It is a rather quiet development that went on without much pomp and noise. Not very long ago, the network of the North Rhine-Westphalia, Germany-based company was still very fragmented. Today Rhenus runs offices on all continents. Drivers of the expansion were and still are the logistics service provider’s customers.
Want an example? Here it comes: Cargo flights between Miami International and Cabo Frio Airport (CFB), located two driving hours northeast of Rio de Janeiro, Brazil. “A customer knocked at
our door asking for dedicated air transports on this sector,” recalls Tobias Bartz, CEO Air & Ocean at Rhenus Logistics. Therefore, his company’s Florida team arranged for charter
flights and customs clearance at CFB and contracted a local agent for further distribution of the imports across the region.
Next, other U.S. clients became aware of Rhenus’ new product and jumped on the bandwagon, upping the flights and the volumes transported on this route. “Freighter flights between MIA and CFB, driven by customer demand, have become a unique selling point,” illustrates Mr Bartz.
Rhenus’ drivers are the customers
Similarly, cargo trains running from the Far East to Europe across the vast Eurasian land bridge were originally also put on track because of customer demand. Meanwhile, they have become part of Rhenus’ product portfolio attracting additional shippers, triggering further demand. It might be compared with a snowball that has grown to considerable dimensions over the past years and keeps on growing month after month. In the case of high valued products, security personnel accompany the shipments on their transcontinental journey from door to door.
Strategy of two-pronged growth
Although organic growth comes first, the executive is fair enough to admit that acquisitions of local forwarding agents doing business in markets so far underserved by Rhenus is part of his company’s expansion strategy. An illustrative example is the purchase of Johannesburg, South Africa-based World Net Logistics (Pty) Ltd. that was finalized last March. A move that enlarged the agent’s reach substantially since in addition to South Africa, World Net Logistics runs offices in Namibia, Singapore, Thailand, Malaysia, China, and Hong Kong.
A comparable decision was the acquisition of Miami, Florida-headquartered agent Freight Logistics. “Since they have own representations in Colombia, Brazil, Chile, and Argentina we were able to significantly strengthen our business and network in South America,” the manager says.
Trucking network across Southeast Asia
South Africa and Namibia were the initial step to further penetrating the African sub-markets. “Particularly in sub-Sahara we see enormous potential in the coming years, so we want more than just having a foot in the door.”
In the USA, Rhenus intends to tighten its existing network by establishing new stations in Atlanta and Los Angeles. The same goes for Latin America where an office will be opened soon located in the direct vicinity of Rio de Janeiro’s Galeao International.
In addition to global air and ocean services, the agent has set up a trucking network in Southeast Asia, stretching from China to Singapore or Thailand, based on data flows via smartphone. “To push this particular product up front, we are currently investing a lot of money, since intra-Asian transports are growing rapidly, led by high tech products dispatched by local producers and addressed to consignees making business in that region,” explains Mr Bartz.
People are the real value
The expansion strategy goes hand in hand with a smart staffing policy seen in the case of World Net Logistics, for instance. “From day one we not only assured their employees that their jobs were safe but that our credo is to keep as much local and regional market knowledge as possible within the Rhenus Group this way motivating them to stay on board, enabling us to benefit from the wealth of experience gained in their professional lives.” In the case of the South African agent this appeal has paid off since all 650 employees stand now on Rhenus’ payroll.
At present, 31,000 employees are working for the Rhenus Group at 660 different business sites worldwide, generating an annual turnover of 5.1 billion euros (2018). of which 5,600 belong to the Air and Ocean divisions. Other activities include multimodal transport operations, warehousing, customs clearance as well as value-added services.
RHEGREEN reduces CO2 emissions
Also, ecological issues stand high on the company’s agenda. Last April, they kicked off RHEGREEN, the world's first carbon dioxide reduction program in the air freight sector. It is a free of charge service enabling customers to choose the most environmentally friendly way of transporting their goods by air.
Rolled out originally on the route Amsterdam-Shanghai, it is meanwhile available throughout the entire Rhenus air network. When newly introduced, the RHEGREEN bookings were quite limited. But they have picked up lately, the manager tells.