GERMANY\\\


Issue 6 2015 - Freight Business Journal


29 Crisis? What crisis?


Germany has shrugged off the recession that hit in the earlier years of this century. No signs of financial meltdown here.


Germany’s Greek paradox Food fuels Dachser growth


Logic would dictate that, whatever is bad for the Eurozone is bad for its largest member – Germany. But one of the stranger effects of the financial crisis in Europe is that, whenever the news from Greece looks particularly dire, the German government saves money – because investors seek safety in German bonds, which pushes down the


cost of borrowing.


One study – by the German IWH Institute - has found that the Greek debt crisis has saved Germany around €100bn (£70bn) since it started. IWH’s findings are echoed


by another German researcher, the Halle Institute for Economic Research, which says that the country had made interest savings of more than 3% of GDP between 2010 and 2015, much of it due to the Greek debt crisis. And that is even before


beginning to consider the heſty in surge in German exports because the value has been dragged down by the problems in Greece. Whatever the rights and wrongs


of all this (for instance, should German taxpayers complain too much about the cost of bailing out the Greeks?) the net result is a very robust economy, especially by the standards of the rest of the Eurozone at the moment. The


Economist Intelligence Unit, for example, forecasts growth of 1.8% in 2015, and that this will continue at an average of 1.7% in 2016-19. Germany is the world’s third


largest exporter, and the third largest importer, and before the recession bit earlier this century it was actually the largest exporter, from 2003 to 2008. In fact, this reliance on external trade gives rise to one of Germany’s few economic flies in the ointment – exposure to external demand and hence world events leaves it exposed to factors such as EU-Russia sanctions and general weakness in the other Eurozone economies, says the EIU. This factor was mentioned by a number of the freight operators that FBJ contacted and has led to at least some short-term weakness in the freight market. Unlike the UK, Germany still


makes tangible goods – and lots of them – which is of course good news for the freight industry. As far as the UK is concerned, though, it does mean a heſty imbalance in the two-way trade. One major trailer operator FBJ spoke to reckoned that


the volume of


UK-bound goods from Germany outweighs the trade in the opposite direction by around three to one – and that situation will remain as long as the Euro is weak and the


Pound is strong. When we think of German


industry, it’s generally in terms of massive firms like Volkswagen or Siemens, and indeed, 10% of the Fortune 500 list of the world’s biggest companies are German headquartered. Interestingly, though, the vast majority of German companies are small and medium-sized enterprises – the Mittelstand – which perhaps explains the predominance of groupage cargo, as well as the strong showing by the express parcels operators, many of whom have sited their main European hubs in the country. Something that is easily


forgotten today is that, prior to the fall of the Berlin Wall in 1990, Germany was two countries – West and East. Despite a quarter of a century of physical rebuilding, the psychological differences between the former capitalist West Germany and the Communist East Germany run deep. A massive rebuilding programme has disguised many of the physical differences in the once divided city of Berlin, but the scars of the East’s near economic meltdown still remain in other larger eastern cities, and the German taxpayer is still paying for the massive cost of reunification.


German freight operator Dachser is investing in a new European Food Shipment Hub with a total surface of 70,000sq m at Erlensee near Frankfurt. The new branch, which will start operations by the end of the year, will not only be an important hub in its own right, but also a core component of the European Food Network founded in 2013 by twelve partners. Elsewhere, Dachser is


constantly optimising its network and also adding cross dock and warehouse space when suitable. It will expand capacity at Öhringen (Baden-Wuerttemberg) with a new 16,000sq m warehouse offering 19,500 pallet spaces. On this side of the Channel, last


year Dachser UK opened its new Northampton logistics centre - a 5,950sq m transit terminal and a 10,560sq m warehouse with up to 20,000 racked pallet positions. Dachser UK continues


to operate daily services into Germany directly from Northampton, Rochdale and Dartford, with


direct lines to


key locations such as Alsdorf (Aachen), Dortmund, Rheine (Osnabrueck) and Karlsruhe, from where consignments are on-forwarded via the Dachser German network to the final destination.


Door to door transit times of 48


hours can be achieved to most parts of Germany. In addition, Dachser can


send consignments daily to its ‘Eurohub’ near Saarbrucken, which, as well as being a regional hub in its own right, is used as a transhipment point for destinations across the rest of Europe, complementing the increasing number of direct services. Dachser UK is seeing a general


year on year increase of around 6% on exports to Germany and 15% on imports. The increase in exports might have been expected to be larger, but the strength of the Pound against the


Euro this year has affected UK competitiveness. As in many other parts of


Europe, e-fulfilment is growing in importance. Customers are increasingly


segregating product between ‘standard’ and ‘e-com’ designation and Dachser can pick up general pallets for delivery to distribution centres or stores, at the same time as consolidated pallets of parcels comprising internet orders. These parcels are very oſten delivered to a separate customer- nominated delivery point such as a fulfilment centre and /or parcel carrier depot, where break-bulk occurs and home deliveries are organised.


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