While 2017 was a strong year for Dachser Asia Pacific and was the first year in which revenue exceeded €400 million (US$456 million), the company is still focusing its efforts on reorganizing its infrastructure so it can become more efficient and productive.

“We are now in a period of transformation where we are basically positioning ourselves to move from a medium-to-large freight forwarder to a large one,” said Edoardo Podestá, managing director of air and sea logistics in Asia Pacific at Dachser, in an interview during the transport logistic China 2018 conference and exhibition in Shanghai. “This means upgrading and expanding our offices, hiring more qualified people, training our staff and implementing our new internal systems. So we’re investing a lot of money in a bit of a silent way because we’re currently not in a period of acquisition. This is taking a lot of energy and time, so it was very rewarding that we were still able to post such strong growth.”

One of the key aspects of the project is the rollout of a new internal IT infrastructure, covering everything from emails to transport management to accounting.

“We’ll be able to offer additional things to customers like track and trace, EDI connections and integration with our warehouse and transport management system,” Podestá said. “So far, we’ve already done Hong Kong and southern China, as well as Korea, Malaysia and Singapore.”

Dachser has started with the first few offices in northern China and plans to have completed the whole region by the end of the year.

“China is doing much better and we were up about 20% in the first quarter compared to last year,” said Yves Larquemin, managing director of air and sea logistics in North China. “I’ve worked in China for more than 15 years now. Compared to back then, China is a totally different market and the challenge is to manage the growth, which is a good problem to have.”

According to Podestá, the company will move on to rolling out the new system in India in 2019, leaving just a few smaller, more manageable countries after that. He said that North China and India are both home to some of the best colleagues in the whole organization in Asia, but India presents a different set of challenges from China, particularly in light of the new Goods and Service Tax Act which came into effect in July 2017.

“In China and particularly Shanghai, the challenge is the size of our operation because our biggest business is there and it’s purely a numbers game in terms of getting everybody trained and making sure we have enough resources to handle it,” he said. “The Indians are very good with processes but the issue there is that we have more than 20 offices and we have to get the accounting system fully compliant and close all the potential loopholes in terms of the GST and VAT.”

Dachser Asia Pacific has been more focused on structuring its network rather than expanding it for the last couple of years and will continue to do so until the end of 2019. Only then will the company consider adding more countries and integrating them into the network, a relatively easy affair once everything is unified onto a common platform.

“At the moment, it’s clear that there are challenges but we’re still in an upswing while at the same time generating synergies,” said Podestá. “We grew by opening offices and by acquisitions and joint ventures, which has brought us a bit of a scattered result. For the first few years, we did not look at that in detail because the first phase was geographical and quantitative expansion. Then we decided to stop that kind of expansion because we realized that when taking over local management you really need some kind of glue to make everything come together and add to your network.”

There are still a few countries in the region that Dachser hopes to put on its map, including Australia, New Zealand, the Philippines and Japan.

“For legacy and political reasons, we’ve not grown into Japan yet because of a joint venture in Germany we have with a large Japanese company called NNR Global Logistics,” Podestá said. “We’ve had a strong relationship with NNR for more than 20 years. I think we will enter that market one day, but not in the next two or three years.”

Against all the digital enhancements in the pipeline, Podestá stressed that, when it comes to logistics, there is no hiding the fact that the industry still relies on physical connections.

“People might be mesmerized by a magical app which helps you book a shipment, but behind that there are trucks, ships, terminals, warehouses, etc.,” he said. “Digitalization will help us to do our job better, for sure. But I have a feeling that the hype is getting to a point where visibility about the basics is being lost somewhat. Until we no longer need to rely on physical networks, we will need to give, as an industry, more attention to logistics operators – people who are doing the daily work and have maybe been flying under the radar a bit.”

For Podestá, finding ways to attract young talent to the seemingly unglamorous logistics industry is a very real challenge. This applies across the board, but is especially true for front-line positions.

“You can have the best brains and the best app in the world, but that’s no use if the truck driver or the delivery man doesn’t show up or doesn’t get paid enough,” he said. “So these people need to be well paid and to know that they can have a carrier outside delivering and dispatching, because nobody wants to be a trucker for life. We need to start taking care of these people differently.”

This is something which Dachser is looking into, given the crunch in truck drivers the company experienced last year. Dachser recognized that it had taken these jobs for granted and today is treating these positions as talent to try to lower employee turnover.

“Overall, I think there are great opportunities ahead because doors that were locked or didn’t exist are being opened,” said Podestá. “But this means that we are being challenged to do things in a completely different way, and those who don’t adapt fast enough will be left behind.”

By Jeffrey Lee

Asia Cargo News | Shanghai