Following the gold rush for logistics players during Covid-19, their current situation is rather dire, as shown by declining ocean freight tariffs and air freight carriers offering the market bizarre prices on eastbound routes from Europe to the Far East just to secure some volume.
Reason enough to speak with one of the most experienced logistics companies and one that has weathered many economic storms: Savino Del Bene, established back in 1899. CargoForwarder Global (CFG) asked its Managing Director Germany, Andreas Kujawski (AK), about the industry situation and to specify his company’s plans to develop Frankfurt (FRA) as gateway for air freight traffic to and from Central and Western Europe.
AK: Air freight has been a significant contributor to our success in Europe and is a key factor for our global services. That said, consolidating shipments at FRA is a logical consequence of our volume growth in both exports and imports. We have already established gateway operations in Italy and other southern European countries. Hence FRA follows suit.
CFG: Wouldn't you achieve higher margins by liaising with other forwarding agents to consolidate shipments on certain routes? As is done by IGLU Air Cargo which bundles the volumes on certain trade lanes, that have been contributed by 25 mid-sized and small forwarding agents. Is this also an option for Savino Del Bene?
AK: We are open to every cooperation on all continents. IGLU in Germany is a buying cooperation of small and medium sized freight forwarders. With our circa 83,000,000 kg CW globally, we already have solid buying power, and have very close cooperations within carriers serving the German market.
CFG: Generally speaking, how has the economic downturn affected your company’s business so far?
AK: Overall, Savino Del Bene’s ocean and air freight business was very stable in the first half of this year, despite the global downturn and challenging market environments. On some trade lanes, our business even significantly increased while some others were hit by the decline of industrial production. In Germany, we achieved a 25% volume growth in sea freight from 01JAN23 to 30JUN23, year-on-year. So, positively speaking, we developed against the general market trend. In air freight, the result is a bit different because sales figures equaled those of the first half year of 2022. However, given the current rather difficult market environment, we consider this as a success.
In general, we managed to maintain our strong market position.
Traditionally, our financial figures are confidential, so we will not disclose any results here.
CFG: From day one, Savino Del Bene concentrated on transports between Europe and North America, including Mexico. Despite the pandemic and the current economic hiccups, your company has managed to constantly gain new customers in both markets as well as maintain existing ones. What’s the recipe for your success?
AK.: The secret behind this stable success is simply our ‘quality of operations’, but also for sure our brand image as the number one, privately owned freight forwarder focusing its activities on several vertical markets. Our main advantage is our strong network in Europe and the U.S., combined with structures that have grown over decades.
The message delivered by freight forwarding is really simple: You cannot swim against the tide but have to be flexible and adapt rapidly to changing market situations. At the end of the day, it is not so much the price level which determines success or failure, but the ability of a logistics company to permanently offer operational excellence. This is key, and goes hand in hand with the motivation of our people in Europe, the Americas, Far East, or elsewhere to deliver a state-of-the-art product to our customers: day in, day out.
CFG: Savino Del Bene seems to favor acquisitions instead of growing organically. Can you confirm this impression?
AK: Savino Del Bene grows both organically and through mergers and acquisitions. In Germany, our organic growth resulted in an increase of 80% in sea freight sales since 2020, which we think is a remarkable success. Just recently, our sister organization, Savino Del Bene Poland, was awarded the Forbes Diamond Award for ‘continued rapid growth, excellence, and transparency’ in Warsaw. Nevertheless, acquisitions are part of Savino Del Bene’s genes and have become an important source of growth. Prior to an investment, our management checks very thoroughly if a candidate fits our organization and will contribute to its success. Such as in the case of Dissaco A/L in Belgium, Reachlog A/B in Sweden, Advanced AirSea s.r.o. in the Czech Republic and Slovakia, and Bortesi in Spain and Italy, to mention the last M&A activities in Europe. Despite these acquisitions, it goes without saying that we always welcome fair competition in the market.
CFG: Recently, digital freight forwarders have entered the transport arena. But most of the new stars burned out after a short time. What has caused their failure?
AK: Key in our industry of international freight forwarding in air- and sea freight, is the symbiosis of digitalization and human activities. Logistics is and will remain a peoples’ business. Worldwide, international freight forwarding is mainly performed by people who feel part of the global supply chain. They sit in the driver’s seat, not computers or robots. Most of the start-ups that intended to run their forwarding business exclusively data-driven, learned their lesson meanwhile and changed their practices. The ones that didn’t, disappeared. Savino Del Bene’s credo is that ‘every shipment has a story to tell.’ And these stories are written or told by our people, not machines.
CFG: Mr. Kujawski, thank you for your time and the input.
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