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Issue 6 2017 - Freight Business Journal


///GERMANY


The Phoenix of Europe European powerhouse powers on


For much of the 19th Century Germany was considered an economic basket-case, and also in the years following World War 1. Once again, by 1945 the country was reduced to ruins, only to rise from the ashes. It’s all very hard to believe now.


Social Democrat rivals. That said, Germany has


Germany’s economy continued to power ahead in 2017, with growth of 0.6% between January and March – faster than the 0.4% growth seen in the last quarter of 2016.


Exports, construction


investment and consumer spending were all up, while employment levels reached record highs. Even the huge numbers of


migrants that have arrived in Germany from Syria and other troubled parts of the world could be seen as a boost to the economy


– it is said to be a factor in rising investment by the German state, which has had to find houses, schools and other facilities for them. Moreover, German economic


growth appears to be broadly- based. Focus Economics also says that


Germany’s economic momentum - leading indicators reached multi- year highs in the second quarter of the year - has boosted business confidence. Trade and the external sector remain the country’s


engine of growth, but domestic demand is also expected to have strengthened in the second half of the year, which could be good news for UK exporters seeking to increase their exports to Germany – particularly as the Brexit vote has weakened the Pound, making UK goods and services more attractive to German buyers. The state of the economy is


heartening for Chancellor Angela Merkel, going into the national elections in September seeking a fourth term in office for her conservative coalition over her


massive unmet needs in many areas such as health care, education, and communication and transportation infrastructure, according to US of California professor of economics, Barry Eichengreen. Writing in the Guardian in May this year, he says that increasing spending at home could reduce the country’s massive current account surplus, and mollify some of the country’s critics, including President Trump in the US. It might even create new


opportunities for exporters in other countries, including the UK.


Good growth for DSV


Germany continues to be an important and busy market for DSV, where it has seen a 12% growth in the market since 2016, says the forwarder’s general manager for the country, John Hills. DSV has been operating daily


services to the main distribution areas in Germany and has recently extended this further by launching a new route to Lahr, close to the German-French border and is well placed to service the entire region,


including Eastern France. Some 60 driver-accompanied


trucks operate between the UK and Germany every day. DSV also operates a two-


manned service to offer faster transit times as well as a higher level of protection and security. John Hills adds: “At DSV, we’re


continuously looking at solutions to offer our customers a full range of reliable, quick and cost effective services that meet their ever- changing needs.”


Dachser is ship-shape in Bristol


The opening of a new branch has added a further dimension to German-owned Dachser’s services to and from the UK. The company opened a small operation in Bristol last September, and this has allowed direct services to start between there and the hubs at Alsdorf (near Aachen) and Dortmund, says UK managing director, Nick Lowe. “That has helped shave 24


hours by allowing services to go direct from Bristol to Germany,” he explains. As well as serving those regions


direct, the two German locations act as hubs for the rest of the country, allowing virtually the whole of Germany to be reached in


West, which has allowed it to get the new site running quickly. As well as Bristol itself, the location is also a


in time, says Nick Lowe – perhaps in the North-East of England or Scotland – but, as he points out,


a further 24 hours. They also act as transfer points for other European destinations such as Benelux and Scandinavia. Dachser is using the premises of its transport partner in the South-


strategic hub for South Wales and south-west England. Opening a fourth UK hub also


takes pressure off the other three UK locations. Further UK hubs may follow


Dachser is already a member of the Palletline network, which allows consignments to be forwarded to or from all parts of the country within 24 hours. That said, establishing an owned


operational presence in a new part of the country could also give Dachser a commercial presence there too and this aspect also needs to be considered. Germany is naturally an


important market for Dachser’s UK business as a whole, which also operates from hubs at Dartford near London, Northampton and Rochdale near Manchester. As might be expected for a German- owned company, Germany accounts for at least a fiſth of total volume. The German market has been growing very strongly, says Lowe,


Property market gains strength through stability


New York-based real estate investment fund manager Gramercy has become increasingly active in Europe, particularly Germany, and is now working on its next major fund, says senior director, Gregory Vinson. “Germany accounts for 50%


of our portfolio in Europe – it’s the growth engine of Europe, and the economy has driven he demand,” Vinson explains. The country is enjoying a period


of economic and political stability and even issues like the Euro and Greek debt no longer seem to be the existential threat that they once were. As well as strong and consistent


growth, what also sets Germany apart from markets like France or the UK is that there is no single dominant metropolitan area. “It’s a multi-polar market and we see a similar distribution in logistics.” There are some big cities,


including Hamburg, Frankfurt, Munich and Berlin but, as Vinson points out, even the top five metropolitan areas only accounted for 30% of all take-up in 2016. “It’s a relatively homogenous country, with a dispersed population and excellent transport infrastructure. You can deliver from a whole variety of locations and, while you do need access to roads and other transport links, the excellent infrastructure does take away some of the need to be right next to metropolitan areas.” Nevertheless, property


inventories remain very tight, with only a 6% vacancy rate, “and a lot of


with UK to Germany up 15% in the first six months of this year compared with the same period in 2016, although imports – perhaps blunted somewhat by the weak Pound – have been growing somewhat less strongly, at around 7-8%, says Lowe. While many of the German


imports could be described as high tech or fast moving consumer goods, they are still price-sensitive and any shiſt in currencies could


that is old; tenants want to move to larger, higher, more energy efficient developments.” There is, Vinson says,


“a tremendous amount of development going on, but it’s still not enough to meet the market’s needs.” One factor that has changed the


dynamics of the German property market slightly is e-commerce – the country is only just behind the UK in its adoption of online retailing, with the likes of Amazon building huge distribution centres around the country. Whereas a traditional DC might have employed only a few people, an e-commerce centre could have hundreds of people and that means that sites need either extensive car parking, be close to a metropolitan area or have good public transport. E-commerce sites tend to be


much more space-intensive – pro rata three times the size of a traditional DC, according to a Prologis study, says Vinson. Ease of acquiring land for


logistics developments varies for local authority area to area in Germany, he continues. “Some welcome new development, but oſten local people don’t look favourably on being over-run by logistics facilities, and there are concerns about truck traffic. Oſten, you reach a point where people say, enough is enough.” Logistics companies though


might be welcomed by some places because of the jobs they provide, particularly firms that are perceived as blue chip.


make it more attractive to source in the UK instead of Germany. Meanwhile in April, Dachser


bought 80% of its Irish partner, Johnston Logistics. Specialising in dangerous goods and warehousing services from three locations at Rathcoole near Dublin, Cork, and Limerick, the firm started working with Dachser in 2007, benefiting from daily departures on its European


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