Q&A: Frank Guenzerodt, President and CEO of Dachser USA

Logistics Management Group News Editor Jeff Berman recently caught up with Frank Guenzerodt, president and CEO of Dachser USA, the American arm of global 3PL Dachser, about the company’s ongoing expansion efforts into the U.S. Berman and Guenzerodt also discussed the global economy, industry, M&A, and other topics. A transcript of the conversation is below. 

Logistics Management (LM): what is your take on the global economy as it relates to the 3PL markets you serve, given the many wildcards out there at the moment like China, ow fuel prices, and geopolitical issues, among other things?
Frank Guenzerodt: It is lucky to be based in the United States, as the economy here is still doing OK compared to some other markets. But from an international transportation and logistics point of view, China, over all, is still doing well, even if its rate of growth is not at its typical levels. What is more concerning is economic conditions in countries like Brazil doing extremely poorly and softness in Europe. We are a German-owned company, and it is still doing adequately well, despite some political issues related to refugees. The auto market and industrial activity there to a degree is going strongly. We have a strong presence in Asia and India, which is doing OK, too.

LM: In regards to your U.S. expansion, what are some of the key drivers?
Guenzerodt: We are seeing good opportunities to gain market share, build our business and expand here. Over the last four years, we have grown quite a bit in the U.S. and expanded our product offerings to compliment and complete our service portfolio. Similar to what we do in Europe, we now offer warehouse management services in the U.S. and have been building up our domestic freight forwarding, and transport into and out of Mexico, especially in industrial markets. We are focusing on having a complete supply chain management portfolio here.

LM: How are economic conditions in the U.S. specifically impacting business for you, with consumer demand largely flat and relatively modest retail sales gains?
Guenzerodt: When you look at the numbers for things like consumer satisfaction, things are still OK. In the U.S., we live and die, in a sense, by consumer consumption as the economy is concerned, especially when compared to Germany, for example, which is more driven by its industrialized output, so it is certainly an issue for us, as we don’t really have a retail-based service offering in the U.S. at the moment. It is something that we are looking into for the future, though, but more so in a B2C environment. That would not be an in asset-based way, but it would have somewhat of a last-mile focus.

LM: In the U.S. markets you are serving on the industrial and manufacturing side, how are things going, given recent declines in the U.S. on those fronts? Have these recent declines prompted increased service requests or assurances from customers?
Guenzerodt: Even with a slowdown in U.S. production output, auto is still quite strong. As for customers, we have seen an increased focus from them on costs and saving money in the supply chain. Some of that has come from transportation and the purchasing of raw materials overseas, and the challenges that come with combining freight for ocean points. There are many savings points we focus on to overcome transportation price pressure. And as one of the largest providers in Europe there is a focus on playing to our strengths; we have a focus on U.S. companies needing ocean transportation to gain access to the EU market for things like warehousing and distribution, among others.

LM: How many U.S. customers do you have?
Guenzerodt: Approximately 9,000.

LM: How many sectors does that represent?
Guenzerodt: Basically all except for military, but the majority would be in automotive, industrial, life sciences (ranging from pharma to medical equipment), and fashion and professional sports clothing and equipment represent the majority of it. 

LM: Can you please explain the ongoing role of technology in your service offerings?
Guenzerodt: IT solutions are very important for us, as at the end of the day we are basically a communications business. And the proper IT solution integration with the customer is highly important. We are currently in the early stages of our U.S. rollout of our global integrated transportation system, which will begin at the end of March and be completed by the end of the third quarter. This situation will offer the complete ability to track cargo going into and out of wherever they do business with us. It will have a strong focus on the purchase order management side, which is something U.S. customers are looking for to better address cost pressures and on the personnel side, too, while looking for more solutions from their 3PLs.

LM: How do you view the ongoing state of logistics M&A?
Guenzerodt: We like it in the sense that when these large deals happens two mega competitors become one. It is a good development for a mid-size company that is aggressively growing in the U.S. And these deals typically make the involved companies very internally focused for a number of years as far as integration is concerned. It is also a good way for a company like us to gain access to new customers, as service levels for the involved companies tend to fall by the wayside after a deal is made. From a macro point, though, sometimes these acquisitions do not make sense, as there is often a huge amount of duplications, but there will probably be more of it continuing, because there is still a huge amount of venture capital money out there, making it interesting to follow. And there are a lot of Asia-based companies that want entrance into the U.S. market, and M&A is a way for them to do so.