Dachser GmbH & Co. KG

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Dachser GmbH & Co. KG

Memminger Str. 140
Kempten, D-87439
Germany
Telephone: (49 831) 5916-0
Fax: (49 831) 5916-199
Web site: http://www.Dachser.com

Private Company
Incorporated: 1949 as Thomas Dachser Spedition
Employees: 15,000 (2006)
Sales: EUR 3.1 billion ($3.9 billion) (2006)
NAIC: 541614 Process, Physical Distribution, and Logistics Consulting Services; 481112 Scheduled Freight Air Transportation; 483111 Deep Sea Freight Transportation

Dachser GmbH & Co. KG is Europe’s fourth largest freight forwarding company based in Kempten in southern Germany. The company’s 15,000 employees dispatch roughly 33 million shipments for over 20,000 customers, using Dachser’s sophisticated proprietary logistics, warehouse management, and financial management software developed in-house by some 240 information technology (IT) specialists. The lion’s share of Dachser’s sales is generated from cross-country shipping services via the company’s tight network of 294 branch offices.

Dachser owns only 10 percent of the total truck fleet it uses, but almost all of the containers in which the goods are shipped. The company has won a strong industrial customer base, primarily in the chemical, machine tool building, and electro technical industries, and provides contract logistics services to over 8,000 Do-It-Yourself Supermarkets in Germany and Europe. The company’s network of international branches spans 20 countries around the globe, including the United States, Brazil, Korea, China, and India. One-fifth of Dachser’s revenues are derived from its Air & Sea Freight activities. Dachser Food Logistics—the service that got the enterprise off the ground in the 1930s—still accounts for 14 percent of total sales. The company is owned by the two daughters and six grandchildren of Thomas Dachser, who founded the family business in 1930.

TRANSPORTING FOOD DURING TOUGH TIMES

When Thomas Dachser, the son of a farmer from the southern German Allgäu region, set up his freight forwarding business in 1930, Germany was experiencing the most severe economic crisis the country would undergo in the 20th century. Initiated by the New York Stock Exchange crash on October 29, 1929, the world’s industrial nations entered a decade of declining production and trade, financial crises and bankruptcies, rising unemployment and strife—with political unrest as the result. Unfazed by these global developments, Dachser and his wife Anni had a business idea they believed in and they made it work. Starting out with only one truck with a trailer and a strong determination to succeed, Dachser began hauling one of the region’s main products—Emmentaler cheese from the world famous green alpine pastures—to the Rhineland. On the return trips Dachser would bring machine tool parts and other commercial goods back to Kempten where his business was based.

While the German national railway was still the leading means of transportation for commercial goods, motorized vehicles were quickly gaining acceptance and market share. They offered major advantages over the railway. Goods could be forwarded to almost any location—not just to the nearest railway station. In addition, transportation by truck was more flexible in terms of time because there was no fixed schedule to adhere to. While Dachser brought in new business and made sure that things were running smoothly, his wife, the daughter of a bookkeeper, took care of the administrative side of the business. Within a decade Dachser had become the number one transportation business in the Allgäu region. By 1934 the business had grown so much that two new branches were established: one in the nearby city Memmingen and one in Neuss near Dusseldorf. Only four years later Dachser’s fleet had grown to 20 vehicles.

By the end of the 1930s, however, global events could no longer be ignored. With the beginning of World War II in September 1939, the Nazi government seized total control over the German economy in general and transportation, a crucial industry in times of war, in particular. Dachser’s trucks were confiscated and most of his staff inducted into the military. Dachser’s premises were almost completely destroyed during this devastating war. Fortunately, all of his family survived and so did their entrepreneurial drive. Once again, Dachser began hauling food, this time to feed starving urban populations in the wake of the war—not an easy task at a time when many roads and bridges were destroyed, city streets were cluttered with rubbish, and gasoline was one of the most precious commodities besides food. As the postwar period drew to a close, the introduction of the Deutschmark in West Germany opened up a new chapter of prosperity for the country and for Dachser. By 1948 the company had more than 100 people on its payroll. In 1949 the business was incorporated as Thomas Dachser Spedition.

KNITTING TIGHT NETWORKS, INNOVATING FREIGHT FORWARDING

The 1950s ushered in the postwar “Economic Miracle” in West Germany. After factories and infrastructure had been rebuilt, tons and tons of goods had to be shipped across the country and Thomas Dachser’s trucking company got a good share of the booming business. Early on, the company founder acted on his belief that a tightly knit network of transport systems, including branch offices and affiliates that spanned the whole country, was the path to long term success. One of the first Dachser offices established after the war was the branch near Ulm, about 40 miles north of the Kempten headquarters. Four Dachser employees started out in 1951 on the premises of a former sausage factory and successfully competed against other local truck companies. One year later a Dachser branch opened in Berlin. However, after the erection of the Berlin Wall in 1961, which divided the city into East and West Berlin, the western part was completely cut off from the rest of West Germany. Although there was some road transport between West Germany and West Berlin, this part of the trucking business was crippled by the enormous amount of red tape involved in cross-border business transactions between East and West Germany. By and by, new Dachser offices opened in other West German cities.

COMPANY PERSPECTIVES

Destination Future. The name DACHSER stands for reliability and quality. The company is, and always has been, driven by traditional values and innovative energy. The motors that power us are efficiency and longevity.

At the same time it became clear that, in order to offer its growing customer base comprehensive and costefficient services, the company had to offer air freight and deep-sea shipping as well. Dachser’s air freight business began to soar after the company was licensed by the International Air Transport Association in 1951. In the same year Dachser was the first air freight forwarding company to open a branch office at Munich’s Riem airport. An air freight forwarding contract with the newly established Lufthansa airline signed in 1955 put a solid foundation under Dachser’s fast growing business. Another strategic alliance was Kombiverkehr KG, an association of freight forwarders and the West German railroad Deutsche Bahn designed to intelligently link road and rail transport systems. By the end of the decade, the company had grown to a considerable size with roughly 1,100 workers on the payroll generating DEM 70 million in revenues.

The 1960s saw the introduction of two major innovations. Anticipating market trends, Dachser launched the so-called Garantieverkehr, a service package that guaranteed customers a predetermined time in which their freight would arrive at its destination. If a shipment arrived later, customers were entitled to get their money back. The second innovation was the swap body container, a container that could be detached from the truck that carried it and moved to another without having to load or unload the freight. What seems ordinary today was revolutionary in the late 1960s when chassis and the freight trailer area were attached to each other and transported goods were covered by a large canvas tarp. Initiated by the husband of Thomas Dachser’s younger daughter Annemarie, Thomas Simon, who joined the family business in the 1960s, swap body containers replaced the old equipment within three years’ time. Not only did they significantly cut cargo handling time, they paved the way for today’s complex globe-spanning freight forwarding systems.

Throughout the 1950s, 1960s, and 1970s Dachser’s network idea was expanded beyond Germany’s borders into Western Europe and the United States. New branch offices opened in the United Kingdom, Austria, Benelux, and Switzerland. In 1970 a Dachser branch office opened in New York City.

GENERATION CHANGE AND SHAREHOLDER CONTRACT

The death of Thomas Dachser in 1979 was a major turning point in the firm’s history. The business was inherited by his two daughters Christa and Annemarie. Christa Dachser had worked at the family enterprise for a number of years after studying business administration, but then left to become a psychology professor. After her father’s death, Annemarie Dachser’s husband Thomas Simon remained the only family member involved in the day-to-day running of the business, while Christa Dachser retained an active role in strategic decision making. Ulrich Weiss, a close friend of the family who had worked for Dachser since 1948 and became part of the executive management team in 1967, took over as the company’s new CEO.

In order to fulfill the company founder’s wish to secure the long-term prospects of his life’s work, a shareholder agreement was put together which was binding for all family members. Sealed in 1986, the agreement established the principle that company interests would take precedence over family interests; that shares in the company could only be sold to other family members; that each family branch could send only one representative to Dachser’s top management; that this member had to be approved by an administrative board headed by a nonfamily member; and, that most of the profits had to be reinvested in the business. Equipped with such precise general guidelines, Thomas Simon together with an experienced team of managers from outside the family steered the company through the next decades, which brought in their tow an amazing mix of new challenges and opportunities.

KEY DATES

1930:: Thomas Dachser sets up a freight forwarding business in Kempten.
1949:: Thomas Dachser Spedition is incorporated.
1951:: Dachser receives a license for international air transport and opens a branch office at the Munich airport.
1967:: A service that guarantees customers predetermined arrival times is launched.
1970:: The first sales office in North America opens in New York.
1971:: Dachser’s whole truck fleet is equipped with swap body containers.
1980:: The company begins to develop proprietary logistics software in-house.
1982:: Dachser starts offering refrigerated trucking services for perishable goods.
1986:: Thomas Dachser’s heirs sign a shareholder agreement to secure the company’s long-term future.
1993:: Dachser receives the European Transport Award for the company’s IT systems.
1998:: The company forms an air cargo alliance with four other forwarders.
1999:: French freight forwarder Graveleau is acquired.
2001:: The family shareholder agreement is extended until 2030.
2005:: Bernhard Simon becomes spokesman of Dachser’s executive management board.

REFRIGERATED FOOD TRANSPORT, CONTRACT LOGISTICS, AND IT INNOVATIONS

In the early 1980s the volume of food transports in general and perishable produce in particular grew significantly. Dachser responded to this market demand and invested heavily in refrigerated vehicles, swap body containers, and chambers for loading and unloading dairy products, meat, and the like. In May 1982 the company launched its refrigerated trucking service for perishable goods called Dachser Frischedienst. A decade and a half later the division was renamed Dachser Food Logistics and expanded to include the distribution, procurement, and warehousing for nonperishable goods such as canned goods, pasta, and alcoholic beverages in all of Europe. In addition to transporting food from production sites to the supermarkets, Dachser expanded its services to include putting up sales displays, pricing goods, and restocking shelves as necessary. These valueadded services won the company additional large customers in the food sector. The so-called contract logistics concept was one answer to decreasing profit margins in the mid-1990s, due to intensifying competition. Therefore, it was gradually extended to nonfood markets such as Do-It-Yourself supermarket chains.

Another major business opportunity for Dachser presented itself in the 1980s with the advent of electronic data processing and related information technologies. As early as the mid-1950s Dachser had begun using punch card systems to track its containers. However, electronic mainframe computers made it possible to model the whole complex logistics of the freight forwarding world. The company’s management recognized the importance of this key technology and decided to turn it into the competitive advantage by investing in standardized information processes. Based on IBM’s AS/400 system Dachser’s greatly expanded IT department developed a number of proprietary software products, the first of which was DOMINO, a standardized process management software package for the whole Dachser network. It was launched in the mid-1980s.

In 1990 the company followed up with a fully integrated tracking and tracing system that went online two years later. Another major innovation of 1992 was the MIKADO warehouse and distribution management software, suitable for small as well as very large warehouses. This was also developed in-house. Internationally standardized identification numbers combined with bar codes made shipment tracking even easier in the 1990s. In 1993 Dachser received the European Transport Award for the company’s IT systems which enabled data transfers across the borders of various European countries, long before the Internet made headlines. In 1997 Dachser added collection and delivery scanning to its local transport services. Three years later the company launched Active Report, a fully automated supply chain management system that allowed customers to track their shipments in real time and immediately informed them of delays.

RIDING THE WAVE OF GLOBALIZATION

The creation of a single market within the European Union and subsequent legislation that gradually removed more and more trade barriers within many western European countries, the fall of the communist block in 1989, and the following liberalization of world trade prepared the ground for an unprecedented boom in international trade and the global division of labor. Fueled at first by the rise of Japan and the so-called tiger states of the Pacific Rim, and later by the opening of Eastern Europe, South America, China, and India to foreign investment, the burgeoning trade led to sharply swelling transport volumes around the globe.

It was in this environment that the company founder’s oldest grandson, Bernhard Simon, was put to the test. After an apprenticeship in freight forwarding, he had studied business administration, worked one year as a volunteer in Brazil, and afterward was employed at a French trucking company. In 1989 Simon joined the family business and became a member of the management team ten years later. When border controls fell in the 1990s and customs clearance procedures were abolished within the European Union, Dachser lost a major income source. Simon was responsible for the necessary restructuring of business operations, which resulted in a 30 percent productivity gain.

Throughout the 1990s and into the new millennium Dachser worked on improving its international logistics network in Western Europe and the United States, and expanding it to Eastern Europe, South America, and Asia by relentlessly setting up branches, subsidiaries, joint ventures, and strategic partnerships. In 1998 the company formed an air cargo alliance with four other forwarders, including Birkhart Globistics, Geis Cargo, A. Hartrodt, and M&M Air Sea Cargo, in the hopes of gaining a competitive advantage by pooling their cargo volumes. In 2000 the alliance was made official under the name Future Group. Two years later the group became one of Lufthansa’s preferred business partners. This was a win-win arrangement: Airlines were able to get more business and had to deal with only one instead of five different forwarders, who in return achieved lower rates and were able to secure critical capacity during peak seasons.

In 1999 Dachser acquired a majority stake in French freight forwarder Transports Graveleau S.A.S., which was the first step toward the newly defined goal of becoming Europe’s leading freight forwarder. Founded in 1966 and based in La Verrie, Graveleau’s network included nine foreign subsidiaries in addition to 57 branches in France. After the turn of the millennium the company put great efforts into setting up a network structure in China with 14 locations in the region. The year 2006 saw Dachser acquire an 80 percent stake in Czech freight forwarder E.S.T., establish a joint venture with Brazilian logistics service provider Logimasters with 12 branches in major Brazilian shipping hubs such as São Paulo, Rio de Janeiro, and Porto Alegre. Together with Indian freight forwarder AFL, Dachser founded a deep-sea and air shipping joint venture based in Mumbai with 30 branch offices in 2007. As a result of these activities, Dachser doubled the number of its staff while tripling total sales within just one decade.

SIGNING A CONTRACT FOR THE FUTURE

In 2001 the Dachser shareholders—each of Thomas Dachser’s daughters holding a 35 percent stake and their six children owning a 5 percent share each—updated the shareholder agreement, which was extended until the year 2030. According to the new rules, only one heir per grandchild could become a Dachser shareholder. The remaining descendants of the founder would be paid out in cash. After earning the trust of his fellow managers, advisory board, and family members, Bernhard Simon became spokesman of Dachser’s executive management board in 2005.

Despite the prospects of an intensifying consolidation process in the global freight forwarding markets, Dachser remained confident that the company would come out on top of the game by following a sustainable growth policy drawing from its own resources. To achieve its ambitious growth targets, the company was planning to invest $1.3 billion until 2011.

Evelyn Hauser

PRINCIPAL SUBSIDIARIES

Transports Graveleau S.A.S. (France); Dachser Far East Ltd; E.S.T. (Czech Republic); Logimasters & Dachser Transportes Nacionais e Internacionais Ltda. (Brazil); AFL Dachser Pvt. Ltd (India).