Report suggests DB Schenker may leave U.S. market

The report stated that Deutsche Bahn management is considering restructuring Schenker’s U.S. business but added a withdrawal is more possible. And it added that Schenker management was due to deliver a business update by mid July and Deutsche Bahn executives plan to take a decision on the future of its U.S. business by the end of the year, possibly as early as August.

By ·

Reports out of Europe are indicating that Deutsche Bahn is contemplating shuttering its United States-based DB Schenker Logistics business, a third-party logistics and trucking and airfreight services provider.

This was initially reported in the Financial Times Deutschland. The report stated that Deutsche Bahn management is considering restructuring Schenker’s U.S. business but added a withdrawal is more possible. And it added that Schenker management was due to deliver a business update by mid July and Deutsche Bahn executives plan to take a decision on the future of its U.S. business by the end of the year, possibly as early as August.

A Transport Intelligence report said that unnamed sources within the company suggested that part or whole of its U.S. business could be closed or sold-off. This appeared to concern the domestic land and air freight business of the former Bax Global in 2006. TI added that documents which Financial Times Deutschland had claimed to have seen described a strategic review of the business carried out by an investment bank on behalf of DB Schenker which described the US business as too small and lacking in “pricing power”.

DB Schenker officials did not reply to queries from LM at press time.

But the company did issue a statement, indicating that it is not leaving the U.S. and will continue to be a significant logistics player throughout all of the Americas, including the United States.

Company officials pointed out that DB Schenker’s rankings in the U.S.-based international air and ocean freight operation are second and fourth, respectively, in the U.S. market, and its contract logistics and supply chain management business is fifth. The company’s North American domestic operation is made up of a dedicated airplane network and a dense trucking network, handling 2,000 departures per day, with growth occurring at a double-digit pace, the company said.

Schenker added that its domestic air fleet, which represents ten percent of its U.S. business, has been hampered by the recession and increasing fuel costs. 

“We have, and continue to work on adapting the aircraft network to the market conditions,” says Heiner Murmann, CEO and President of Schenker Inc., in a statement. “In addition to the reduction of aircraft from 40 to the current 20 over the past several years, we are exploring ways to additionally adapt this part of the business to further address the market realities while continuing to serve our customers. We have a number of alternatives available including improving and restructuring the operation and/or partnering with other providers. We are currently studying the best option and will define the optimal path forward in the next two months.”

An industry source that declined to be identified told LM that the BAX purchase “has always been problematic for DB and they might give up [in the U.S. air freight business].”  The source added that Deutsche Bank has been bothered by defections and Joey Carnes, former advisor to the Board at Schenker Deutschland AG
and former BAX president and CEO, who now serves as chairman and CEO of MIQ Logistics, is now directly competing against Schenker and has “also raided DB Logistics ranks.”


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Managing Global Transportation: How NVOCCs can operate more profitably
Global transportation isn’t getting any easier to manage. With new rules and regulations to learn, new compliance requirements to adhere to, and new customers and business partners to onboard, navigating the complexities of the global market can be difficult for any company. To fully leverage their global supply chains, firms need a robust, global transportation management system that helps them navigate this ever-changing environment.
Download Today!
From the July 2016 Issue
While it’s currently a shippers market, the authors of this year’s report contend that we’ve entered a “period of transition” that will usher in a realignment of capacity, lower inventories, economic growth and “moderately higher” rates. It’s time to tighten the ties that bind.
2016 State of Logistics: Third-party logistics
2016 State of Logistics: Ocean freight
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo