Overcoming the crisis with a dual strategy

"We will overcome the crisis," BLG CEO Detthold Aden said confidently before the Bremen state press conference on 7 December. However, Aden was not able to display the usual successful track record for BLG at the end of the year. Logistics service providers are dependent on economic activity. The sea ports particularly benefit from globalisation during good times because the world trade volume has double the
growth rates of global production. Container traffic is even trebled. During a global crisis, this ratio is reversed, which is why the ports are now particularly
affected.

Slumps at the terminals
At the major seaports between Hamburg and Antwerp, the decline in container traffic averages 20 percent. This is virtually exactly the case for Bremerhaven. There, Aden expects some 4.4 million TEU (2008: 5.5 million TEU) by year's end. The car terminal in Bremerhaven has been hit even harder. The turnover will be more than 40 percent below the previous year by the end of this year. Some 1.1 million vehicles (2008: 2.03 million) are expected by year's end. The conventional turnover in Bremen is also 40 percent lower than last year. Aden says, "As the turnover of goods shipped by sea plays a major role in our corporate group, the crisis is naturally having a big impact on the company results. The successful business fields, such as trade logistics, are nowhere near enough to compensate for the declines in the turnover of goods shipped by sea."
BLG is also noticing the crisis to varying degrees in international business. In Poland, Slovenia and the USA, the company has not been so badly affected, and in Brazil, India and Malaysia basically not at all. At the car terminal in Italy, on the other hand, the situation is as problematic as in Bremerhaven. In Slovakia and
the Czech Republic, BLG is only slightly below the planned level. In South Africa, the slumps were able to be largely compensated by new deals. Aden believes the markets in Russia and the Ukraine to be in a very difficult position. But they are growth markets of the future. Eastern Europe thus remains an investment focus.
Aden adds, "At our annual meeting as part of the Central Association of German Seaports, we recently submitted an estimate for the total turnover of the German seaports. After a 16 percent decline in total turnover this year, the 2010 volume could increase again by three percent. With growth rates like this, we will need four or five years before we can reach our record level of 2008 at our seaports again."

Saving measures, market offensives and investments
BLG wants to overcome the crisis years with a dual strategy of savings and market offensives. For the 2009 financial year, the company had given a guarantee of existence for all our core workplaces. This is set to be maintained in 2010 wherever possible. According to Aden, the motto is solidarity: "If all staff member give
something, then everyone can gain confidence for the future. To achieve that, the Central Association of German Seaports, along with the ver.di trade union, is negotiating a temporary collective crisis agreement, which may take effect from April 2010. All internal possibilities will similarly be utilised to discuss savings
with the workers" councils and ver.di within BLG. The negotiations are set to be concluded by the end of the year. However, BLG still wants to continue investing.
Aden says, "It is strategically important to keep investing in the future despite the crisis, because the globalisation process, with its growing international division of labour, is still continuing, just at a more cautious rate at present."
To protect business in current force and gain new deals, BLG wants to improve its cost structures, and is striving for cost leadership in the industry. With comparable quality of logistics services, it is ultimately only the price that counts on the market, and that is why the struggle is particularly hard during times
of crisis. For 2009, BLG expects pre-tax earnings of between 10 and 15 million Euros (2008: 84 million). For 2010, Aden is hoping for between 30 and 40 million Euros.

(Source: Port News)