Category: News, Logistics, 3PL, Transportation, Ocean Freight

Global logistics services provider Deutsche Post DHL Group (DPDHL) said this week it has inked an agreement to acquire Mainz, Germany-based global ocean freight forwarding services provider J.F. Hillebrand Group and its related subsidiaries for roughly $1.5 billion (EUR).

Established in 1844, J.F. Hillebrand is a global service provider, focusing on ocean freight forwarding, transport, and logistics for beverages, non-hazardous, bulk liquids, and other products requiring special care. DHL said that over the last 12 months, J.F. Hillebrand generated revenue of around $1.4 billion (EUR), will ship roughly 500,00 TEU (Twenty-Foot Equivalent Units) in 2021, and has more than 2,700 global employees. DHL said that this transaction is subject to merger control clearance in certain jurisdictions, inter alia the EU and the U.S., with clearances expected in the coming months. DPDHL intends to fund the acquisition with available cash.

DPDHL added that this marks the company’s largest acquisition going back to 2005, when it acquired global air freight, ocean freight and contract logistics services provider Exel, which was subsequently renamed as DHL Supply Chain. And it added that the strategic combination of J.F. Hillebrand with DHLs Global Forwarding, Freight division will augment its dynamic ocean freight forwarding presence, explaining that a focus on core logistics is a big component of its Group Strategy 2025 efforts.

“With the growing maturity of our freight forwarding business, this bolt-on acquisition of Hillebrand is highly complementary to our existing portfolio,” said Frank Appel, CEO Deutsche Post DHL Group, in a statement “In line with our Group Strategy, we strengthen our core logistics business and deliver profitable long-term growth. Using our financial strength, we are able to pursue quality investments while reinforcing our unchanged commitment to deliver on investor return expectations.”

Tim Scharwath, CEO, DHL Global Forwarding, told LM there were various drivers that factored into this acquisition.

“While we’re unable to provide any details of the negotiations with Hillebrand, we can confirm that the growth and strong performance of our DHL Global Forwarding in recent years has prompted us to review bolt-on acquisition opportunities that could further strengthen our market position,” he said. “Hillenbrand proved a great fit and will generate healthy margins in a fast-growing business. It is a global service provider specialized in ocean freight forwarding, transport, logistics and supply chain management of beverages, non-hazardous bulk liquids and other products that require special care. It has a truly global footprint with a presence in over 90 countries and more than 2,700 employees covering major world trade lanes. For DHL, it offers attractive exposure to the fast-growing bulk liquid and adjacent commodities markets. Additionally, it will add substantial ocean freight volumes to our network, which will strengthen our market position and provide scope to optimize procurement.”

As for what bringing J.F. Hillebrand into the fold means for DHL’s customers, Scharwath explained that Hillebrand has an offering that is highly complementary to the DHL Global Forwarding business.

“It provides specialized capabilities that will enhance our portfolio and provide our customers, particularly in the alcoholic beverage, food and bulk liquid segments, with additional value-added services,” he said. “It will provide access to flexitanks (used in the transportation of liquids) in the market, which our team evaluates as the highest quality in the market. Importantly, Hillebrand has a best-in-class IT platform which will be a good fit with our myDHLi suite of tools and our overall digitalization agenda, which is focused on simplifying and optimizing our customers’ shipping processes.”

When asked to identify the biggest competitive advantages of this deal from a DPDHL perspective, Scharwath observed that the acquisition strengthens its position in the ocean freight market and also in the specialized bulk liquid segment and adjacent areas such as liquid food and pharmaceuticals, which are on a positive growth trajectory.    

“DHL Global Forwarding already has a strong presence in specialized alcohol delivery, for example, with its Gori wine and spirits business,” he said. “Hillebrand will add services that DHL Global Forwarding / Gori today do not have and increase volumes on several trade lanes. The footprints of the companies are complementary, which will open up new opportunities and unlock value for customers of both companies while creating topline synergies from cross-selling.”

Cees van Gent, CEO and Chairman of the Executive Board J.F. Hillebrand Group, said in a statement that the paring of J.F. Hillebrand and DPDHL is a perfect match.

“Hillebrand is a leading ocean freight forwarder specialized in transport, logistics and supply chain management of beverages, non-hazardous bulk liquids and other products that require special care,” said van Gent. “Deutsche Post DHL Group is a major global logistics company—the two companies are a perfect match and we are pleased to announce our agreement to unite and form a future together. I am proud of what the Hillebrand teams in true collaboration with our loyal customers and vendors have built over our 177-year history and we now look forward to joining forces with Deutsche Post DHL Group.”

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Global logistics services provider Deutsche Post DHL Group (DPDHL) said this week it has inked an agreement to acquire Mainz, Germany-based global ocean freight forwarding services provider J.F. Hillebrand Group and its related subsidiaries for roughly $1.5 billion (EUR).

Established in 1844, J.F. Hillenbrand is a global service provider, focusing on ocean freight forwarding, transport, and logistics for beverages, non-hazardous, bulk liquids, and other products requiring special care. DHL said that over the last 12 months, J.F. Hillenbrand generated revenue of around $1.4 billion (EUR), will ship roughly 500,00 TEU (Twenty-Foot Equivalent Units) in 2021, and has more than 2,700 global employees. DHL said that this transaction is subject to merger control clearance in certain jurisdictions, inter alia the EU and the U.S., with clearances expected in the coming months. DPDHL intends to fund the acquisition with available cash.

DPDHL added that this marks the company’s largest acquisition going back to 2005, when it acquired global air freight, ocean freight and contract logistics services provider Exel, which was subsequently renamed as DHL Supply Chain. And it added that the strategic combination of J.F. Hillenbrand with DHLs Global Forwarding, Freight division will augment its dynamic ocean freight forwarding presence, explaining that a focus on core logistics is a big component of its Group Strategy 2025 efforts.

“With the growing maturity of our freight forwarding business, this bolt-on acquisition of Hillebrand is highly complementary to our existing portfolio,” said Frank Appel, CEO Deutsche Post DHL Group, in a statement “In line with our Group Strategy, we strengthen our core logistics business and deliver profitable long-term growth. Using our financial strength, we are able to pursue quality investments while reinforcing our unchanged commitment to deliver on investor return expectations.”

Tim Scharwath, CEO, DHL Global Forwarding, told LM there were various drivers that factored into this acquisition.

“While we’re unable to provide any details of the negotiations with Hillebrand, we can confirm that the growth and strong performance of our DHL Global Forwarding in recent years has prompted us to review bolt-on acquisition opportunities that could further strengthen our market position,” he said. “Hillebrand proved a great fit and will generate healthy margins in a fast-growing business. It is a global service provider specialized in ocean freight forwarding, transport, logistics and supply chain management of beverages, non-hazardous bulk liquids and other products that require special care. It has a truly global footprint with a presence in over 90 countries and more than 2,700 employees covering major world trade lanes. For DHL, it offers attractive exposure to the fast-growing bulk liquid and adjacent commodities markets. Additionally, it will add substantial ocean freight volumes to our network, which will strengthen our market position and provide scope to optimize procurement.”

As for what bringing J.F. Hillenbrand into the fold means for DHL’s customers, Scharwath explained that Hillebrand has an offering that is highly complementary to the DHL Global Forwarding business.

“It provides specialized capabilities that will enhance our portfolio and provide our customers, particularly in the alcoholic beverage, food and bulk liquid segments, with additional value-added services,” he said. “It will provide access to flexitanks (used in the transportation of liquids) in the market, which our team evaluates as the highest quality in the market. Importantly, Hillebrand has a best-in-class IT platform which will be a good fit with our myDHLi suite of tools and our overall digitalization agenda, which is focused on simplifying and optimizing our customers’ shipping processes.”

When asked to identify the biggest competitive advantages of this deal from a DPDHL perspective, Scharwath observed that the acquisition strengthens its position in the ocean freight market and also in the specialized bulk liquid segment and adjacent areas such as liquid food and pharmaceuticals, which are on a positive growth trajectory.    

“DHL Global Forwarding already has a strong presence in specialized alcohol delivery, for example, with its Gori wine and spirits business,” he said. “Hillebrand will add services that DHL Global Forwarding / Gori today do not have and increase volumes on several trade lanes. The footprints of the companies are complementary, which will open up new opportunities and unlock value for customers of both companies while creating topline synergies from cross-selling.”

Cees van Gent, CEO and Chairman of the Executive Board J.F. Hillebrand Group, said in a statement that the paring of J.F. Hillenbrand and DPDHL is a perfect match.

“Hillebrand is a leading ocean freight forwarder specialized in transport, logistics and supply chain management of beverages, non-hazardous bulk liquids and other products that require special care,” said van Gent. “Deutsche Post DHL Group is a major global logistics company—the two companies are a perfect match and we are pleased to announce our agreement to unite and form a future together. I am proud of what the Hillebrand teams in true collaboration with our loyal customers and vendors have built over our 177-year history and we now look forward to joining forces with Deutsche Post DHL Group.”

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Another month of strong volumes was in the cards in July for the Port of Los Angeles (POLA) and the Port of Long Beach (POLB), according to data respectively issued by each port in recent days.

POLA reported that total July volume—at 890,800 TEU (Twenty-Foot Equivalent Units)—was up 4% annually, topping June’s 876,430 TEU, while falling short of the 1,012,248 TEU recorded in May, which set a new port record, topping the previous monthly high set in April, at 946,966 TEU. June also marked the 12th straight month of annual increases for the port, too, which was preceded by 11 straight months of annual declines.

POLA imports—at 469,361 TEU—rose 2.9% annually, which was ahead of June’s 467,763 TEU, while exports continued an ongoing decline, falling 27.6% annually, to 91,440 TEU. Empty containers—at 329,999 TEU—saw a 20.4% annual gain, topping June’s 312,600 TEU and falling short of May’s record 366,448 TEU.  

On a year-to-date basis through July, total POLA volume—at 6,318,675 TEU—is up 36.8% compared to the same period a year ago.

POLA Executive Director Gene Seroka said on a media conference call earlier today that these numbers are a reflection of how the American consumer’s buying strengths remain in full force, as well as a great indicator of just how sustained this American buying surge has been. And he said that the 4% annual gain are against a period when imports really started to take off for POLA.

“We welcomed 79 container vessels [in July] compared to 88 last year,” he said. “While we had ten fewer ships compared to 2020, cargo volumes still increased. That points to bigger ships and better utilization, bringing a chockful of cargo our way. In fact, POLA is now averaging an exchange loading and unloading of more than 11,000 TEU per vessel call, that is the best in the business.”

Addressing the trajectory of imports, Seroka explains that retailers are shifting from back to school and fall fashion goods, as well as Halloween products, to winter and year-end holiday merchandise, and he cited National Retail Federation data pointing to August as the biggest month on record for U.S. imports, despite retail sales falling 1.1% in July, which was reported earlier today.

On the export side, Seroka observed that the freefall continues, with July turning in the lowest monthly tally going back to February 2005.

“The ratio of imports to exports is now over 5.1, the widest gap we have seen yet,” he said. “Sadly, exports are down in 29 of the last 30 months at POLA.”

POLB data: Total July volume at POLB saw a 4.2% annual increase, to 784,845 TEU, for a new July record, topping the previous record set in July 2020. Imports headed up 1.6%, to 382,940 TEU, and exports fell 20.7%, to 109,951 TEU. Empties increased 22.8%, to 291,955 TEU.

Port officials said that the global pandemic continues to impact trade volumes, noting how an outbreak at the Port of Yantian in China delayed some vessels that called at the Port of Long Beach in July. And they added that it is likely that increasing COVID-19 cases in Vietnam will disrupt supplies in the months ahead as factories shut down to contain outbreaks of the virus.

“Ships arrived last month to move these empty containers out of the harbor and clear valuable terminal space as we handle historic amounts of trade,” said Port of Long Beach Executive Director Mario Cordero in a statement. “These boxes are a valuable commodity in the overstressed global supply chain. Our loaded exports are likely to rebound this month.”

Through the first seven months of 2020, total POLB volume—at 5,538,673 TEU—is up 32.3% annually. 

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United States rail carload and intermodal volumes, for the week ending August 7, were mixed, according to data issued this week by the Association of American Railroads (AAR).

Rail carloads—at 234,336—saw a 6.3% annual increase, topping the weeks ending July 31 and July 24, at 228,975 and 230,095, respectively.

AAR said that six of the 10 carload commodity groups it tracks saw annual gains, including: metallic ores and metals, up 7,424 carloads, to 23,193; coal, up 7,301 carloads, to 66,838; and nonmetallic minerals, up 3,131 carloads, to 33,759. Commodity groups that posted decreases compared with the same week in 2020 included grain, down 3,730 carloads, to 18,190; motor vehicles and parts, down 2,937 carloads, to 13,230; and petroleum and petroleum products, down 1,106 carloads, to 10,188.

Intermodal containers and trailers—at 275,271—slipped 0.6% annually, topping the weeks ending July 31 and July 24, at 273,565 and 273,124.

Through the first 31 weeks of 2021, AAR reported that U.S. rail carloads—at 7,141,531—are up 9% annually, and intermodal units—at 8,673,507—are up 14.6%.

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