Leading logistics service provider looks back on a year of opportunities and challenges.
Germany is in a recession. L.I.T. also feels the effects of the downturn, yet has implemented further major projects this year. Our Executive Board reports on the challenges and opportunities facing the group in an interview.
2023 was not an easy year economically for companies in Germany. How did L.I.T. fare, Mr. Fels?
Fokke Fels: When we look at the first half of the year, we are very satisfied with our figures. This was particularly due to the fact that 2022 was simply overheated. Although we started the year comparatively weaker, we were therefore able to optimally access and deploy our resources. No question: The recession that has developed over the past months has not left us untouched either. The construction industry has been stagnant for a long time, and demand in the Automotive sector is also falling, which is only understandable when people have less money available. At L.I.T., we have always seen such phases as opportunities. For example, we benefit from lower costs in our investments, which result from the slowdown. Therefore, we remain courageous in the market!
You have already mentioned the Automotive industry. Due to the downturn, demand is also decreasing, and the number of transports has also reduced over the course of the year. However, two companies within L.I.T., Automotive Solutions and Air & Sea, are developing very positively. Why?
Simeon Breuer: It is true that the two units within our group are developing counter-cyclically and against the trend, which naturally pleases us. Both have the courage to make decisions even in difficult situations. Automotive Solutions has already overcome its first challenging months – including the semiconductor shortage or factory closures – as we founded it during the Corona pandemic. However, it has developed excellently and only expanded to Regensburg this year. Our goal is to be present in close proximity to our customers. We are now represented at seven Locations. That is very impressive for such a short time.
And Air & Sea will also take the next steps. In addition to establishing organizational structures at existing Locations, we are focusing on other countries to open up new markets and offer our customers a comprehensive product portfolio. We will soon open branches in India and China.
One of the major topics in 2023 was and remains the decided increase in truck tolls. As a Transport Logistics provider with more than 1,400 towing units on the road, this change affects you massively.
Ingo Schreiber: Definitely. We have already said during the year that we consider the toll increase at such an economically challenging time to be counterproductive. While we support efforts towards greater Sustainability in the transport sector, in this form, many companies will find it very difficult and will face economic difficulties, as considerable additional costs will be incurred by the Transport Logistics industry. Nevertheless, our successful strategy of many years is also evident here. We are resilient and always look for new ways to offer and expand our services.
You are hinting, among other things, at the block train between Osnabrück and Heilbronn.
Breuer: We see no transport transition without intermodal transport. Therefore, we have been successfully putting projects on rail for years and will continue to invest heavily in them. As a Transport Logistics provider, we contribute significantly to climate change, so it is our obligation to enormously reduce our CO2 emissions. For one of our customers, we have been successfully realizing factory supply in Emden for several years with our joint venture, SmartRail Logistics GmbH. We have looked for ways to handle as many runs as possible by rail. With the block train on the route between Heilbronn and Osnabrück, we succeeded in doing this together with our customer. While such projects also require existing infrastructure, intermodal and multimodal transports are nevertheless elemental to our strategy.
You have also implemented several projects in the area of warehouse logistics in recent months. What makes them so special?
Julian Lachnitt: In addition to the groundbreaking ceremony for our own logistics property in Bassum in the district of Diepholz, we will also gain a foothold in Great Britain with our warehouse logistics solutions. For this purpose, we have rented a property in the Midlands, the logistics triangle there. This is a very exciting project because the British market is completely different from the German one, and it is more difficult to establish something there for the first time.
In what way?
Lachnitt: Just the conversions from pounds per square inch to euros per square meter is an issue we do not have to deal with in EU countries. Also, the framework conditions have become more difficult due to Brexit. But: The United Kingdom is an attractive market. Therefore, we need colleagues on site who know the market and its peculiarities. Great Britain as a consumer market is a great opportunity for us.
Finding the right employees is not just an issue for Great Britain. This year, almost 45 apprentices started at L.I.T. again. Do you feel the shortage of skilled workers?
Lachnitt: It is true that we were able to fill every vacant position this year as well. Nevertheless, the effort involved is now enormous. Our HR department is doing significantly more advertising to fill vacant positions – and this applies not only to apprentice positions. In Personnel Logistics, too, we are always looking for new colleagues – especially in the area of truck drivers and warehouse employees. One possibility is to rely on so-called driver hubs for certain intermodal transports, so that we can make the profession of truck driver more attractive again. For the pre- and post-haulage, we use trucks, while the main haulage is handled by train. This creates more regular working hours for our personnel. Currently, we are well positioned, which we owe to our dedicated team. But we will have to make even greater efforts in the future to maintain this situation.
Let's take a final look at 2023: What were the lighthouse projects from your perspective?
Breuer: We are particularly proud of the good start of Automotive Solutions. Despite adverse circumstances, the company has developed excellently and has been able to generate significant added value for our Automotive customers. In the course of this, we launched a trailer yard in the Port of Hamburg for a renowned customer at the beginning of the year. This customer is completely satisfied with our work. Recently, we started a second block train there to further improve the supply of production plants and at the same time act more sustainably.
With all the challenges: How do you view the year 2024?
Fels: Cautiously optimistic. I assume that the economy will pick up speed again over the course of the year. Because forecasts predict a renewed increase in Germany's gross domestic product. This will not be evident from the start, but may last until the second half of the year. But I am convinced that we will emerge from this “trough” in which companies currently find themselves. Therefore, we will continue our proven growth strategy and make acquisitions to further diversify our services and grow organically. Also in 2024, we will continue our motto “Together for Success” and, together with our colleagues, do everything to ensure that L.I.T. continues to operate successfully and courageously in the market.