DB Schenker wins five-year Shell Australia contract

DB Schenker, the transportation and logistics arms of Deutsche Bahn, has been awarded a five-year contract to provide international freight forwarding and customs clearance services to Shell Australia, using its global network of specialised Oil and Gas offices.
The operations team in Brisbane, Darwin and Perth will be supported by DB Schenker’s iTeams software, which enables visibility and tracking through the logistics cycle.
“We are proud to continue our global relationship with Shell in Australia to supply both QGC (Queensland Gas Company) in Queensland and the Prelude FLNG (Floating Liquefied Natural Gas) facility in Western Australia with international freight and customs clearance services,” said Frank Vogel, Director Projects – Oil & Gas, Australia/New Zealand.
“With our dedicated people around the world we have a strong record of operating safely and efficiently even on the most remote sites. This contract will support our goal to become the market leader in the industry by 2020.”
 

DB Schenker to acquire NZ firm SB Global Logistics

DB Schenker and SB Global Logistics have entered into a definitive agreement under which DB Schenker will acquire SB Global Logistics from 24 September 2017.
“DB Schenker NZ has enjoyed a 20-year relationship with SB Logistics, from which we have seen both companies grow together off the back of mutual respect and confidence in service,” said Mark Harrison, Director – New Zealand, DB Schenker AU/NZ.
“This relationship has endured through many challenging global climates, always showing resilience and trust in achieving the foundations of our agreement.  The backbone of this relationship has led us to today, where we begin our process of merging the two organisations with absolute confidence given our extensive knowledge of how each work.”
Stephen Bateman, Director, SB Global Logistics added, “This purchase has been well thought out with due consideration to the future of SB Global Logistics business, staff and customers.
“SB Global Logistics Christchurch has grown over the past 27 years to become a well-respected and trusted organisation. This is a credit to a team of people who have shown tremendous dedication and resilience, and always striving to achieve a high level of service.”
The operations of SB Global Logistics Christchurch will continue ‘business as usual’ under its new owner, DB Schenker, and its management team will remain in the business to ensure a smooth transition.

DB Schenker open $8.5m logistics distribution centre

DB Schenker have opened a new $8.5m distribution centre in Altona.

The Schenker Australia facility, opened by Victorian Minister for Public Transport and Roads, Terry Mulder is a specially adapted eco-friendly building doing its part in reducing CO2 emissions.

Eco-friendly features in the new logistics distribution centre include low emission T5 lighting, an innovation that is expected to save emissions equivalent to the output of 13 residential homes annually, in addition to rainwater harvesting.

Schenker Australia CEO Ron Koehler explains that the T5 fluorescent lighting installed at Altona is one of the smartest options around as an alternative to LEDs, offering comparable energy savings and low cost replacement parts. The new facility would also harvest rainwater to deliver significant savings similar to one of the company’s other centres in Tullamarine.

Mulder applauded the state-of-the-art facility and said supporting innovation and growth for the freight and logistics sector is a high priority for the Government.

He added working with industry to deliver more sustainable businesses is one of the key themes of the Coalition Government's recently released Victorian freight and logistics plan. 

According to Koehler, Schenker Australia has consolidated two other distribution facilities at Sunshine to make a significantly larger Distribution Centre that allows for growth and is located closer to major roads and port facilities.

At optimum operation it will employ 30 staff, including some locally-sourced casual positions. 

Altona becomes the fifth largest site in the Schenker Australia network. The 18,000m² logistics centre operates eight recessed docks and a 2,000m² awning, allowing transport and logistics operations to co-exist on the one site safely and efficiently. 

Schenker Australia is the local arm of DB Schenker, the world’s second largest transportation and logistics service provider based on sales and performance. The company is in its 51st year of Australian operations.

Troubled times ahead

Australia’s business executives are anticipating a bleak September quarter as high fuel prices, continued inflationary pressures and slowing consumer spending hurt sales and profit margins.

The latest Dun & Bradstreet (D&B) Business Expectations Survey reveals that businesses are expecting a steep decline in sales, profits, employment growth and capital investment, with all of these indexes now in negative territory.

This comes on the back of an increase in the number of executives reporting negative impacts on their business due to soaring fuel prices (climbing 21% since March to 82%) and more organisations being hit by a slowdown in consumer spending (up 2% in one month to 38%).

Supporting expectations that inflationary pressure will continue throughout the year, the selling prices indicator has risen five per cent to an index of fifty. Despite the increase, the index remains lower than four of the last five quarters, now fifty seven per cent of executives expect to raise selling prices in the September quarter.

Reflecting poor results in the March quarter, expectations for sales growth have dropped 33 points from December quarter highs. Forty per cent of firms saw a decrease in sales in the March quarter and the same percentage of executives anticipate a fall in sales in the coming quarter. Nondurables manufactures have been particularly hard hit, with the actual sales index falling 45 points from the December to the March quarter. Despite being the only industry with a positive actual sales index for the March quarter, durables manufacturers have also reported a negative outlook for September quarter sales.

Profits expectations have also fallen sharply, down 29 points since the December 2007 quarter. This decline in expectations is a reflection of poor March quarter results, particularly for nondurables manufacturers and retailers.

The employment indicator has hit its lowest level in 17 years. Twenty per cent of executives expect to have fewer staff in the quarter ahead than they did a year ago while just 10 per cent expect to increase employee numbers.

A significant weakening in capital investment expectations has resulted in the overall index dropping to minus six however durables manufacturers remain just inside positive territory at an index of two.

According to Christine Christian, Dun & Bradstreet’s CEO, the impacts of a slowing economy combined with high petrol prices are impacting executive expectations for the September quarter.

“Poor results in the March quarter combined with continued pressures from inflation, the credit market, high fuel prices and slowing consumer spending have led the steep decline in executive expectations for the September quarter,” said Ms Christian.

“The business community is now anticipating a rapid slowdown in activity in the coming months.

“Adding to the list of challenges, better than expected GDP results for the March quarter have fuelled speculation regarding the need for a further rate rise. Any further increase in the cost of credit will likely add pressure to a number of businesses, with SMEs likely to feel the greatest burden.”

Up nine per cent since the previous survey, credit market turmoil continues to represent a significant concern. Two thirds (67%) of firms surveyed indicated that a tightening credit market will have a negative impact on operations in the coming quarter. Ten per cent anticipate a very negative impact.

Despite the RBA keeping interest rates on hold for the past three months suggestions that rates may need to rise again to contain inflation are evident in executive concerns, particularly in the retail sector. Almost half of firms surveyed (47%) rank interest rates as the most important influence on operations in the new financial year, this jumps to 57% for retail executives.

Fuel price concerns have increased as petrol prices have continued to rise. Twenty five per cent of executives now rate the cost of fuel as the most important influence on the business in the year ahead. Meanwhile wages growth concerns have risen nine per cent to be on par with fuel prices.

According to Dr Duncan Ironmonger, Dun & Bradstreet’s economic consultant, the Australian economy has started to slow.

“Last week’s March quarter GDP numbers confirm the start of an economic slowdown. Although income tax cuts in the Federal Budget will provide some stimulus, interest rates and credit will remain tight for the remainder of 2008,” said Dr Ironmonger.

“The Reserve Bank left the cash rate unchanged at its last three meetings however it could make a further increase if demand does not continue to moderate or if expectations of continued high inflation begin to affect wage and price setting.

“Tight monetary conditions, high petrol prices and low consumer sentiment should continue to dampen consumer spending and housing construction through the next few quarters.”

The D&B index for expected sales is down 28 points to -13, with 27% of executives expecting an increase in sales and 40% expecting a decrease. The profits index is down 20 points to -17, with 23% of executives expecting profits to rise and 40% expecting a fall.

Employment expectations are down 14 points to an index of -10, with 10% of executives expecting an increase in staff and 20% expecting a reduction. Capital investment expectations are down 12 points to an index of minus six, with 9% of executives expecting an increase and 15% expecting to cut spending. Inventories expectations are down 10 points to an index of -10.

The selling prices index is up five points to an index of 50, with 57% of firms expecting to raise prices and 7% expecting to decrease them.

 

Businesses to greet a gloomy Christmas

The weak Australian dollar, high petrol prices and continued inflationary pressures will continue to hurt Australian businesses, the latest Dun & Bradstreet (D&B) survey has shown.

The new business expectations report indicated a bleaker outlook for the December quarter, with nearly half of all executives reporting the dramatic 20 per cent fall in the value of the Australian dollar since July had worsened their business environment.

Almost 70 per cent of executives anticipate a negative impact of the tightening credit market on their operations, while oil prices continue to pose one of the biggest challenges, with 93 per cent of executives reporting they have negatively impacted their business.

The December quarter is expected to bring a sharp fall in sales, profits, employment growth and capital investment, with all of these indexes in negative territory for the second consecutive quarter.

Selling price expectations are the only exception, projected to hit the highest level in 20 years, an index of 62, following an increase of 11 per cent.

D&B CEO Christine Christian said while business confidence for the coming quarter was set to drop to levels not seen since the 1990s, Australia was better situated compared to other countries amid the current global financial turmoil.

“Australian businesses are undoubted facing some very real challenges, “Ms Christian said.

“Profit margins are being eroded by a slowing economy and escalating funding and goods costs, while the decline in the Aussie dollar is forcing businesses to pay more for their imports.

“However, Australia’s outlook continues to be stable at a time when the economic conditions in many countries are deteriorating very rapidly. Another move by the Reserve Bank to cut interest rates should be received positively by business given its likely positive flow-on effects on spending and investment,” she said.

More bad news for business

D&B expected sales and profits indexes (yello line: profits; blue line: sales)

Australian executives predict business conditions will further deteriorate in the September quarter affected by a slowing economy, spiralling fuel prices and toughened credit conditions, a survey shows.
 
According to the latest Dun & Bradsheet (D&B) Business Expectations Survey, fuel prices have hit businesses hard with almost 90 per cent of participants indicating they have had a detrimental impact on operations, a 28% increase in three months. 32 per cent of firms have noticed a downturn in consumer spending in the past three months and 21 per cent have been negatively affected by the strong Australian dollar.
 
Credit market conditions represented another significant concern. Two-thirds of firms participated indicated that a tightening credit market will have a negative impact on operations, with 11% anticipating a very negative impact.
 
The September quarter is also expected to bring a steep decline in sales, profits, employment growth and capital investment, with all of these indexes now in negative territory.

Sales and profits growth expectations have fallen sharply, down 36 and 33 points respectively from December quarter highs. Capital investment expectations have dropped 13 points to an index of minus seven, with employment growth expectations at the lowest point since June 1991.

 

As an exception to the deteriorating conditions, selling price expectations have climbed six points to an index of 51.

 
D&B CEO Christine Christian said continually escalating costs are eating away the profit margins of Australian businesses.
 
“Fuel prices are continuing to soar, interest rates remain steady but high and consumer spending is dropping away – all of these factors are squeezing the profit margins of Australian businesses," she said.
 
“Executives face challenging decisions about how to manage these costs. Moves to increase prices will likely be met by customer backlash however as costs continue to rise and margins get thinner, failure to pass on these costs will have detrimental impacts on profitability.”
 
The company’s economic consultant Dr Duncan Ironmonger said the economic slowdown in Australia is happening quickly.
 
Bureau of Statistics data for May reveal very weak growth in retail sales and a further decline in the number of new dwelling approvals. The small boost from income tax cuts starting this month will do little to boost consumer sentiment and spending in an environment of high food and petrol prices and high interest rates," he said.
 
  • The D&B index for expected sales is down 31 points to -16, with 25% of executives expecting an increase in sales and 41% expecting a decrease.
  • The profits index is down 24 points to -21, with 22% of executives expecting profits to rise and 43% expecting a fall.
  • Employment expectations are down 15 points to an index of -11, with 10% of executives expecting an increase in staff and 21% expecting a reduction.
  • Capital investment expectations are down 13 points to an index of minus seven, with 8% of executives expecting an increase and 15% expecting to cut spending. Inventories expectations are down nine points to an index of minus nine.
  • The selling prices index is up six points to an index of 51, with 58% of firms expecting to raise prices and 7% expecting to decrease them.
 

Bleaker picture for the coming quarter

A latest business expectations survey has painted a bleaker outlook for the December quarter, with sales and profits growth expectations projected to fall further affected by the continuing high oil prices.

The survey, released by Dun & Bradstreet (D&B), indicates all indexes except selling prices will remain in negative territory for the second consecutive quarter, with 47 per cent of executives rate petrol prices as their primary concern, climbing to the highest level in 16 months.

In the June quarter, 43 per cent of businesses experienced declining sales and almost half of executives anticipate further decline in sales in the quarter ahead. The actual sales index for retailers has been hit the hardest, falling 52 points from the December 2007 to the June quarter.

The report also shows a similar picture illustrated by profits expectations, with 50 per cent of executives anticipating a decline in profits in the December quarter. 13 per cent of executives expect a decrease in capital investment, while just seven per cent anticipate an uplift.

D&B’s CEO Christine Christian said business confidence has fallen away dramatically as the economy continues to slow.

“The expectation of business executives have continued to fall, with sales and profits expectations particularly hard hit,” she said.

“These indices have fallen for two consecutive quarters, a trend driven largely by declining sales and profits results and continually escalating business costs.”

Meanwhile fuel prices continue to exert a detrimental impact on operations with nine in ten executives reporting that fuel costs are hurting their business, a 28 per cent increase since March.

The situation is expected to worsen, as 47 per cent of executives rate the cost of fuel as the most important influence on operations in the coming quarter.

“With the economy expected to slow further at least in the short term, businesses need to be particularly diligent about managing their operations to ensure they remain financially stable throughout the challenging conditions,” Ms Christian said.

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