title 12 logistics Pole position

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Mariah Wright
6 years ago
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IN FOCUS The rebound in the economy has continued through 2011. Globalized trade currents are picking up momentum and global growth has remained robust.

And yet, the market participants have to work hard to achieve success: the extreme volatility of supply and demand at all levels as well as increasingly complex security requirements are only two of

1 IN FOCUS The rebound in the economy has continued through Globalized trade currents are picking up momentum and global growth has remained robust. Air freight logistics play a pivotal role in this development. In the medium term, the segment will expand by five to six percent per year. And yet, the market participants have to work hard to achieve success: the extreme volatility of supply and demand at all levels as well as increasingly complex security requirements are only two of the trends that are making it harder for shippers, carriers and airlines to plan their business and they require an extreme degree of flexibility. DB Schenker has positioned itself so well strategically that the requirements of a diverse range of customers can be met at all times. This was further illustrated by conversations the logistics reporters had at Europe s second-largest cargo airport in Frankfurt am Main and in Singapore. The upshot: A n exciting market offering all manner of opportunities for an integrated logistics service provider, its partners and customers.

title 12 logistics 1 2011 Pole position In Frankfurt, at DB Schenker s European hub, the volume of cargo is increasing.

2 title 12 logistics Pole position In Frankfurt, at DB Schenker s European hub, the volume of cargo is increasing. But despite excellent prospects, the air freight industry faces enormous challenges. A visit to Europe s second-largest cargo airport shows how DB Schenker is rising to the task

13 logistics 1 2011 titel Ai r frei g ht i s b oom i ng : An

3 13 logistics titel Ai r frei g ht i s b oom i ng : An automobile is loaded onto the Emirates cargo freighter heading for Dubai

4 B title 14 logistics T he m ark et has b ecom e m uch m ore v olati le : Maren Maischein, DB Schenker Project Manager at the hub in Frankfurt und le and process: DB Schenker in Frankfurt handled 13,500 tonnes of freight in January alone K eepi ng an eye on ev erythi ng : Adem Loek (Hall Supervisor Import) with Christl Schmidt (Hall Supervisor Export)

15 logistics 1 2011 titel O pti m i sti c D B Schenk er- team: Stefan Mais (Import), Manfred Winstermann (Warehouse & Transportation), Rafael Evgenikos (Export) Slowly and majestically, its turbines

No sooner has the Boeing 747-400F reached its parking position than the engines fall silent. The hatches open and the forklifts from Fraport arrive. Time is of the essence and is never wasted.

5 15 logistics titel O pti m i sti c D B Schenk er- team: Stefan Mais (Import), Manfred Winstermann (Warehouse & Transportation), Rafael Evgenikos (Export) Slowly and majestically, its turbines giving off a highpitch whine, the freighter with the white fuselage and the golden Emirates -logo taxis from the runway. No sooner has the Boeing F reached its parking position than the engines fall silent. The hatches open and the forklifts from Fraport arrive. Time is of the essence and is never wasted. The machine from Toledo, Ohio (USA) has 30 tonnes of freight on board destined for DB Schenker s European hub at Frankfurt Airport. The freight is unloaded here, and the rest of the cargo still roughly 70 tonnes is transported further on to the United Arab Emirates. Air freight is on the upswing particularly at DB Schenker! says Maren Maischein, Project Manager DB SCHENKERjetcargo at the European hub during a tour of the warehouse and the apron. And in effect, air freight with its turnover of 3.2 billion makes up 23 percent of the total revenue of DB Schenker Logistics. Given the increase in international labor division, the signs for this segment are clearly pointing to growth: regardless of whether you ask the experts from Airbus, Boeing or IATA everyone is anticipating average annual growth rates of five to six percent in the coming years. This is no reason, however, for Maren Maischein and her colleagues to rest on their laurels. The forecasts might well be excellent but the market has become much more volatile, says the air freight specialist. Prior to the global financial crisis, cargo rates could quite reliably be planned in advance for six to nine months. Today, that is hardly possible. In order to safeguard their profits, the airlines have learned to be much quicker at adjusting their rates and capacities to market conditions than before the crisis. In terms of cost that means our offer is subject to far greater fluctuations than before. Maischein says that today, the market situation could change completely in less than four weeks. DB Schenker is countering this movement by introducing a package of strategic measures. The aim is to safeguard the reliability of the offer for the customers as well as the competitiveness of the company in the long-term. Maren Maischein says that, in order to improve the planning ability for customers and for ourselves, we sign block space agreements meaning fixed freight capacities on certain routes, and longterm contracts with selected airlines. What s more, our own flight operations help the customers and us. It means that in these times of dwindling capacities and high prices, we do not have to look to the spot markets as frequently. I ncreased safety req ui rem ents: Packages are x-rayed directly at the DB Schenker hub in Frankfurt

6 title 16 logistics Major national carriers such as Air France/KLM Cargo, Korean Air Cargo, Lufthansa Cargo or Emirates offer space for loading in the cargo holds of their freighters but also in the hold of the passenger aircraft belonging to their parent companies to the globally operating freight forwarders. These airlines, as well as half a dozen others, comprise DB Schenker s most important capacity providers. The integrated logistics service provider also cooperates with cargo-only carriers such as Cargolux, Air Cargo Germany, Atlas Air or Airbridge Cargo. Although DB Schenker does not boast its own fleet of aircraft, around ten percent of the company s air freight is forwarded through self-managed flight operations. This process works in much the same way as with a scheduled airline. With access to long-term chartered freighters, DB Schenker can offer its customers around 800 flights per year with fixed destinations at fixed times (see map page 19). The Emirates jumbo is just one of these reliable offers for the shipping and transport industry. In light of the markets unpredictability, the sheer size of DB Schenker is a real advantage. The company is among the world s top three in the air freight segment. The extreme fluctuations we face again and again don t affect all markets at the same time and not with the same force, says Maischein. 3.2 B IL L I O N E U R O is the 2010 revenue for DB Schenker in air freight services Due to our global presence, we can often temporarily counterbalance weaker markets through temporarily stronger markets. One could put it this way: DB Schenker is an all-round athlete who is not easily winded. DB Schenker s diversified service portfolio, supported by efficient and standardized processes (see page 23), boosts competiveness in a volatile environment: profitable niches are occupied, weaknesses in one segment are counterbalanced through strengths in another a healthy foundation on a broad basis is in place and it ultimately benefits all customers. Regardless of whether the company is dealing with particularly urgent shipments or perishable goods this module offers virtually every customer a solution for his logistical requirement. Very often, the teams at DB Schenker can offer multimodal complete solutions as well as contract logistics from a single source. In Frankfurt, an entire team of Key Accountants is dedicated to ensuring that transport for major customers is organized as smoothly as possible. It is a real added value for our customers, having only one contact person for the entire supply chain, says Maren Maischein. The ambitious cargo manager, who successfully juggles the responsibilities of being a mother and pursuing her career at DB Schenker, is optimistic in light of this strategic positioning. We have conquered a pole position and will achieve considerable things in the near future together with our customers! This impression is confirmed during a tour around the hub in Frankfurt. Today is a very strong day for exports, explains Maischein, who previously spent several years here as a team manager. While the shipment is professionally consolidated on modern palletizing lines, Maischein compares notes with Manfred Winstermann, Manager Warehouse & Transportation. Imports and exports each have their own peak times: Sundays to Tuesdays are the main import days, and Wednesday to Saturday sees a surge in exports. A steady stream of packages flows into the 25,000 square meter warehouse in the Cargo City Süd and then pours out again! Air freight shipments from all over the world are bundled here, stored temporarily and then processed for onward transport, and that includes straight transit freight. In January alone, the team at Frankfurt handled 30,000 consolidated shipments with a gross weight of 13,500 tonnes. Whether it is in Australia, China, Japan, Singapore, South Korea, the USA or the United Arab Emirates DB Schenker has its own hubs at all major airports, ensuring consistently high service quality from one source (see map page 19). Import and export units that had previously operated at different sites, were merged into a single unit in 2009 when DB Schenker introduced its new air cargo hub in Frankfurt, Europe s largest freight airport. The neighboring airport in Hahn, a former military base belonging to the US-Air Force, is also connected to Frankfurt. DB Schenker was one of the first freight carriers to invest in its own X-ray equipment, even before moving into the new warehouse. Apart from the extreme volatility, the ever increasing stringent safety requirements of the authorities in the US and the EU pose a major challenge for the industry, says Maren Maischein. At stake here is the status as Regulated Agent, which every consignor who ships air freight aspires to in the EU. If the forwarder has not been certified, his consolidated shipments are subject to renewed security checks by the airlines. Each consignor must be certified by the German government aviation security authorities, and each package going to the USA must be screened. This is where the oversized high-tech X-ray equipment with its special imaging technique comes into play: The shadowy contours of a chair and several dark receptacles appear on the monitor: motorcycle tanks. We inspect every package for explosive materials that is not designated as safe according to the German government aviation security authorities, says Manfred Winstermann. This facility can even screen through six centimeters of steel. Although the Emirates jumbo is parked only a few hundred meters straight-line distance from the warehouse, it takes eight to ten hours before the freight is stowed in the warehouse. Customs formalities and apron transfers by the Ramp Agents Fraport all take time. At the DB Schenker warehouse, the employees take care of the freight a total of 250 members of staff work here. We work 24 hours a day, seven days a week,

17 logistics 1 2011 titel Air freight hub Frankfurt n Frankfurt Airport is the seventh largest Air-Cargo-Hub in the world and the No. 2 in Europe after P aris Charles de Gaulle.

7 17 logistics titel Air freight hub Frankfurt n Frankfurt Airport is the seventh largest Air-Cargo-Hub in the world and the No. 2 in Europe after P aris Charles de Gaulle. n In 2010, 2,231,348 tonnes of air freight were handled, 21.5 percent more than in the previous year. n A cargo volume of 3.16 million tones has been forecast for the year n Top dog among the carriers is Lufthansa Cargo that manages the warehouse and headquarters in the Cargo City Nord. n The 98 -hectare Cargo City Süd is home to other carriers and forwarders, among them DB Schenker with its Europe-Hub.

Cargo and aviation. Shaping Europe s smartest cargo hub at Amsterdam Airport. April 2018

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