Month: November 2019

Spanish road freight startup Ontruck has acquired digital freight forwarding platform Briver, in an attempt to consolidate its market position in the Spanish region of Cataluña. Ontruck is a marketplace that provides instant price quotes to shippers for delivering shipments within specific time windows desired by their end consumers. 

Ontruck is one amongst the new-age, on-demand delivery startups popping up in the rapidly growing European market that is worth €355.1 billion this year. Carriers use Ontruck’s smartphone application to accept or reject jobs. If they accept a shipment, they can check their whereabouts at nodal points via the application, receiving their payments after every successful delivery. 

On the shipper side of the equation, Ontruck’s precision logistics allows them to access instant price quotes, choose from an array of vehicle specifications, and pinpoint delivery schedules rather than leave them open-ended. 

Before its acquisition, Briver was a part of Wtransnet, a freight and vehicle exchange company based in Iberia, Spain. The company has a well-spread network of over 11,000 transportation companies across 33 countries, using Briver to seamlessly connect shippers and carriers by providing them real-time visibility into road freight movement. Carriers leverage the new-found visibility to significantly reduce the empty kilometres travelled, while shippers can tap into the system to track and trace freight.

“Briver offers many strengths as a digital road freight platform. Not only does it have a strong reputation and network offering a standout service in Cataluña, but it has succeeded in sustaining high margins and building out a large carrier database,” said Iñigo Juantegui, the CEO of Ontruck. 

As such, Cataluña draws about 10% of the road transportation business in Spain – a sizable share within a rapidly growing market. Juantegui explained that integrating a company like Briver into Ontruck helps the startup to bolster its presence in Spain as it holds a complementary client base. 

“In the weeks leading up to the holidays, demand for vehicles increases to over 40% kicking off with Black Friday in late November, all the way through to Christmas. The Briver acquisition will harness Ontruck’s capacity to meet the influx in demand of the Christmas rush by increasing the vehicles available for shipments by 20% in Cataluña,” said Juantegui. 

This scenario is providential for Ontruck, which is on track to triple its turnover from €9 million in 2018 to €27 million this year. The company currently services major brands like Pepsico, Codorniu, GBFoods, Mitsubishi, CHEP and Decathlon, collaborating with around 2,500 vehicles to pull off its precision logistics offering. Apart from perennially looking to increase the volume it ships, it also is doubling down on new clients such as Danone and P&G. 

With Briver’s integration, Ontruck expects to see a 15% growth in business volume for the company. Juantegui stated that Briver would continue to run independently from its parent company, but under a common leadership with no operational changes for clients from either of the brands. “Briver’s team will remain working for the company as if nothing changes. For the time being, they will continue working from their office in Terrassa, Barcelona,” he said. 

Ontruck will continue to expand its geographic footprint, having grown to two new markets – France and the Netherlands – this year. The startup is also looking to open in new cities in countries where it already has its operations running, while at the same time scaling up its service offerings, like booking international full truck loads (FTLs) and providing new ways to negotiate volumes. 

Logistics real estate giant Prologis Inc. (NYSE:PLD) and Norges Bank Investment Management, the investment arm of Norway’s oil fund, have struck a deal to acquire a 19 million-square-foot U.S. portfolio in a $1.99 billion deal, the Norges Bank arm said.

Under the terms of a joint venture agreement, the Norges Bank unit will acquire a 45% stake for approximately $896 million. Prologis will control the remaining 55% and manage the properties. The transaction will not require any financing to be consummated, the unit said.

The joint venture is buying 127 properties in multiple U.S. markets, notably Southern California, the San Francisco Bay Area, Seattle and Dallas.

The deal is an outgrowth of Prologis’ $3.99 billion acquisition in July of Industrial Property Trust Inc., whose 375 million-square-foot portfolio comprised 236 properties, 96% of which were in existing Prologis markets.

Launched in 1996, the Norwegian oil fund today holds small stakes in more than 9,000 companies worldwide, according to the investment arm. On any given trading day, it holds 1.4% of all of the world’s publicly traded companies.

Prologis, the world’s largest developer, owner and operator of logistics warehouses, controls 797 million square feet worldwide. Of that, 460 million square feet is in the U.S.

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Over 14,000 sheep have died after a ship carrying the animals capsized off the coast of Romania.

The vessel, the Queen Hind, overturned Sunday, November 24 in the Black Sea shortly after loading the sheep at Midia port.

The Saudi Arabian port of Jeddah was one of the vessel’s reported destinations.

The causes of the capsizing are unknown but local media reports claim the vessel may have been overloaded.

Romanian police, military and divers desperately attempted to right the vessel and tow it to port in a bid to save the trapped animals Sunday and Monday.

However, while the crew of 20 Syrians and one Lebanese were safely rescued, only 33 sheep out of 14,600 are thought to have survived.

Animal welfare activists call livestock vessels such as the Queen Hind “death ships,” claiming animals are treated appallingly during loading and at sea, and are effectively cooked to death on board during the hot summer months.

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Eurogroup for Animals is now urging the European Union to take legal action against Romania, the EU’s third-largest sheep breeder after Britain and Spain.

It claims the 1980-built 3,786 gross ton Queen Hind was approved in March by the Romanian National Veterinary and Food Authority to travel with the live animals “despite being outdated, not built for live transport, and encountering engine problems as recently as last year.”

“Infringement proceedings are needed to ensure a proper application on the EU law on transport and the effective protection of the animals,” said Reineke Hameleers, Director of Eurogroup for Animals.

“It is high time the Commission intervened, both by tackling maladministration by Romania and, for the longer term, puts forward a concrete strategy to replace live transport with a meat- and carcasses-only trade.” 

Animals International’s director in the EU, Gabriel Paun, said tragedies like the Queen Hind would continue to occur regardless of improvements and better law enforcement. “There is just one way to end this risky, unnecessary and barbaric trade: replace live export with the trade in meat and carcasses,” he added.

Romania’s main livestock breeder and exporter association, Acebop, has promised to urgently investigate what happened to the Queen Hind.

“Our association is shocked by the disaster,” Acebop president, Mary Pana, told AFP. “If we cannot protect livestock during long-distance transports, we should outright ban them.”

Romania’s exports of sheep to the Middle East were widely criticized this summer for being unnecessarily cruel.

In July, Vytenis Andriukaitis, who was then the European commissioner in charge of health and food safety, demanded the EU Member State block the shipment of 70,000 sheep to the Middle East on animal welfare grounds citing extreme temperatures during summer in the Black Sea region.

His calls went unheeded and the shipment proceeded.

In evidence given to the EU Commission in August, Animals International said as a result of the shipment hundreds of sheep had died by the time they reached their destinations, with an investigator describing “piles of dead sheep” at one unloading point in the Gulf.

“They also saw surviving sheep being ‘beaten’ as they disembarked in temperatures of over 40°C,” reported the activist group.

“While the initial destination was Kuwait, the vessel made five stops in the Gulf, increasing the risks of suffering and death from heat stress.

“Animals were unloaded in Saudi Arabia, Kuwait, Dubai, Qatar and Oman.”

More FreightWaves and American Shipper articles by Mike

A consignment of 250 black Angus-cross weanling bulls made its way from Ireland to Algeria on Nov. 21, marking the advent of Irish cattle into the African country and potentially opening up a new market for Irish livestock – especially with the reality of Brexit looming. This delivery is the first livestock to head to Algeria from Ireland after a new veterinary protocol was agreed upon recently by the Irish and Algerian departments of agriculture. 

The last cattle delivery from Ireland to Algeria before this consignment happened in the 1980s. Every year, Algeria imports roughly 150,000 cattle, making it a highly lucrative market for Irish rearers if they continue to deliver high quality and healthy livestock to the north African nation. 

The Wicklow Calf Company exported the Angus bulls in association with Bord Bia, the Irish food board, which was in touch with the customers and facilitated the logistics required to safely transport the cattle from the farm to the Algerian port.

But going beyond the trade dynamics between countries with regard to cattle exports, it is also essential to make sure the authenticity of the breed in a transaction. Take the case of the black Angus bull consignment that was sent to Algeria from Ireland. The Angus breed is highly sought after for well-marbled beef, leading it to be heavily counterfeited. 

The U.S. is the largest consumer of beef in the world, having consumed 60.9 million metric tonnes of beef in 2018. The black Angus variant is a consumer favourite as can be seen with the number of businesses that claim to rear these cattle. Of the 86 U.S. Department of Agriculture-certified companies that total 25% of all the beef produced in the country, 63 of them have Angus on their list. 

Counterfeiting and mislabeled products start right from the colour of the Angus cattle in question. The Angus breed comes in two primary colours – black and red, with the former being the one that draws the most interest, leading to black Angus cattle selling for a much higher cost in the market than its red counterpart. 

Though clamour for black Angus beef is well documented, cattle growers and beef stakeholders mostly agree that the taste of meat from both the black and red variants taste the same. This makes it easy for slaughterhouses and beef businesses to wilfully interchange variants, as the cost of the red Angus is slightly lower than the black Angus.

Cattle growers have also found that the black Angus bulls are more reactive to heat than their red counterparts, as their black hide absorbs heat better than the red one. During the hot summer months, black Angus bulls tend to graze less and rest under the shade a lot more than the red Angus bulls. This shows up on the weighing scale, as red Angus bulls from the same farm as the black ones tend to be a bit heavier – giving greater dividends to stakeholders who can rear, buy, and sell the red Angus by mislabeling them as a black variant. 

All this leads black Angus beef to be at the epicenter of counterfeiting, pushed forward by small- and mid-tier rearing farms and beef stakeholders that wish to exploit the system. 

Introducing the technology of blockchain can help bring more order into the black Angus supply chain, as blockchain will force every stakeholder in the value chain to push data onto an immutable ledger – from the farm to the supermarket shelves. 

Being decentralized, blockchain provides all the stakeholders with equal control over the network, making it impossible for any single party to edit or mislabel products without the explicit approval of every stakeholder in the system. Apart from restricting the entry of counterfeit products, it also helps with trust, because consumers can scan QR codes to understand their product’s provenance.  

As consumer traits and expectations keep evolving and as supply chains increasingly go global, it is critical to provide transparency and visibility into logistics operations. Apart from infusing trust into the system, such technology can help stakeholders shed inefficiencies and move towards precision logistics – thus benefiting the landscape in its entirety. 

Multimodal logistics service provider Europa Worldwide Group has appointed Alec Kirkbride, the former national building manager of supermarket chain Aldi Stores U.K., as the head of property for its new £60 million state-of-the-art logistics facility being built at Midlands Logistics Park in Corby, England. 

Once the construction is completed, the new facility will become Europa’s largest such storage facility in the U.K., while also doubling the company’s warehousing portfolio. Europa, in its statement, stated that the building will cater to high-quality institutional specifications, including an above-market standard of an 18-meter high ceiling that can accommodate three floors of mezzanines. 

Bringing Kirkbride into the management team will help expedite the facility’s construction, as Kirkbride is said to come in with extensive experience in the construction segment, having managed several large-scale national infrastructure projects and complex commercial sites, while playing a pivotal role in negotiating multi-million-pound procurement contracts. 

At 715,000 square feet, the logistics facility is very expansive. Europa has mentioned that the warehouse’s construction work will be completed by June 2020. “I’m currently heavily involved in the Corby build, especially at this stage of proceedings. Once operational, the day-to-day management of the warehouse will be handed over to the warehouse director, Maria-Torrent March,” said Kirkbride. 

“My role as head of property covers all of the Europa real estate, including our warehouses and an extensive network of offices. I’ll be looking at how we can drive business efficiencies, reviewing current procurement methods and suggesting ways in which we can inject new ideas to add value to our current business model,” he continued. 

Europa’s fortunes this year have been tremendously fruitful; it is the best year in the company’s 50-year history in terms of turnover and profit. The turnover rose by 22% this year to £220 million and profit to over £6 million. 

“We’re delighted to announce this huge investment in our logistics operation at a time of massive growth at Europa,” said Andrew Baxter, managing director at Europa Worldwide Group. “This is the single biggest investment we have ever made since I acquired the business in 2013. It demonstrates our ambition to strengthen our third-party logistics operation at a time of huge market growth, particularly for e-commerce logistics.”

Though Brexit has led several logistics stakeholders to vent their frustration, Baxter is amongst the Brexiters who believe that the country’s divorce of Europe will only lead to better business. However, Baxter has commented that Europa spent over £1 million on Brexit preparations, which he admitted has become complicated due to the deadline being pushed off multiple times over this year. 

Baxter hopes for a more streamlined economic environment post-Brexit, as it will cater exclusively to British business interests rather than pander to the collective good of the European Union. In the context of Europa, Baxter does expect disruptions immediately at the onset of Brexit, which puts Europa’s management restructuring and business future-proofing in perspective. 

With e-commerce’s share of the retail consumption pie getting bigger every year, investing in futuristic warehouses can expedite freight movement through the supply chains, helping businesses improve their operational efficiency. Europa’s warehouses offer a wide range of capabilities, including ecommerce fulfilment, inventory management, packing and labelling, quality control and critical parts management.  

A sharp reduction in costs helped CMA CGM boost profits in the third quarter, but the purchase of CEVA Logistics continues to weigh heavily on the bottom line of the container shipping and logistics conglomerate.

CMA CGM’s core earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.012 billion in the third quarter of this year were almost three times higher than the $364.5 million reported in the third quarter of 2018, while the carrier also reported an EBITDA margin of 13.3%, up from just 6% a year earlier.

CMA CGM, ranked fourth globally in terms of container shipping capacity by Alphaliner (see table below), also saw revenue surge 25.8% year-on-year in the third quarter to $7.624 billion.

However, while the carrier’s profit from shipping operations rose to $158.9 million in the period from $103.1 million a year earlier, its overall consolidated net profit slumped to $45.4 million from $103.1 million in the third quarter of 2018.

The CEVA factor

CMA CGM denied the completion of its multi-billion purchase earlier this year of CEVA Logistics, ranked 13^th among global third-party logistics providers (3PLs) by revenue in 2018 according to Armstrong & Associates (see table below), was overburdening the company with debt. However, it did confirm it would continue to divest in a bid to raise $2 billion by next year.

“In line with the CEVA Logistics acquisition financing plan, the Group has lightened its capital structure by divesting and refinancing certain of its assets,” the company reported.

“These transactions should enable the Group to raise more than $2 billion in cash by mid-2020, extend the Group’s debt maturities and reduce its net debt by more than $900 million.”

The plan includes raising $860 million from vessel sale and leaseback transactions, of which $650 million was completed during the third quarter of 2019. An additional $210 million is scheduled “to close over the coming weeks,” said CMA CGM.

“The proceeds will primarily be used to pay down the loan contracted to acquire CEVA Logistics, with the balance currently standing at $200 million,” it reported.

CEVA not terminal, says CMA CGM

The carrier will also raise $968 million by selling stakes held in 10 port terminals to Terminal Link, a joint venture set up in 2013 and owned 51% by CMA CGM and 49% by China Merchants Port (CMP). Terminal Link currently holds stakes in 13 port terminals.

“Terminal Link will finance these acquisitions through a capital increase of $468 million subscribed by CMP and a loan by CMP that in eight years will be converted into a capital increase subscribed by CMA CGM,” reported the carrier.

“The transaction, which is subject to antitrust and other regulatory approvals, is expected to close in Spring 2020.”

Logistics profits forecast pushed back

CMA CGM has now pushed back on its profitability hopes for its newly acquired logistics business which it values at $1.7 billion.

 “The Group confirms the profitability targets previously announced for CEVA Logistics but sets their effects to 2023/2024 due to the challenging environment in certain industrial sectors,” it reported.

“The Group remains firmly committed to returning CEVA Logistics to a sustainable and structural profitability, thanks to the wide variety of measures and investments undertaken since the acquisition closed.”

CEVA’s new Marseille-based operations centre is now, according to CMA CGM, enabling the Group to leverage the “disciplined management of its logistics operations and generate revenue synergies with the signing of several new contracts”.

It added, “However, CEVA Logistics’ exposure to the automotive and technologies industries is continuing to dampen demand in both the Freight and the Contract Logistics services segments.

“In addition, the significant investments made to transform CEVA Logistics are also weighing on margins in the short term.”

Volumes over profits?

In terms of its core container shipping business, CMA CGM appears to be placing more emphasis on volume growth than some of its rivals. In their respective third quarter reports, rival European carriers Maersk and Hapag-Lloyd both emphasized profitability over market share. Maersk’s third quarter results revealed that  volumes increased just 2.1% year-on-year, while Hapag Lloyd reported a slight contraction in volumes.

CMA CGM, by contrast, saw volumes increase 5.1% in the third quarter, aided by the acquisition of European short-sea operator Containerships.

“This growth comes primarily from the growth of the Group short sea business and a push to rebalance our trades to help reduce our operating expenditures,” said CMA CGM.

Despite the increase in volumes, the carrier cut its operating costs during the third quarter. “Ongoing deployment of the performance improvement plan delivered a further reduction in unit operating costs of $25 per twenty-foot equivalent unit (TEU), compared with the second quarter of 2019 and of $89 per TEU, compared to the third quarter of 2018,” it reported.

CMA CGM Group said that it would continue to pursue “actions to reinforce its operational efficiency and cost discipline in its shipping business.”

It added, “During the third quarter of 2019, the Group further enhanced its operating performance, led by its shipping activity.

“In particular, this reflected the optimized use of its state-of-the-art fleet and the ability to adapt its organization to market developments.”

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French freight matching startup Fretlink has introduced a new set of features to its Platform of Services. The features were developed based on the needs of carriers and are now accessible by Fretlink’s most active carrier partners across France. These services were built in partnership with equipment service provider TIP and UNION TANK Eckstein (UTA), a major provider of fuel and service cards in Europe. 

The Platform of Services was launched by Fretlink in April this year, and the newly unveiled features are among its most significant additions yet. “Our objective is to help carriers sustain, develop and grow their activities. To do that, we analyzed what processes were impacting their profit and loss, which led us to develop the right services and get commercial bargains that help lower operational costs,” said Pierre Roux, the chief communications officer at Fretlink. 

Unlike regular digital freight marketplaces, Fretlink believes the problem within the market is not technology but rather the lack of organization – leading the startup to look at aligning pricing, capacity and service within the market. Fretlink helps shippers triage these parameters and choose carriers that would be the best overall, and not just the least expensive. 

In this set of features release, Fretlink is partnering with UTA to provide carriers access to the largest low-cost multi-brand fuel station network in France, with attractive options like delayed payment and reduced fees. “The fuel card will allow our carriers to have slight discounts on their fuel at the gas station. And carriers can easily manage their whole fleet without drivers having to pay cash, as there’s delayed payment,” said Roux. 

Fuel is one of the biggest costs in operating a carrier, making the delayed payment option a lifeline to freight businesses. Fretlink’s premium carriers enjoy the option of gaining up to three months in fuel-related working capital, helping them push forward with hauling more loads rather than await shipper payment to fund their next assignment. 

As the UTA network grows within the other European markets, carriers will be able to push their boundaries even further within the continent without basing operations on their immediate fuel expenses. 

Fretlink’s association with TIP helps provide the startup’s premium partners with short-term trailer rental, along with privileged access to TIP’s secured parking spots around the region of Lille, France. Fretlink’s partners would also be provided with 24/7 roadside assistance anywhere across Europe by TIP services. 

“We’re really glad to accelerate our partnership with Fretlink through this Platform of Services, as being an everyday partner to carriers lies in TIP’s core DNA. With its comprehensive approach to carrier’s needs, Fretlink makes a clear positive contribution to their profitability that will definitely ensure their further sustainability and development,” said Bob Fast, CEO of TIP Trailer Services. 

This apart, the Fretlink-TIP partnership provides their carriers access to second-hand heavy goods vehicles in Europe, with every vehicle being thoroughly inspected – renovated if necessary – to meet TIP’s standards of quality and reliability. The idea here is to help local carriers choose models from a large pool of used trucks across various manufacturers’ brands. 

Freight forwarding major Kuehne + Nagel (K+N) has announced that it will acquire the overland and logistics activities of Dutch-based Rotra, a company with roughly 800 employees and annual revenue of over €100 million. K+N expects to leverage Rotra’s network to expand its footprint across road networks in all major markets within Europe. 

“Rotra is a leading and well-rooted player in the Netherlands and in Belgium – two of the centres of gravity for logistics in Europe,” said Stefan Paul, member of the management board of K+N, responsible for overland freight forwarding. 

“Their activities strategically complement K+N’s existing network all over Europe; to the benefit of our local and international customers who will have access to our expanded service portfolio in this region,” he continued. 

Though K+N provides logistics services spread across all modes of transport, the company has traditionally been primarily invested in maritime and air freight forwarding. However, the company is making great strides in the overland freight segment by the strategic acquisition of European overland logistics companies. 

In July this year, K+N acquired the Jöbstl Group, a mid-tier logistics company based out of Graz, Austria. A family-owned business, Jöbstl processes approximately 550,000 shipments every year and employs around 180 employees across Austria and Slovenia. 

Uwe Hott, senior vice president at K+N’s European overland operations, had commented that Jöbstl’s network would further strengthen its existing 130 overland branch offices spread throughout Europe. 

Just like Jöbstl, Rotra is a family-owned company that operates a fleet of over 200 trucks, providing logistics connectivity to customers predominantly concentrated in the Netherlands and Belgium. Though Rotra does operate across the sea freight and air freight segments, K+N is only acquiring its overland business. 

“After more than a century of growing our family business, the time has now come to offer our customers an even wider road network and a broader range of services. K+N, one of the leading logistics providers worldwide, is our partner of choice to enable further growth and at the same time offering our employees the best future development opportunities,” said Harm Roelofsen, the director and co-owner of Rotra.

As with the Jöbstl acquisition, K+N has not disclosed the price of the Rotra deal. For now, the acquisition is awaiting customary closing conditions like antitrust and merger clearance. 

In its third-quarter earnings report, K+N’s CEO Detlef Trefzger had mentioned that the company continued to deliver solid results in both sea freight and overland logistics, even against tense market conditions. He also stated that in the overland segment, the company’s intent was to continue improving its customer service, look at increasing cost efficiency and pursuing greater digitalisation. 

Continental AG, the German auto parts giant, has announced that it will phase out over 5,000 jobs across various production plants in Germany, the U.S. and Italy, citing several reasons including the industry’s accelerated transition to electric mobility and the profitability of autonomous and connected driving.

The organizational restructuring will affect manufacturing plants in Roding, Limbach-Oberfrohna and Babenhausen in Germany, Virginia in the U.S., and Pisa, Italy. Though the confirmation came on Nov. 20, the plans to close manufacturing plants – and therefore the employees at those facilities – had been discussed in its supervisory board meeting on Sept. 25. 

This apart, Continental’s supervisory board will convene again with the local works council in Rubí, Spain, to discuss the future prospects of the location’s manufacturing plant. The plant primarily produces analogy displays and controls, and currently employs 760 people.

Continental will shut down its business in hydraulic components for gasoline and diesel engines in the coming years, which is in line with its Transformation 2019-29 program that was established to bolster the company’s long-term prospects in the auto market. 

Though Germany has traditionally remained the epicentre of auto developments, the country’s legacy automakers and parts manufacturers like Continental, have been playing catch-up with consumer trends and cutting-edge technology that has been disrupting the industry over the last decade. 

Consumers are increasingly aware of the issues surrounding carbon emissions; this is a factor in the radically increased demand for electric vehicles. German automakers, busy building efficient and powerful combustion engines, were caught off guard at the mobility disruption and had to scuttle to stay relevant.   

For a parts manufacturer like Continental, this meant winding up the production of several legacy systems like display and control technologies and transferring research & development teams. In its statement, Continental said that this was “due to the industry’s abrupt switch from analog to digital technologies, as well as a rapidly deteriorating competitive situation and a corresponding sharp increase in cost pressure.”

The statement reinforces the German auto industry’s issue with trifling the electric vehicle segment and autonomous driving technology at its advent – inaction that resulted in the new-age mobility’s ground zero shifting to the U.S. and China. Until recently, German automakers largely believed that digitalization was a tool to make driving easier, rather than putting technology at the centre of mobility, as in the case of manufacturers across the U.S. and China. 

German auto manufacturers are now in a state of rapid reorientation that can throw the new mobility market wide open again. Elmar Degenhart, the CEO of Continental, has expressed hopes of making good progress with its new resolutions. 

“The Supervisory Board is supporting our urgently needed technological transition and thus the strengthening of our competitiveness and future viability. We are focusing on profitable growth areas, quickly and rigorously,” said Degenhart. “These include assisted, automated and connected driving; services for mobility customers; and the tire, industrial and end-customer businesses. The jobs of the future will evolve in these growth areas.”

In an effort to support the employees affected by the structural change, Continental is expanding its corporate-wide internal job market along with employee representatives. The company recently opened a technology and transformation institute that would retrain employees to improve their long-term career prospects and employment opportunities. 

“We have been holding intensive, constructive talks with employee representatives for some time. The crucial question now is: how can we implement the necessary measures responsibly and with foresight so that we can emerge stronger from the current reorganization. We will be supporting those employees affected as much as possible,” said Degenhart. 

DHL Express has opened a new logistics center in western Germany that will help meet the rising demand across Europe for express e-commerce shipments.

Located at Cologne-Bonn Airport, the 15,000-square meter (m²) hub features cutting edge sorting technology and entailed an investment by DHL of 123 million euros ($136 million).

“We expect continued growth in
the coming years, especially in cross-border e-commerce trade,” explained
Travis Cobb, DHL Express’ Executive Vice President of Global Network Operations.

In the hub’s sorting center, the
embrace of new technologies including 3D scanners and vacuum lifters enables
DHL Express to process up to 20,000 shipments per hour on its 2.5 kilometer
conveyor belt.

The Cologne hub also uses an innovative ice-energy-storage system to heat and cool the 12,000 m² warehouse and offices (3,000 m²). The system uses 1.3 million liters of storage capacity and 18 kilometers of piping to ensure the hub stays cool in the summer and warm in the winter.

Combined with a heat pump and solar panels on the roof, the new facility is entirely emissions-free, according to DHL.

“The €123 million investment in
our new hub clearly shows our commitment to the Cologne-Bonn region and ensures
the future of a lot of jobs here,” said Detlef Schmitz, Managing Director of
the DHL Express hub.

“With the new direct route
between Hong Kong and Cologne, 28 daily flight movements, and our use of
state-of-the-art technologies, we are proud to be contributing – sustainably –
to the worldwide growth of DHL Express,” said Schmitz.

The Cologne hub opening continues DHL’s aggressive expansion in Europe. As reported in FreightWaves yesterday (18 November), the Deutsche Post DHL Group (STOCK.DPSGY) has also now opened a new mega-sized parcel center in Germany as it continues to strengthen its network.

When it reaches full capacity next year, the Ruhr region facility will create some 600 jobs and offer sorting capacity of up to 50,000 shipments per hour.

“The Bochum parcel center, along with the Obertshausen parcel
center near Frankfurt am Main, which opened in 2016, is the largest DHL parcel
center in Germany and also one of the most efficient parcel centers in all of
Europe,” said a DHL statement.

John Pearson, CEO of DHL Express, said the technologies deployed at the new hubs were indicative of the innovation that would be central to the company’s new ‘Strategy 2025.’

“We can only grow by ensuring top
quality, which is why we invest more than a billion euros each year in employee
training, infrastructure and digitalization,” he added.

“The main goal here is to increase our transport and delivery capacity for time-sensitive TDI (Time Definite International) shipments to meet the forever-growing customer demand in the area of e-commerce,” he said. “At the same time, we’re continuously improving on process efficiency.”

DHL Express now operates 23 hubs
across its express network, which also includes over 260 dedicated aircraft, 17
partner airlines, and a capacity for over 3,000 flights daily to over 500
airports.

In 2018, the company announced
its plans to add 14 new Boeing 777 aircraft to its own fleet.

“By modernizing our air fleet, we can increase the number of our intercontinental connections and do this with reduced carbon emissions and less fuel consumption,” said Cobb. “Next year we will deploy another six brand-new planes from our Boeing order.”

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