Frank Guenzerodt joined Dachser USA as president and CEO in August 2004. Guenzerodt, a German national, is based in Atlanta. He spoke with Air Cargo World about the company’s U.S. operations and how Dachser is opening locations in St. Louis and possibly Seattle, Nashville, Tenn., and the Kansas City area over the next year.
What is your outlook for the U.S. airfreight market in the next year?
I think it will remain stable with very little growth for 2014. Short of any global disasters and Russia being totally stupid, I don’t think we’ll see any major declines. We see a fairly stable market with not too much revenue from the air-based side of the carrier.
What is the outlook for Dachser USA’s airfreight business in the next year?
We continue to expand in key global economies worldwide. On the U.S. side, we have currently 11 locations with just over 200 people, and our expansion plan for 2014 plans on an additional two to three locations, and the business goes up approximately 20-25 percent in fiscal [year] 2014. So being still a smaller player in the air cargo arena of the market of the United States, we see ourselves growing on the market share side quite a bit. Obviously, you have a lot of mega-mergers going on with some of our very large competitors. Fortunately, that leaves some customers dissatisfied, which is certainly our target group. The focus on our expansion goes to the life science sector and vertical. We’ve made quiet a few in-roads there. And of course, a lot of life science products are airfreight products…The other vertical we are aggressively building sales teams and account management teams on would be automotive.
What sectors is Dachser USA concentrating on in regards to air cargo?
Our main concentration is two-fold. The first concentration is on trade lanes which are network-enhancing. We do it, but not necessarily promoting black African destinations because it’s not a target market for us at this point. So we want to focus on those trade lanes and target markets where we have Dachser locations on the other end, which in a nutshell is mainly Europe and within Europe, of course, Germany since it’s our home country. In Latin America, the majority focus would be Brazil as the largest economy. And [the focus] on trans-Pacific [would be] Asia overall; within Asia, [the focus is on] greater China and India. We’ve actually a very strong presence in China, but even more so in India with some city offices.
What trends are going on right now with the U.S. and air cargo?
Twenty-something years ago, somebody invented Cargo 2000. Now we’re 14 years past 2000, [and] we still do the same thing. So [with] development in air cargo in regards to technology and transit time, I don’t think much has changed, although on the technology side, I see more and more development. We need to continue to focus on mainly in the e-cargo environment, [where] we’re heavily investing and continue to build e-cargo with the carriers, standardization, visibility on air tracking and tracing interfaces to carriers, so customers have a seamless follow-through on their reporting and internet tracking of their shipments and of their cargo movements. But really, not that much has changed in air cargo in general. As far as the volume of air cargo is concerned, we do see some movement to oceanfreight – some shift in the mode of transport. But it’s still somewhat limited.
How do you think the airfreight industry can improve?
The problem with the airfreight industry is profitability. I think still overall if you look at carrier profitability, more and more airlines [are] getting out of the cargo aircraft business. I think the biggest problem has been rate volatility. There are rate levels where it doesn’t allow carriers – it’s, by the way, similar on the oceanfreight side – it doesn’t allow carriers to make money. I think a more stable environment, a bit of lift planning, a bit of capacity planning would probably help. As you know, the revenues coming into the U.S. are much higher than the revenues going out of the U.S. just because of trade imbalances. So I think there’s certainly a few approaches that can be done. The problem is you would have to have the shipping public, especially large airfreight shippers, to be part of it because in order to make it sustainable, there has to be a certain rate level, and it can’t be every day spot rate. Ultimately, these carriers – especially cargo-only carriers – are in loss-making situations.