Subscribe to our free, weekly email newsletter!


Report suggests DB Schenker may leave U.S. market

By Jeff Berman, Group News Editor
June 27, 2011

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 headshot
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. .(JavaScript must be enabled to view this email address).


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!

Recent Entries

A recent Wall Street Journal report stated that third-party logistics and freight transportation services provider XPO Logistics shut down seven freight terminals that were part of the Con-way Inc. less-than-truckload (LTL) network, Con-way Freight. Con-way was acquired by XPO for $3 billion last year.

Many transportation/logistic organizations are applying a new wave of robotic process automation (RPA), a “no coding” approach that integrates and automates data-driven activities.

Logistics Management Group News Editor recently caught up with Frank Guenzerodt, president and CEO of Dachser USA, the American arm of global 3PL Dachser, about the company's ongoing expansion efforts into the U.S.

In an effort to help buyers of freight transportation and logistics services to better understand the required best practices in order to be a shipper of choice for their carrier partners, non asset-based third-party logistics (3PL) services provider Transplace said this week it has rolled out a Preferred Shipper Checklist.

For a new facility in Chicago, DHL Global Forwarding converted to electric lift trucks. The result? Better uptime and a cleaner environment.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA