Traditional forwarders beginning to see the threat from online platforms
While uncertainty in global trade is proving prosperous for the forwarding community, legacy forwarders appear ...
Kuehne + Nagel’s recently departed head of air freight, Tim Scharwath, was this morning named as the new chief executive of DHL Global Forwarding (DGF).
The freight forwarding subsidiary of the world’s largest logistics company, Detusche Post-DHL, DGF has been beset by internal problems for well over a year, principally due to the ill-fated IT transformation project New Forwarding Environment, which cost previous DGF chief executive Roger Crook his job around a year ago.
The €750m project was cancelled after the division reported crippling losses for 2014 and last year DP-DHL announced it would write off €345m as a result and instead buy a series of off-the-shelf products instead.
In the wake of Mr Crook’s departure, DP-DHL chief executive Frank Appel brought back seasoned DHL executive Renato Chiavi to lead the division on an interim basis, while Dr Appel himself took executive responsibility for the unit.
Mr Chiavi led ocean and air freight business for the former DHL Danzas between 1995 and 2006, and has since been serving as an advisor to the DHL board. The company told The Loadstar today that he will continue to support it in a consultancy role.
DP-DHL said 50-year-old Mr Scharwath “will join the group within the next 12 months”, with Dr Appel retaining responsibility for the division until then.
Hiring Mr Scharwath is a considerable coup for DHL. He is one of the most experienced air freight forwarders in the business, and DHL remains the largest air freight forwarder in the world and the second largest sea freight forwarder.
For the year 2014, Transport Intelligence estimated that the company was the largest overall global forwarder, with around $10.7bn in revenues from air and ocean freight forwarding and an 8.4% global market share.
In 2015, according DP-DHL’s annual report, it handled 3.7m tonnes of air freight and 2.9m teu of sea freight.
His recruitment is also likely to put to bed months of speculation that Deutsche Post might sell its troubled forwarding unit, despite a categorical denial from Dr Appel at this year’s Transpacific Maritime conference in Long Beach.
“We are very pleased that Tim Scharwath will become a member of the board of management, taking over responsibility for our Global Forwarding and Freight division. He comes with an impressive freight forwarding track record and is ideally placed to continue the encouraging progress we start to see in our forwarding businesses, and which we will steadily grow over the years,” Dr Appel said.
Amadou Diallo remains chief executive of Freight, responsible for road transport.
The company also held its annual general meeting at its headquarters in Bonn this morning, when Dr Appel forecast the company would make a consolidated operating profit of €3.4-3.7bn, following a first-quarter result that saw group EBIT rise 21.3% year-on-year to €873m, with each of its four divisions – post, express, forwarding and supply chain – contributing.
“The Post-eCommerce-Parcel (PeP) division is likely to contribute at least €1.3bn to the group operating profit, with the DHL divisions Express, Global Forwarding and Supply Chain contributing a total of €2.45bn-€2.75bn,” the group said today, claiming it would reap returns from investments in each of the divisions, with its European parcel network having been expanded while its express division is seeing further investment in its air fleet and global hubs.
“Having experienced a challenging year, the Global Forwarding division again recorded a significant increase in profits; the turnaround within the business is showing signs of considerable progress. Moreover, the optimization programme which is being further pursued this year is increasingly bearing fruits for the Supply Chain division,” it added.
The AGM also proposed an €0.85 dividend payment.