Global Groupage
By Marcus Schick
I 6 minute read
22/04/2024
The world is changing. And as a result, so are the markets. Shifts in geopolitical power and interests combined with supply chains under almost constant strain highlight the need for new concepts. For logistics, this means achieving the best possible integration of global end-to-end transports and contract logistics solutions.
It seems paradoxical: an increasingly digitalized world is bringing people and markets closer together every day; but at the same time, crises, wars, and shifting geopolitical power and interests are creating a level of bloc-formation, protectionism, and rejection of free trade that hasn’t been seen in a long time. One thing is clear: in this game, the cards are being reshuffled with increasing frequency.
And different economies are moving at very different speeds. While in 2008 the United States and Europe vere evenly matched in economic output, now the US figure is 80 percent higher. In the future, global growth will continue to occur mainly outside Europe. According to estimates by the International Monetary Fund, the contribution of Asia Pacific countries (APAC) to global gross domestic product is set to rise to over 40 percent by 2040—and will be over half by 2050. Asia is already home to nine of the world’s ten biggest ports.
The McKinsey Global Institute recently published a study, “Geopolitics and the geometry of global trade,” that takes a closer look at these developments. In it, market researchers analyze how close trade ties between different countries and economies are now—as well as how this could change in the future—regardless of the actual geographic distance involved. As they look to remeasure the “geometry of global trade,” the McKinsey study’s authors see two reconfiguration paths. The first is the trend toward “deglobalized” international trade. An example of this is the drifting apart of the world’s two largest economies: the US and China. This is manifesting itself in punitive tariffs, sanctions, mutual blocking of access to markets, the decoupling of research and development, and many other dissociative measures.
Resilience through cooperation
Overall, the study’s authors favor the second path, namely more diversified trade that would weigh the potential for collaboration against geopolitical caveats. Indeed, this would bring together a host of potential benefits, including resilience against certain types of supply disruptions as well as opportunities to promote a more integrated trade system system and economy. This must be built on mutual trust and open, transparent communication. “A broad and diversified web of trade connections will not be achievable without cooperation,” the study states.
And time is running out, especially for those European economies under pressure as a result of recent, rather gloomy economic forecasts. “Over the next ten years, around 85 to 90 percent of global economic growth will take place outside the EU,” said Valdis Dombrovskis, European Commissioner for Trade, at the Munich Security Conference in February 2024. “If we wish to preserve our growth and our prosperity, we must therefore remain connected,” he urged.
Integrating global networks
“The world around us is changing. Markets are changing. Our customers are changing. We must see to it that we also change,” says DACHSER CEO Burkhard Eling. “If the main driver of DACHSER’s long-term growth is to be found in Asia and the Americas, then we must reflect this in the structure and quality of our networks. To do what we can today to create the conditions for the business models of tomorrow and beyond, we’re integrating the stable and ultrahigh-performance core of our European groupage business even more closely with our range of intercontinental logistics services. Thinking in such long-term dimensions is a challenge, but it’s also DACHSER’s privilege as a family-owned company.” The focus here, Eling says, is on combining a great many individual solutions to form an integrated, holistic, and consistent overall solution from Europe to the world and from the world to Europe. “We call this Global Groupage,” Eling says.
The backbone of this comprehensive integration across the entire market for logistics and for air and sea freight is provided by DACHSER’s road logistics groupage network. This network has grown and matured over decades and counts among the largest and best-performing in all of Europe. “By further enhancing the physical and system integration of our two networks—European Logistics and Air & Sea Logistics—we’ll be able to offer our international customers a new integrated approach as well as access to entirely new markets to and from Europe,” says Dr. Tobias Burger, COO DACHSER Air & Sea Logistics. “That is something only a provider like DACHSER—with our requisite network maturity and, most importantly, a globe-spanning workforce dedicated to service-oriented collaboration—can pull off on a global scale.”
Other providers might be content to think of logistics as merely offering transports from A to B. But at DACHSER, providing customers with infinitely integrable logistics services through thoroughly integrated networks is second nature. “As we continue to systematically develop and expand our road logistics network, we always follow the principle that, as the most integrated logistics provider, we offer a level of quality that sets us apart from the competition,” says Alexander Tonn, COO Road Logistics at DACHSER. “What makes DACHSER’s networks so special is how interconnected they have become in terms of assets, people, information, and technologies.”
Now that DACHSER is taking the experiences gathered in European Logistics and applying them as it further expands its air and sea business, Tonn continues, the company can combine the best of both business fields: Road Logistics and Air & Sea Logistics. Burger agrees: “Step by step, this is how we’re expanding our global end-to-end transport and contract logistics solutions.”
Issue 3/2023 of the DACHSER magazine reported on how DACHSER manages the entire supply chain for its customers, from sourcing in Asia to delivery to customers world-wide, using the example of a customer from the technology sector. ifm electronic benefits from the seamless integration of DACHSER’s global Air & Sea and European Logistics networks. DACHSER Air & Sea Logistics arranges to have components from Asia sent in shipping containers from Hong Kong to Europe. From Hamburg, the containers then make their way by train directly to southern Germany. DACHSER unloads them at its Langenau branch near Ulm, from where the products are delivered by truck to ifm’s biggest development and production site in Tettnang and on to its European markets of France, the Czech Republic, and Poland. This results in full transparency and optimum quality control across the entire supply chain with significantly shorter delivery times.
COO Air & Sea Logistics Tobias Burger talks about his path to the top of air and sea freight at DACHSER and the potential of globally integrated transport and contract logistics services.
We’re developing Global Groupage as the future groupage solution for our globally active customers.
A solution for customers
Economists are advising globally active companies to rethink their approach. As the McKinsey study puts it: “In the current state of uncertainty, the imperative for business leaders is to be prepared for a range of potential shifts in the geometry of trade.” It’s about having a strategy in place to help shape a new architecture to match an evolving world. “We’re developing Global Groupage as the future groupage solution for our globally active customers,” Eling says. “In doing so, we’re clearly following the DACHSER mission, which is to create the world’s most intelligent combination and integration of logistical network services and use it to optimize the logistics balance sheet of our customers. There’s a future in that, especially in challenging times.”
