been doing well in a very difficult market. In Germany in particular we were able to grow in a shrinking market.
GH: What do you expect for the rest of 2013?
JM: The market is not really helping, so we have to help ourselves. But we have been doing this already in the past with good results, so we are going to continue with this strategy. Experts do not expect a recovery of the markets which means that the fight for the same cake will be even more intensive.
GH: And for 2014?
JM: We expect no significant growth in the market for next year but still want to grow our share.
GH: How do you keep the right balance between the short term decisions not affecting the long term vision you have as a company?
JM: Long term we want to be one of the top players in every market, because we will only be strong in our complete network if we have a key position in every single market. In line with our strategy, we want to outperform market growth, want to be No. 1 in operational excellence and customer solution orientation. Not to forget that we also want to be the No. 1 Eco Logistics brand.
GH: What are those long-term objectives?
JM: We are strongly convinced that quality is the key factor for the long-term success. Of course you can make some attractive offers if you accept some quality reductions, but this is not the best for the long-term reputation of a company. On the other hand it is obvious that quality has its price. But even during low seasons we were able to maintain our quality standards and this showed positive results. At the end this is also for the interest of the customers.
GH: What is your experience with pharma and how do you see the future development of this market segment?
JM: In order to continue growing you definitively have to deal with market segments which show a good future growth potential and pharma is definitively one of them. So, you have to focus on this segment. I do see a healthy growing potential here. You have to invest and build a strong relationship with the industry and gain the confidence which is very important. A team-work approach is fundamental here. And allow me to emphasize again, that especially in pharma quality will be the determining factor to success. Competitive pricing is not enough, you need experts who understand the needs of the industry, who speak the same language.
GH: And other segments?
JM: We have many specialists in these “vertical” markets in our company, for example automotive, semiconductor and solar, aeronautical parts, and of course pharmaceuticals sectors.
GH: DB Schenker Logistics plays an important role in the segment of transport for sport events. What can you tell us about this?
JM: In the fair and exhibition segment we are market leader and we keep developing our structure and specialized staff, building on top of this segments for “Special Transports”. Once you gain the specialized know-how you can apply this, with slight improvements, to other segments and that is what we are offering in a so called Event Logistics, which does not only include sport events, but also musical tournees, for example.
We are active in the Olympics, for example, as a co-partner or independent logistics provider.
GH: Are you going to be present also during the Olympics in Rio de Janeiro?
JM: We will be definitively be there supporting our customers. The nomination of the official partner for this Olympics is still not decided.
GH: Coming to our region, how important is Latin America for DB Schenker in airfreight?
JM: For us Latin America is one of the markets of the future. This is also reflected in our company strategy. If we want to continue growing, in Europe it will be really hard for us in airfreight, as there is not too much room for big steps from our actual position. In Latin America, on the other side, there is much more space for us to grow. It is a growing market, so we will grow there, organically and via potential acquisitions.
GH: Which are your biggest markets there?
JM: The main markets are very clear. Of course Brazil, because of its size and its economic strength, but also Argentina and Chile are very important markets for us. I have just attended a conference in South America in order to intensify the relationship with the region.
GH: How would you evaluate LAN Cargo as a partner? What are, from your perspective, our strengths and on which aspects do we still not meet the standards DB Schenker Logistics is expecting?
JM: Well, first of all it is important to say the there are no negative feedbacks of your performance. Of course we have some expectations, mainly because we see very clearly the network you have to and in Latin America. What is always important for us, as I already mentioned, is quality, so that we have the chance to develop something together where quality is the driver, where we agree on clearly defined products. It is also important some kind of flexibility. Especially if the shipper comes with unexpected needs, which happens sometimes, and there we need the flexibility from our partners. Because we are only as good as a logistic partner as we are with our partners.
Another aspect is the cost-side, and there we should try to develop together processes and alternatives where we both can streamline our costs. E-freight is a good example for that. I am convinced that there is a huge opportunity, not only to make our processes more efficient and therefore reduce our costs, but also to strengthen our partnership.
Professional staff on the airline side is also very important for us. To find on the other side a competent and professional partner, who understands what our need is and who can quickly find a proper solution to our problem by doing so is gaining our confidence, certainly building up a stronger relationship.
GH: Talking about you, are you from Frankfurt?
JM: No, even though I have worked at different times in Frankfurt, I was born in Worms, Germany, and now live in Mannheim.
GH: So, you are not a fan of Eintracht Frankfurt, are you?
JM: In my case, I sympathize with Mainz 05, especially because I have great respect for what they did these past years with a really limited budget.
GH: And on a country level?
JM: Allow me to answer this way. On our Board I have one colleague coming from Bavaria and another one coming from Dortmund. Personally, and without being a true fan, I like more the style of Dortmund, but I have to admit that Bayern München is more successful.
GH: Thank you very much for your time and this conversation.
