31. The effects of the economic crisis on the German industry
32. The effects of the economic crisis on the German economy Gross domesticproduct Percentagedchangestothepreviousyear‘svalue(adjustedforprice; chainindex) Original value, trend, seasonallyadjustedvalue (adjustedforprice; chainindex) Export and Import Real Exports (seasonallyandworkingdayadjusted) Real Imports (seasonally andworkingdayadjusted) Current Rate1(right-handscale) Billion Euros (left-handscale) Annual Average² 1 Change frompreviousquarter in % ² Figures: Changesfrompreviousyear in % [www.destatis.de]
33. The effects of the economic crisis on the German economy (cont.) Gross domesticproductand IFO - economicclimate GDP (quartely), real, % compared with previous year Business situation (industrial economy), seasonally adjusted balances Business expectations (industrial economy), seasonally adjusted balances Business climate (industrial economy), seasonally adjusted balances GDP (annual average), real, % compared with previous year [www.bundesfinanzministerium.de] The strong exportfocusofthe German industryandthespecialization on capitalgoodsoutstandinglyincreasedtheimpactofthe global economiccrisis. [Monthlyreportofthe German Federal FinanceMinistry, August 2009]
34. The effects of the economic crisis on the German logistics sector „Due totheeconomiccrisis, a dropofupto 9% ofthelogisticsmarketwas expected.“ [Peter Klaus, authorof TOP 100 in European Transport and Logistics Services 2009/2010] The economic crisis had a negative impact on all transport modes Development of quantity of goods transported changescomparedtopreviousyear Hundreds of orders in shipbuilding (vessels, tankers, etc.) have been cancelled during 2009 Rail freight dropped considerably (e.g. Deutsche Bahn freight volumes decreased with 19% over 2009, with peaks of 40%) Truck traffic decreased (e.g. Deutsche Tollcollect income dropped with 18% over 2009) IATA numbers over recent months are showing double the downturn that we saw after 9/11! (Spohr, Lufthansa Cargo) air rail inlandnavigation maritime traffic road [www.destatis.de]
35. German companies affected by the economic crisis "We are far from overcoming the financial crisis, in particular with respect to its consequences on the real economy in 2009” [Norbert Reithofer, Chairman of BMW; Nov 4, 2008] "Following the dramatic drop in our global business in the fourth quarter of 2008, demand for chemical products has not picked up since the start of 2009. A reversal of the trend is not yet in sight“ [Jürgen Hambrecht, CEO and Chairman of the Board of BASF; Feb 26, 2009] "Our business is an early indicator, but we have no backlog, so I cannot say how things will develop“ [Frank Appel, Chief Executive of Deutsche Post DHL; Jun 19, 2009] “…because of the financial crisis parts of Siemens' business had experienced a decline of orders of as much as 70% … it will take a long time until there will be an expansion of our capacities again” [Peter Loescher, Chief Executive of Siemens; Oct 25, 2009]
36.
37. Freightratesdeclinedsignificantly in 2008 and 2009. In thecourseof 2009 the Baltic Dry Index slowlypickedupagainand a futureupswing was tobeexpected.The effects of the economic crisis on the transport sector Dow Jones Transportation Average Baltic Dry Index 2008 2009 2006 2007 2010 2008 2009 2006 2007 2010 [http:/www.bloomberg.com/ ] [http://www.bloomberg.com/ ]
38.
39. The forecastoftheCenter for Applied Research on Supply Chain Services (SCS) of the Frauenhofer Institute for 2009 becametrueandthe German logisticsmarketdroppedby 11 percent[Press release , Frauenhofer IIS; 22. Februar 2010] The Deutsche Bahn AG temporarywithdrawed 8 percentoftheirfreightcarsfromcirculation in December 2008. In containershipping in August 2009 upto 10 percentofthecontainerfleetlyingemptyatanchor. [DB] [http://www.spiegel.de/img/0,1020,1494030,00.jpg] [www.dnbgermany.de]
40.
41. The Port of Hamburg experienced at 28% drop in container handling, which translates to 7,01 Million TEU.
42.
43. Placing the hopes on increasing transport volumes, especially on Asian shipping routes, no other country has ordered the number of container vessels Germany has.
44. Only when the Asian economy picks up again, transport volumes will also increase.South East Asia Rest ofAsia North East Asia Baltic Sea LatinAmerica Rest of Europe North America Other shippingroutes
48. The GDP hasrecovered; comparedtothesecongquarterof 2009, the GDP hasgained 4,1%changescomparedtopreviousyear‘ quarter changescomparedtopreviousquarter [www.destatis.de] quarter quarter quarter quarter quarter
51. The free fall of 2008 fortunatelydiscontinued.BVL Logistics Indicator indexpoints normal level currentsituation climate expectations The willingnesstoinvestisincreasingandemploymentispickingupagain. [BVL, Logistik-Indikator, Institut für Weltwirtschaft (IfW), 2010-Q2]
52.
53. The futureexpectationsarebyfarmoreoptimisticthanpreviousonesand a positive outlookremains.„Sincethebeginningofthisyear, all businessdevelopmentindicatorsclearly signalizeexpansion in the German logisticsmarket. [Dr. Stefan Kooths, Professor andeditorofthe BVL LogisticIndicator] [BVL, Logistik-Indikator, Institut für Weltwirtschaft (IfW), 2010-Q1]
90. Training top talentwith SC knowledgeTop 8 Challenges to Logistic Service Providers: No mention of technical innovations, but for most of the measures are new technologies needed! 0% 20% 40% 60% [Global Supply Chain Trends; Annual Survey by PRTM Management Consultants, 2010]
92. Reactions of German companies to the crisis “We have used the crisis year in 2009 to carefully review our processes, structures and management concepts.” [Bernhard Simon, spokesman of DachserGmbh & Co. KG] “Actively driving change, exploiting talent and innovation; and ensuring continuity in the provision of services and quality to the customer – these are the new post-crisis requirements for logistics service providers” [Dr. Detlef Trefzger, DB Schenker Board of Management Contract Logistics & Supply Chain Management] adjusting internal processes Whatactions do companiestaketoencountertheeconomiccrisis?* human resource management reassessing service provider relationships increasing outsourcing activities establishing networks and co-operations * BME-Survey of 171 German companiesoftheindustralsectorbytheGerman Association for Materials Management, Purchasing and Logistics (BME), 2009
96. Actions taken: human resource management BME-survey Development ofshort-time (2006-2009) Thausandpersons „The person, whoexploits all optionstomakecostsmore flexible before a staffreductionis in order, proveshimselfas a trueleader.“ [Andreas Wiele, Springer Vorstand] [www.bundesfinanzministerium.de] 2008 2009 2006 2007
97.
98. 58% of the respondents would like to increase the operational flexibility and become more demand driven
99. Another 58% aim at reducing capital costs, head count and operational expenses* 2009 Study „'The Hidden Opportunities of Economic Crisis” by CapGemini, Panalpina and Oracle questioned logistic service providers and users concerning the effects of the crisis on their relationsship. Essentials forimprovingbusinessrelationships Knowledgeandexpertise Incentives Joint investment Willingnesstochange
100.
101. unlikethethe UK orBeNeLuc countries, theadvantagesofoutsourcingwere not recognized in Germany untilthe end ofthe 1990s, andthemajorityofoutsourcingprojectswereonlylaunched in the last fiveorsixyears.Tomeetthecustomersneedswhenprovidingoutsourcingservices, a broadknowledgebaseisneeded. The successofoutsourcingactivitiesisstronglyrelatedtothequalificationsof ouremployees. [Dr. Detlef Trefzger, DB Schenker Board of Management Contract Logistics & SCM]
102. Actions taken: networks and co-operations For Renault Nissan Europe the crisis has been a key factor for extensive restructuring of logistics and supply chain Management into an alliance between the two OEMs. Merging the supply chain divisions from each OEM has created a single logistics function for the extended Europe region. “In putting together the two models, we are not saying that ‘one is right’, and ‘one is wrong,’ but it is the mix that is essential. We will take what is best from each.” [Francesca Gamboni, head of inbound logistics for Renault Nissan Europe] BME-survey
105. Focus on supplychainvisibility, restructuring, increasingefficienyandcooperatingwith innovative logisticserviceproviderscrisismanagement in thecenterofinterest
106. Future trends: focus on greenlogistics, securityandcooperationwithserviceprovidersRelevant supply chain topics and trends Survey on thetrade fair „transportlogistics 2009“ Today 2015 Fields of innovation: security, green logistics, supply chain visibility [DB Schenker Laboratories, 2009]
131. Trade off betweenProactive actions meeting customer requirements Innovationsare a must tomaintain a competetiveposition in themarket – forbothsides!
143. The Port of Hamburg scanslessthen 0,6% of all containers (per year)
144. A newlawenactedbythe US governmentmakesthescanningof 100% of all containersdestinedtothe USA, mandatoryby 2012[www.zoll.de] Endurance tests for the ports, but opportunities for new technologies, e.g. Neutron Bombardment instead of x-raying
148. Innovations driven by logistics service providers, e.g. Container Security Box ID der CSB Innenraum- Sensor CSB® Container Security Box ofKühne+Nagel
157. Contact Univ.-Prof. Dr. Thorsten Blecker HLI – Hamburger Logistik Institut GmbH Weidestr. 134 22083 Hamburg, Germany Ph.: +49 (177) 3009340 http://www.hli-consulting.de blecker@hli-consulting.de Hamburg University of Technology (TUHH) Institute for Business Logistics and General Management (W-2) Schwarzenbergstr. 95 21073 Hamburg, Germany Ph.: +49 (40) 42878 - 3524 blecker@ieee.org For further information or specific inquiries please contact:
162. While nearly two-thirds of survey participants are companies with annual revenues greater than $1 billion, more than 10% have revenues lessthan $100 million.