German premium freight carrier IN tIME Express Logistik achieved further increases in shipments and turnover last year despite a slowdown in demand from automotive suppliers and car manufacturers towards the end of the year.
Revenues increased by 7% year-on-year to €149.2 million while the number of bookings across the whole range of cargo types from individual spare parts via pallets and other small unit sizes to full truckloads went up by around 1% to 460,495 consignments.
The relatively strong increase in turnover was driven by the growing share of long-distance cross-border shipments versus shorter-distance domestic traffic. This trend has been noticeable for a number of years as clients from the automotive and other manufacturing industries in Germany and Western Europe continue to expand their supplier networks to Central and Eastern Europe. Thus delivery distances for time-critical shipments between manufacturers’ plants and their suppliers tend to get longer.
Another factor that boosted turnover for IN tIME was the strong increase in premium airfreight bookings up to full charters of cargo aircraft following the launch of IN tIME’s new ‘Fly premium’ product. Segment turnover in the company’s airfreight division tripled last year, and management sees its strategy to establish premium airfreight as a second pillar besides road operations on track. The advantage for shippers/consignors is that they can get an integrated express product from IN tIME covering pick-up and final delivery of the consignment as well as air freight/air chartering.
“Importantly, it means that we can also offer seamless tracking and monitoring of cargoes during the entire transit,” explains Gerd Roettger, member of the board of managing directors. Especially large clients from the automotive sector have begun to nominate IN tIME for integrated premium air freight solutions.
However, enquiries and activity for premium freight were more volatile last year from IN tIME’s perspective.
“Market developments in 2015 can be split into two phases,” says Roettger. “Demand was extremely buoyant from the start of the year until autumn especially from car manufacturers and their tier suppliers. It was a real challenge for us to provide the necessary capacity and we had to hire significantly more staff to be able to meet our customers’ requirements.” By the end of 2015, IN tIME had increased its headcount to 618 employees – up from 556 as per end of 2014.
However, the dynamic growth in business could not be maintained through the end of the year as premium freight demand steadied and eventually declined in the final quarter of the year. The slowdown was presumably a knock-on effect from weakening growth in the German automobile industry which remains a core customer segment for IN tIME as for many other premium freight providers.
According to latest figures from the German Association of the Automotive Industry (VDA), vehicle production in Germany grew by around 2% to 5.7 million units last year, however growth flattened towards the end of the year with even a 1% decline in domestic vehicle production during December. Generally, material and supply shortages in the automotive industry decrease as capacity utilization in the factories falls. This usually results in fewer orders for premium freight services.
The outlook for the automotive industry this year is still reasonably good, though, with market research firm IHS forecasting an uptick in growth of global light vehicle sales from 1.5% last year to 2.7% in 2016. Export-oriented German and European OEMs should benefit from the increase in global demand while the more domestic-oriented assembly plants and their suppliers can expect higher sales, too, as new car registrations in the European Union remain on an upward trend.
IN tIME, with 20 branches across Germany, Sweden, Hungary, Romania, the Czech Republic and Poland, operates in the niche logistics sector of time-critical delivery services, across 18 countries in Europe. South African freight logistics firm Super Group bought a 75% majority stake in the company from investor Equistone for €153.5 million in July 2015.
