Duisburg Indiscriminately, at least that’s what it seemed at first, the Westphalian transport company Rhenus has made several purchases in recent weeks. The shopping spree with the Danish forwarding and warehousing company DKI started in mid-November. A month later, it hit Robert Schmitz, a blacksmith shop and cold-rolling logistician in Hagen.
Shortly thereafter, the secretive transport company acquired almost half of the Portuguese furniture home delivery company Grupo Totalmedia with 650 employees. And at the turn of the year, Rhenus took over a silo transport company in the Netherlands.
To date, the subsidiary of the Westphalian family empire Rethmann has gathered more than 800 companies around it. CEO Tobias Bartz announced the result to the Handelsblatt: “In the past financial year, we posted sales of 8.8 billion euros.” This makes the company from Holzwickede very likely the largest German logistics group without state participation.
Only Deutsche Post/DHL, Deutsche Bahn and the shipping company Hapag-Lloyd, in which the Hanseatic City of Hamburg has a stake, achieve even more powerful revenues. In 2021, Rhenus was still level with Dachser with sales of 7.1 billion euros, but is now likely to have overtaken the competitor from Kempten in view of the enormous growth. The Allgäu have not yet presented figures for 2022.
“At the moment I’m making an acquisition almost every two weeks,” says Bartz, who started as a trainee at Rhenus in 2006 and has been managing the company for ten months. The takeovers are usually organized by Rhenus managers in the operational business areas, reports the 45-year-old from Wuppertal. “They know their way around the companies and understand the market.” And so Rhenus, which belonged to Stinnes AG in 1998 with a turnover of just 400 million euros, is growing steadily.
The necessary money for this expansion course is available. “Our shareholder allows us to fully reinvest the profits,” explains Bartz. However, he only reveals that they are “above the industry average”. The overall Rethmann group, to which Rhenus contributed a third of the revenues, generated a return of 4.8 percent in 2021 with its operating result (EBIT) of one billion euros.
The result is an unusually wide spread of activities – even for a family company. Rhenus now owns freight forwarders and warehousing companies in New Zealand, South Africa and India. Westfalen operates port terminals at 52 locations, including in Rotterdam and Cuxhaven. In addition, there are around 1000 tugs and barges on Europe’s waterways – and recently five coasters, which were used to bring rotor blades for wind turbines from India to Germany, among other things.
The group, which grew rapidly to 42,000 employees, apparently accepted a weakness: on employer rating platforms such as Kununu, supervisors in the group usually received unflattering marks for their management behavior.
Axles for the Corvette, charging net for Shell, warehouse logistics for BMW
Last April, Bartz set about better marketing Rhenus’ confusing offer. First, he promoted Air and Sea Freight Manager Tobias König to Group-level Chief Commercial Officer to drive cross-selling. Since then, König’s team has been tasked with introducing selected major customers to additional company services – and thus further increasing Rhenus sales.
What these services look like can be seen at numerous points in the extensive company empire. In the USA, for example, the Rethmann offshoot produces front axles for Chevrolet’s legendary sports car Corvette, and in Regensburg, Bavaria, they have been responsible for BMW’s warehouse logistics since 2014. Together with Shell, Rhenus is currently setting up a charging network for electrically operated trucks. At the same time, the Westphalian logistics company controls its own locomotives and railway wagons across Europe.
The location and the company are on the upswing thanks to nearshoring.
(Photo: Frank Elschner)
From Bartz’s point of view, the extensive acquisitions – including those of specialist companies – have long been a stroke of luck. Because numerous manufacturers have relied on regional procurement markets since Corona, Rhenus’ inland waterway vessels, rail transport and regional logistics hubs offer a considerable competitive advantage.
Right at the beginning of the pandemic, global supply chain problems arose due to the temporary shutdown of container ships, the closure of Asian ports and strong fluctuations in consumer behavior in Western countries.
Steel boxes stayed in Chinese ports for weeks, department store shelves emptied. As early as mid-2021, 34 percent of supply chain managers said in a survey by the consulting firm McKinsey that the development of regional supply chains would be “relevant” or “very relevant” for their company in the next three years. Another 42 percent thought it was at least “partially relevant”.
Toys, household appliances, clothing – nearshoring is a trend
The effects have long been felt. The German-Polish Chamber of Industry and Commerce reported that in the first half of 2022 there were just as many investor inquiries from Germany as in the entire previous year.
The US retail giant Walmart provided 350 billion dollars to make itself more independent from Asian manufacturers of toys, household appliances or textiles through so-called nearshoring. Several battery production plants are being built in Europe for the same reason. And at the Frankfurt Textile Fair last summer, the Bielefeld sewing machine manufacturer Dürkopp Adler reported that a significant number of fashion suppliers are currently building factories in Europe, North Africa and the Middle East in order to reduce the risk of fragile supply chains from the Far East.
Rhenus believes it is well prepared for this. “From the port of Duisburg, for example, we maintain train connections to the Czech Republic, Budapest, Hungary, Austria, Poland and Italy,” reports the CEO. The ports of Antwerp, Rotterdam and the brand new Wilhelmshaven have also been connected by train.
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Bartz describes Turkey as one of the main growth markets, where Rhenus is active at 14 locations. Emerging countries such as Georgia and Azerbaijan, which are on the so-called “Middle Corridor” of the New Silk Road to Central Asia and China – the southern bypass of Russia – can also be reached from there by freight train and truck. “Here there is a market of more than 90 million people,” enthuses the logistician.
Rhenus has provided a special team to get a grip on the effects of the Russian war of aggression against Ukraine on supply chains. “It develops transport solutions in strict compliance with current regulations and compliance,” affirms Bartz. National and international authorities are involved. The head of the company knows that violations of sanctions would have devastating consequences for his company and its customers.
More: Nearshoring – Turkey is becoming the vanishing point for German companies