Dachser eyes acquisitions
15 / 08 / 2023
Burkhard Eling, Dachser
Acquisitions are on the growth agenda for German logistics company Dachser.
Chief executive Burkhard Eling said the company is “definitely looking for some targets” across its Air & Sea Logistics (ASL) division.
However, while in its Road Logistics (RL) business Dachser has traditionally waited for opportunities to acquire partners it is already working with, the company plans to accelerate ASL growth by actively looking for opportunities.
“We are definitely looking for some targets, mainly where the setup today is not either at the size we would like, or where we are not present at all.”
Speaking about the acquisition of New Zealand-based freight forwarder ACA International in March, Eling said it was an example of how Dachser is moving into new areas without any existing setup through partners.
The purchase extended the company’s air and sea freight network to Australia and New Zealand, with seven additional locations.
Then in May, Dachser signed a deal with Japanese logistics company Nishi-Nippon Railroad Co to form a joint venture in Japan, with a plan for Dachser Japan K.K. to open its first office in Tokyo at the end of this year.
The Japanese location will offer air and sea transport and will be connected to Dachser’s close-knit overland transport network in Europe, said Dachser at the time.
There were some significant acquisitions last year too.
In December, the company acquired the remaining 50% of the shares in its Hungarian joint ventures “Liegl & Dachser Szállítmányozási és Logisztikai Kft.” (transport and storage of industrial goods and food products) and “Liegl & Dachser ASL Hungary Kft.” (air and sea freight).
Two months prior to that, the business acquired a majority share in fellow German logistics software provider kasasi GmbH to strengthen its digital expertise in “telematics, connectivity, artificial intelligence (AI), and the Internet of Things (IoT)”.
Looking to the future, Dachser plans to mainly focus on expanding business in geographical areas where it is already set up
Eling says: “This is definitely something we want to grow over years over the years to come.”
But the company will also consider venturing into new territory.
“There are still some countries, we are not present today at all,” he adds.
Despite growth opportunities through acquisitions, the tough operating market this year will have an impact, expects Eling.
Looking at the performance of the business this year, he said a decline in volumes is inevitable for the ASL division this year, following a strong 2021 and 2022.
However, he adds: “We did not expect such a rapid deterioration of our carrier rates, which, of course is a big part of our overall volume.”
“We are forecasting a level of roughly minus 10% in volume. But the deterioration of the carrier rates will impact revenues,” he stresses.
Among other things, airfreight charters helped Dachser record a 78.3% jump in revenues at its ASL unit to just over €2bn in 2021.
Then in 2022, Dachser’s ASL division recorded a 16.7% increase in revenue in 2022 (€2.4bn) over the previous year (€2.1bn).
But business growth slowed year on year for the division due to increased capacity and disruption to business in China.
The logistics provider noted the number of shipments fell by a total of 7.3% for the year.
As part of business development plans, Dachser will continue with its airfreight charter network, launched in 2018 and built up to specific lanes towards Asia and the US.
In May 2022, the ASL unit extended its airfreight charter capacity on the route between Shanghai and Frankfurt up to April 2024.
And this January, the ASL business extended its charter activities between Hong Kong and Europe until March 2024.
Another focus area will be to develop end-to-end supply chain services.
Despite the current challenging market conditions, Dachser aims to maintain independence within the market.
Eling reflects: “It has been a very long-term strategy to be more independent of the larger carriers with own-network charter operations.”
He adds that despite the post-Covid market, “it’s important to maintain the ability to operate own lines and charter business”.
He explains: “This is due to the fact that we want to develop what we call a global groupage – linking the US, Asia and Europe. For that, of course, you need to really provide standard lines on a regular basis to be a reliable partner for customers.
“The plan is to combine our very strong and well set up road network in Europe, with the air and sea activities, and rail activities outside Europe.”
The goal is to get each business segment better connected from a pure shipment point of view, but also from a digital point of view.”