Schenker is making the right move in the U.S.

Given the uncertain nature of the economy, coupled with lessons learned from DHL Express in the U.S. and how it was forced to exit the U.S. market not all that long ago, this seems like the right move by Schenker. After all, should things improve, it can always come back with dedicated air cargo service here in the U.S.

By ·

LM recently ran a story on how DB Schenker Logistics is making significant changes to its North American business model.

In short, the company said it is transitioning from operating its own dedicated air fleet to a non-fixed asset model and focus on a smaller number of customers who require North American domestic transportation management services. Schenker added that it will continue to provide shippers in North America with international ocean, air, contract logistics, and warehousing operations and services.

In a company-issued statement, Heiner Murmann, CEO of Schenker Inc explained that as a result of the prolonged recession and spiking fuel prices, more of its customers are opting for expedited ground-based solutions instead of domestic air freight and are looking for partners who can provide transportation management services rather than transactional transportation.

Given the uncertain nature of the economy, coupled with lessons learned from DHL Express in the U.S. and how it was forced to exit the U.S. market not all that long ago, this seems like the right move by Schenker. After all, should things improve, it can always come back with dedicated air cargo service here in the U.S.

And since I filed that story a few days ago, I have since heard back from a Schenker spokesperson who explained to me in detail the rationale for this decision.

“Over the past 24 months, there have been several unprecedented events that have significantly changed the marketplace—a rapid and sustained rise in fuel prices, a global economic crisis, and a sluggish U.S. recovery,” she said. “These events have driven many of our customers to transition their airfreight requirements to expedited ground.  We have seen a corresponding decline in Domestic air business and growth in our expedited ground offering.  Our decision to restructure the way we provide our air services to a non-asset based model reflects the market direction and customer demand.  We have been actively taking measures to make our air business more viable over the last 24 months as the demand has shifted. The final decision to restructure was made within the last month.” 

With this announcement pertaining only to the North American Domestic dedicated air fleet, the spokesperson said that Schenker has thousands of customers in North America who utilize its International Air, Ocean, and Logistics services, which will not change.  But with respect to its North American Domestic Air/Ground product, she said the company is still working through which customers will find the new offering attractive.

Another difference, she explained, is that Schenker’s current offerings will be enhanced with transportation management technology to help shippers optimize their supply chains.

It looks like Schenker made the right decision at the right time. When it comes to asset-based models, it is fair to say even the most profitable and well-run companies are always thinking more than a few steps ahead to see what is coming next. And what Schenker is doing in this case is no exception.


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
The E-commerce Logistics Revolution
The technology and processes that are revolutionizing logistics and supply chain operations are helping today’s organizations keep pace with digital commerce.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
IAM, IoT and the Connected Supply Chain
There are three primary models of Identity and Access Management (IAM) technology that CTOs, CSOs, and Supply Chain executives are using to enhance their trading partner communities. While each leverages IAM and the IoT as core components only an “Outside-in” approach truly connects people, systems and things reliably and securely across the supply chain.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...