2018 Integrated Report – On track towards a better Railway

Development of business units

Business model

DB Schenker serves established markets and emerging national economies as an integrated transport and logistics services provider with a global network. In land transport, the dense network connects the most important economic regions in Europe. Services include time and cost-optimized services for general cargo, partial and full load transport along with door-to-door solutions across Europe. As one of the global leaders in air and ocean freight, DB Schenker offers the entire range of services in this segment. In contract logistics, the services offered cover all stages of the value-added chain from supplier to producer/trade, end customers and spare parts service. The core area of expertise is the planning and handling of complex global supply chains, including sustainable logistics concepts.

DB Schenker has a global customer base in a wide range of industries and a focus on industrial customers. The vertical market approach is aimed at developing industry-specific solutions. Major customers are provided with tailored solutions as global accounts.

In air and ocean freight, we act solely as a freight forward­­er without our own aircraft and ships. In some segments of land transport, we use our own vehicles and containers. Transshipment terminals and warehouses are gen­­erally our own property or are leased over the longer term.

Motivated and well-trained employees are key resources for a service provider. Close customer relationships and industrial expertise are extremely important. Efficient IT is also essential for good product and service quality.

In addition to airlines and shipping companies in air and ocean freight, our major partners include land transport subcontractors for the supply of transport services.

Performance measurement depends on the line of business: for land transport, the key indicator is the number of shipments; for air freight, it is the tonnage billed; while in ocean freight, it is the freight volume, measured in TEU. There is no comparable volume measurement in the contract logistics segment. In this case, market comparisons are usually made on the basis of revenues. DB Schenker has a relatively low capital intensity and real net output ratio. About 70% of revenues in the transport business lines come from procured intermediate services. Therefore, optimizing these purchase relationships and balancing various influential success factors such as transport relations, vol­­ume, weight and mode of transport represents an im­­port­­­ant factor for success and a value driver. The same ap­­plies to managing fluctuations in freight rates and the specific surcharges to these freight rates. In particular, the effective and efficient use of personnel resources is a key driver below gross profit. This is of particular importance in the contract logistics line of business. Here, know-how and experience relevant to the industry are an essential success factor in the optimal design of intra-company logistics processes. Effective IT support is also especially important.

The most important sources of revenues are transport and logistics services, including added value services such as the assembly of modules or assemblies in the automobile industry or putting together special sales packaging for the retail sector.