Global Logistics: Germany's Role in Europe [PODCAST]

Written by Expeditors
23 minute read

Global Logistics- Germanys Role in Europe_Horizon

Germany's attention to detail and precision can be found in the country's culture, exports, and in the case of this episode, logistics and infrastructure. Regional Director of Germany, Ben Eidenschink, and Regional Manager of the Automotive Vertical in Europe, Juergen Adler, talk about the history of trade in Germany. They'll also talk about how its strong automotive legacy hints at the larger role Germany plays in Europe's logistics.

 

Chris Parker (Host):
Hello everyone, and welcome to the Expeditors podcast, where you can hear about front-of-mind topics on logistics and freight forwarding industry, through the lens of a global logistics provider. I'm your host, Chris Parker, and today's topic, Germany's role in Europe. Known for their engineering, precision, efficiency, and beer, Germany is the number four economy in the world and also the number one choice for logistics in Europe. I've invited the regional director of Germany, Ben Eidenschink, and regional manager of Europe for the Automotive Vertical, Juergen Adler, to talk about Germany's history with logistics and how it's grown to be a key component in Europe's overall logistics framework. Hello, [German 00:00:54] podcast. How are you guys doing?

Ben Eidenschink: [German 00:00:56]. Happy to have us, Chris. Thank you very much for being a part here.

Chris Parker: You're going to have to translate that part for me. I only went through Google translate for my greeting.

Juergen Adler: Thank you very much for inviting us here to this interesting podcast. But since I'm coming from the south of Germany, I would say [German 00:01:14]. That's the Bavarian expression of saying, "Hello." Having a good chat today.

Chris Parker: Yeah, I'm excited to talk about this. Tell me a little bit about your day-to-day right now, at least for this past year. Ben, let's start with you.

Ben Eidenschink: A lot of home office, like everywhere in the world right now.

Chris Parker: Sure. Sure.

Ben Eidenschink: I think the entire world is challenged with that pandemic. Here in Germany, the same. Working through it, working hard. I hope it's opening up again. We really miss traveling, like everybody does.

Chris Parker: Yeah, absolutely.

Ben Eidenschink: But, yeah, working through it.

Chris Parker: And Juergen, how about you?

Juergen Adler: I think after more than a year being in the home office, as Ben mentioned, at least myself, I've been used to the day-to-day home office life. Right? Rearranging ourselves, besides the travel, with bringing the kids to kindergarten and so on, and the restrictions we have given every other week.

Chris Parker: Sure.

Juergen Adler: But other than that, I think we are at least doing quite fine, I would say.

Chris Parker: Good, good, good. Well, let's get to know you two a little bit more before we hop into today's topic. Ben, I'm going to start with you. What's your role or responsibilities around regional director of Germany? What do you do?

Ben Eidenschink: Actually, I'm responsible for all operations and infrastructure in Germany, logistic-wise of Expeditors, and being responsible for the development and further growth of Germany in a logistics standpoint.

Chris Parker: What's a little bit about your background? How has your journey been with Expeditors up until becoming regional director?

Ben Eidenschink: Actually, I'm very lucky to work with Expeditors for now over 18 years.

Chris Parker: Wow, congratulations.

Ben Eidenschink: It was quite a journey. Started in Germany back in the days, had great opportunities along the way. My background is a little bit on sales and account management. I worked in the automotive industry for a couple of years, actually in Austria, and then turned into the US, also with my background of automotive. That really helped. I think we will talk about that today, a little bit more. And then was ten years district manager in Munich and also in Frankfurt, before I got the opportunity to take the regional role in Germany.

Chris Parker: Wow, congratulations. That's awesome. Juergen, let's switch over to you. You're a recent addition to the Expeditors organization. What's your history before Expeditors, and what do you do now as regional manager for the Automotive Vertical in Europe?

Juergen Adler: I think I call myself always a baby of logistics. Why? Because I'm coming actually from a logistics family, because also my father has been in logistics, working for many years in a logistics company. That's how I get interested in this profession, right? But otherwise, than my father, I'm more interested in the automotive and mobility part, which I find myself very exciting because every day is different. Right? Why is every day different? Because that's how automotive is working, right? Inventing new cars, inventing new logistics programs, and how do you improve supply chain studies? I think my world, in all my almost 27 years in logistics, automotive was the most interesting part in it, right? And the longest part I've been working with, right?

Juergen Adler: Yes, I joined Expeditors about two years and nine months, almost turning three years now in this June. And I feel like home already. Why? Because it's just so easy and so welcoming, right? To work here. What I'm doing here with my day-to-day job is actually helping our colleagues, improving and getting the knowledge of automotive. Right? Because we know in the automotive world, we talk a different language, right? We're using special words in terms of transportation, which is not common to other industries. So I'm trying to give my knowledge to the teams so that they can better understand how automotive car manufacturers or suppliers are working.

Chris Parker: Well, thank you so much. Okay, let's go ahead and talk about today's topic, and that is Germany's role in Europe. Ben, I'm going to focus on this next couple of questions on you. Let's start with the history. What is Germany's relationship to trade and logistics, and how has this persisted over the centuries?

Ben Eidenschink: Actually, let me start a little bit about the culture and the background in Germany. Germany was always known as the country of poet and thinker if you would call it. And that was always a great platform for developers, scientists, researchers, very visionary people that grew in Germany. So if you look back, many great discoveries and inventions are originated and started in Germany. Just to name a few, if you're looking at Johannes Gutenberg, who invented the letter print with the first Bible, already in 1400 – or looking at Werner von Siemens, 1867, inventing the Dynamo, one of the electronic first engines, right?

Chris Parker: Wow.

Ben Eidenschink: But also other many invention came from Germany with TV, telephone, chip cards, MP3. So it is long in our history with many diversity in the industry and verticals. Mr. Rontgen invented the x-ray in Germany or the aspirin. Many of us probably used it on some Sunday mornings. It's invented in Germany. And you could see that many of this has roots in still many traditional German brands, especially on machinery and production industry and manufacturing. Many brands groom from there. But it is not only that, right? It's chemicals, pharma, electrical, consumer goods, aviation, machinery, steel, and metal. All of these products have a big history in Germany and grew here. I think that's a fundament of trade Germany started.

Ben Eidenschink: Combined with that, and you mentioned at the beginning, Chris, and maybe it matched to the aspirin, we also invented the beer. Right? Which is, I think, one of our best exports ever. But with that, we also came up with the German purity law in 1560. Meaning by that, a lot of our invention was always based on quality, compliance, and controls. And I believe that's also a little bit in our culture, that we want to do it right.

Chris Parker: Sure.

Ben Eidenschink: And control it as well, so setting up high standards. We also, and I think we will talk about that today, the big convention of Gottlieb Daimler, who invented the car and motorcycle in 1887. I think Juergen will come up on that a little bit more later. But sure, that was a big one. And for sure, not only that, we also established with that, the infrastructure with it. We started the Autobahns that you can drive a car on it.

Chris Parker: Sure.

Ben Eidenschink: But also on factories. We now read a lot in the current press about gigafactories. That's like the theme of the word. But looking into the industry, Volkswagen still has the biggest gigafactory on earth. And that started in 1938. So just showing a little bit where we came from, I believe, which brought us into that big trade exporter and production industry nation.

Chris Parker: What about now? What does Germany do for Europe? It has this incredible abundance of exports and stuff. How is it able to effectively push that out throughout Europe and the rest of the world, really? It almost sounds like Germany is a real gateway into Europe for the rest of the world. How did that come to be?

Ben Eidenschink: Okay. I believe the trade and logistics is in our DNA. So if you look a little bit back in history again, already in 1400, the Hanseatic League started the international trade with a German union of businessman who were focused on trades and foreign countries, with already a very strong local port infrastructure and the first ocean routes, right? That really results in growing trade and growing wealth in Germany. That continues to develop into a rail system, starting in 1800. We always were focused on producing and then also exporting-

Chris Parker: Right.

Ben Eidenschink: ... and trading with other countries. So combined with that mentioned existing industry diversity, I would say, leading innovations and that growing infrastructure, I believe we were also getting onto the next level when in 1952, we started the original European Union. At that time, it was called Montanunion, but that was actually the ground for the European Union, also for trade agreements and for foreign trade.

Chris Parker: Was Germany already in a good position then to, I guess, meet the needs of this new European Union that was starting to rise? Or did it have to work to become this, I guess, this icon of logistics that we see today?

Ben Eidenschink: I think as a founder, we already were a really solid base to get it started with our partners. And I believe; also, this is still today. I would call Germany as one of the strong motors of that European vision.

Chris Parker: From the mid-'50s, when this union was starting up until now, there's been numerous global events and changes, and demands, disasters that have happened. How has the European Union been able to stay strong, I guess, with their logistics throughout all these major events?

Ben Eidenschink: That's a great question, especially because so much stuff is happening, right?

Chris Parker: Sure.

Ben Eidenschink: But as I just mentioned on the economy power and influence of Germany, and holding to that European Union, we walked through a lot of challenges, right? But keeping that focused and also standing our ground in the other world of the industrial nations, I believe Germany still represents the vision and direction, even through all this setbacks and challenges we see, if it's the Brexit or if it's the economic crisis. What is a key element of that? I believe is the consistency that Germany has all over that centuries. And I believe also, one of the big achievements is that continuous growing wealth in Germany, that also supports and protects the wealth of Europe. And I think one great achievement, it'S not even in trade. We achieved peace. I need to mention that. It is one of the biggest achievements of the European Union that we were able to build a union and community in peace and growing trade.

Chris Parker: That's from a cultural aspect that you're talking about, about Germany's vision, this culture of consistency. What about the actual hard infrastructure about it? What makes it an ideal country? Whether it's the location of it, its size, population, that makes it the ideal country to support the rest of the EU.

Ben Eidenschink: I believe you just mentioned one. It's the center of Europe, which is-

Chris Parker: Sure, yeah.

Ben Eidenschink: ... geographically, just a perfect spot with ports in Hamburg and in Bremen that are really strong. It is very high developed on inland waterways. So looking at a port of Duisburg who is the biggest domestic port of the world, and a very large connection of really reliable Autobahns, as I said. I hope you can drive one.

Chris Parker: I hope to, one day. Some day.

Ben Eidenschink: There're no speed limits. For trucks, yes. And also, if you're looking at the air freight hubs that we have, strong airports, for sure, with Frankfurt in the middle of it being number one for freight. Hamburg, as just mentioned, third biggest port in Europe. We have strong railways connected to that. The entire infrastructure of that combination makes it a really strong location. On another point, I believe, is the compliance setup or the security that Germany gives, right? It's a very safe environment to do business. It's a stable economy; it's a stable government and politics, and a reliable infrastructure. I believe that in these days as well, is a very important point for doing business in Germany.

Ben Eidenschink: So Germany has also established a very stable, long and strong economy history. We are still number one economy in Europe and number four economy globally. Just to compare that a little bit with the US, maybe, right? Being one of the tops with 328 million people, Germany is from a scale, I think, 28 times smaller than the US. And we have only 83, but very productive and efficient, I would say, in that economy growth. And I believe in a combination with a high culture of quality, trust, and consistency; that is what makes Germany so attractive.

Chris Parker: Absolutely. Another thing that makes Germany attractive is the cars. So, Juergen, I'm going to switch over to you. Talk about automotive. Obviously, Germany has an incredible legacy with cars, and this history has been full of change. Could you talk a little bit about that legacy and Germany's role in the success of automotive?

Juergen Adler: Yes. Sure. As Ben mentioned earlier already, it goes back to the year 1887, where a gentleman called Karl Benz invented actually the first combustion engine, together with Nicolaus Otto. So they were two gentlemen who basically invented the whole car, what we see today in the German space. Right? And from that, Mr. Benz fitted this engine into a car frame, into a coach, right? Which was really the biggest invention at that early stages. That is how it started off. And given with all these years and given in 1900, Germany produced 900 cars a year. So that's going to be a little bit more than three cars per day.

Juergen Adler: If you set that into relation to today, today the most plants produce 1,000 cars per day. So you see how quickly-

Chris Parker: That's a lot.

Juergen Adler: ... is the development, right? But I think that we, Germans, used that in taking this as the leadership, right? Because out of these invention, there were other brands founded, BMW in 1916, Volkswagen came on board as well, but all companies were founded based on families. Right? So if you look at Volkswagen today, I think that's a very good example. It's still a family-owned company, existing of two families who controlling Volkswagen today, including their 12 friends.

Chris Parker: I did not know that.

Juergen Adler: And you can argue, such big company isn't a family company. But in theory, it is because this family controls, still, what will happen in the future, right? Obviously, they have a leader, but the controlling board is still the family. That is exactly the same with BMW. BMW is still owned by a family, Miss Quandt. So I think it is family ownership drove the success of the German car industry. Why? Because this family had a vision. How can we bring this? How can we grow that further? And if you see the years coming, of course, there was a disruption when we had the Second World War, and the factors were used for produce some different things.

Chris Parker: Sure.

Juergen Adler: But after the war, immediately, the car manufacturer start again, producing cars. And then they merged between each other so that the brands growing bigger. And with that long-term vision, like Volkswagen, they expanded outside of Germany, going to China, very early stages, acquiring other brands like SEAT in Spain, Skoda in Czech Republic. And then Porsche in the earlier years, they acquired as well, or they merged together with Volkswagen.

Juergen Adler: So now we have these 12 brands. And all, like BMW, did a little bit the same. And Audi was a little bit the same too. Audi is a merger between different brands. That is how Germany automotive industry became famous. One was the engineering topic, and the second was actually long-term vision. How can we make-

Chris Parker: Yeah, absolutely.

Juergen Adler: ... that brand, and sell that brand outside? The biggest success factor is export, as you know. Most of the cars are exported to different countries in the world, and that is actually saves us today. If there's any trouble in the inland economics, we still keep exporting.

Chris Parker: One of the things that's going to be challenging, I guess, this vision of German automotive is, nowadays, there's a push for gas-free vehicles. There's a number of countries that are announcing either 2025, 2030, 2050 that they want to go gas-free. How are these automotive companies going to be able to address that? And how does Germany, I guess, and their logistics infrastructure able to support this kind of change, or at least this rollout of all these new components and new products, essentially, that are going to be coming out?

Juergen Adler: That's a very good point because that goes back also to Volkswagen again, because a long time, the German car industry didn't really believe in the electrifying vehicles, because they said-

Chris Parker: Sure.

Juergen Adler: ... a vehicle needs combustion engines, which makes a sound, and the sound, which we like when we're driving on the highway. Right? So that's the German people, right? But as you know, most of the cars on German roads were diesel cars. And then the incidents came, which originated in the US actually, with the Dieselgate, right? Where brands did maybe not the right declaration, right? In terms of CO2 emissions.

Chris Parker: Sure.

Juergen Adler: And that is how, when it started, the whole industry had to rethink what they are doing. Right? And then, more slowly but surely, they began looking at electrical cars. But still, I think the car industry still is working on a different solution as well, on the hydrogen cars, because I think the German engineers think that hydrogen might become a good alternative to electric cars. So I think we're going to see a few more options coming in the next few years. But slowly but surely, everybody is trying to invent electrical cars, but not in total.

Juergen Adler: I think what we will see in Germany and in Europe is two ways of living, right? Which means actually, we will see hybrid cars, which run still with a normal engine and a battery. And we will see fully EV cars, which are mainly driving in cities for short distance. That is, I think, maybe a combination, right? And that is how the German industry is directing themselves in keep the way what they are doing because we're never successful, and we see that, and then being ready for the EV switch.

Chris Parker: With these new kind of products, or at least, you said there's essentially two kinds of vehicles that'll be out there, the hybrid and the battery, what challenges have already been identified and need to be addressed for supply chains, currently, to account for these new products that are coming out?

Juergen Adler: One of the biggest challenges, of course, is transporting lithium batteries. We all know that this is dangerous cargo, and then obviously, it becomes more difficult. And most of the batteries today are originated in Asia. So they have a long transportation way back to Europe, right? So today, of course, the capacity, especially when you have critical components, you have to fly them. And obviously, today, the capacity is not really there to transport thousands of battery packs, right? Including the restrictions, we have with the dangerous goods. So I think there's a long way to go. But on the other hand side, the automotive industry has realized that challenge, and the carmakers are now trying to force, let's say, battery manufacturers or building themselves, power plants in order to produce those batteries close to the production of the car, in order that they can avoid this long-distance transportation, which is very unstable and which makes forecasting very difficult. So I think there's two ways of seeing things.

Chris Parker: I want to try and connect this all back to Germany's approach to logistics. How is Germany's legacy and history with automotive an example of the approach to logistics?

Juergen Adler: Well, that's a good question. If you look back at how automotive industry started, way back in 8087, it started with a simple engine, right? The German engineers developed this to a state of the art product, right? And they ramped up production volume from 900 cars a year to 1,000 cars a day. That was only possible with good engineering, good supply chain planning, and top notch logistics, right? To have this top-notch logistics, called just in time production or just in sequence production, obviously ties back to logistics, which needs a very good, organized way on how to transport goods in the right manner and in the quickest way possible, to the production facility, whether it is by air freight, ocean freight or road transportation.

Juergen Adler: So everything was fine-tuned over all these years so that they can really maximize the production volume to really a quantity, which you say the thousand cars per day is an incredible volume. And that's in just in time. I think with that, logistics was developed the same way. And the infrastructure, like Ben mentioned earlier, was developed with that as well.

Chris Parker: Ben, I want to come back to you now for some closing topics here. Now that we've established how important vehicles are to Germany – when people think of Germany, they're likely to think of cars; they're going to think about beer. Why should logistics be added to that? Why should people be thinking about logistics when they think of Germany?

Ben Eidenschink: It's quite easy. We have the best cars and the best beer.

Chris Parker: And therefore, the best logistics. Because we want to get you the best cars, we want to get you the best beers. Yeah.

Ben Eidenschink: No. I believe logistic wise, Germany, as I mentioned before, is a very stable country and very stable environment with a very high developed infrastructure on ports, railways, waterways, auto, Autobahn, airports, and that central location with that knowledge-based experience, as we walked through in that podcast, on production and infrastructure history. I believe that developed in very high expertise, a very driven focus on quality and compliance, which makes it so attractive for logistics, production, and exports.

Chris Parker: There's something I noticed, as Juergen was talking about the slow adoption to electric vehicles. I know that we talked about this before, off recording, but Germans sound a little stubborn. Right?

Ben Eidenschink: You put it great. That's a great one, Chris, because I said the reliable and consistent, it works. Right?

Chris Parker: Sure. Right, right.

Ben Eidenschink: So if Germany starts something and it works. So our mentality turned into, don't touch it if it works. Right?

Chris Parker: Yeah. Hey, yeah, it's perfect.

Ben Eidenschink:
But that is also taking us to a challenge for the future.

Chris Parker: And that's what I want to ask, is, where's the room for improvement? Where do they need to improve? That's why I call out that stubbornness, really.

Ben Eidenschink: If you're talking about economy growth and the wealth that we have, I believe in that infrastructure; we just don't want to touch it.

Chris Parker: Sure.

Ben Eidenschink: In the speed of the changes in the world, we just talked about e-mobility; we are not the experts in change, I would say. Right? We need probably more time for change. We are rethinking it. We want to make sure it works first. It has the controls that it needed. It has a quality that we want to see; then we go into that direction. If we do that, I believe we do it right.

Chris Parker: Sure, yeah.

Ben Eidenschink: We do it reliable, and people can trust on, but that is probably something that is in that really fast world – something we need to learn going forward, to be better.

Chris Parker: So it's not so much that the approach is being late to the game. Everything's being considered, but you just want to make sure and test it and engineer it so that it never breaks or that it is right the first time.

Juergen Adler: Yeah. I would like to add here on the customer service side, for the automotive, for example, we are giving an extremely good customer service to our clients, right? Which means if the vehicle break down, they get immediate assistance, right? In a timely manner. So we care. That means if the battery, for example, is broken, there need to be a way to change that battery as quickly as possible. Right? And to do that, we need to study that very carefully, how this is going to be done and what are we doing with the broken batteries, right? Because we need to make sure that those broken batteries are scrapped in a CO2-friendly manner. And I think we want to take care of the environment. That also includes broken batteries, defective batteries, how to scrap them. I think that's something very important.

Juergen Adler: And to add to Ben's comments, I would also like to mention is that we calculate very carefully whether the CO2 emissions of electric cars are a saving, compared to combustion engines or not, because what we also do in our calculation, we also calculate how much CO2 emissions do you have to produce a battery, right?

Chris Parker: Oh, sure. Right.

Juergen Adler: That also fits into that. Right? And obviously, that's probably more than to produce a combustion engine. And if you add that up, is that still environmentally friendly? Right? I think we take our subjects very seriously before we start.

Chris Parker: Going back to the challenges of being slow to change but also wanting to do things right, how does Germany overcome those challenges?

Ben Eidenschink: I believe right now, we are investing a lot into digitalization, into picking up new industry, finding our way back into that innovation that we talked about here today. Right? When I'm look at some of these areas, like Berlin right now, or other big cities that are really getting into that new inventions, new industries, I believe there is a great momentum coming back, and combined with the German old, established industries. Right? So I believe that synergies of that really strengthened industrial infrastructure we have, combined with the new ideas that we see coming on board, will keep us have gas in the tank, I would say, for further development-

Chris Parker: Sure. Sure.

Ben Eidenschink: ... in different areas and industries.

Chris Parker: Absolutely. The final thing I want to touch on is growth for companies who are coming into Germany. A company, when they want to establish themselves in Europe, Germany sounds like it's going to be the top choice. I guess, can you think of any examples of companies and how they've grown since establishing operations in Germany?

Juergen Adler: Yeah. If we look here, at a recent establishment, right? And we call out here a Tesla who decided to choose Germany for its production, because I think many companies realize how important it is to produce in a country where, on a long run, have the high car sales in terms of these electric cars, right?

Chris Parker: Sure.

Juergen Adler: In order to convince the German people to buy this foreign brand, you possibly need to manufacture that in that same country because then, obviously, there's a certain guarantee of quality, because the cars are manufactured in Germany. So it could be seen as a high-quality brand. And that will help you in the overall sales.

Chris Parker: Absolutely. And then Ben, for companies that don't deal in automotive, how have they grown since establishing in Germany?

Ben Eidenschink: I believe there's a big combination with that, right? We talked about that historically; we always build the infrastructure around it, right? So if you have a certain vertical to that, there are so many industries, inventions coming around that, right? If you have a farmer being one of the verticals growing in Germany, then you have all the productions around it. We just see that on the example Juergen said, on Tesla coming into the Berlin area. You could see that entire area growing on recharging stations, inventions on any kind of battery.

Ben Eidenschink: This is really then we take the advantage to build everything around it. And I believe that makes it to the strong infrastructure. You don't come into Germany as a company and individual investor, siloed. I believe it's always surrounded with a lot of opportunities around that industry, around that product, around that idea.

Chris Parker: That is fascinating way to look at that, yeah. I hadn't thought of that.

Ben Eidenschink: If you can make it here, you can make it everywhere.

Chris Parker: Yeah, very cool. Well, thanks so much for your time, gentlemen. If people wanted to get to know you a little bit more or learn more about moving their operations to Germany, where can they find you? How can they get into contact with you?

Ben Eidenschink: Sure. With the infrastructure that we also have on Expeditors in Germany.

Ben Eidenschink: You can find one of our branches in Germany. We are in every major hub and city available in Germany, for questions in any kind of transportation modes, compliance, everything, what is needed around logistics.

Chris Parker: Absolutely. And Juergen, how about you? Where can people find you?

Juergen Adler: Normally, as I said, we are present in the offices here, in Germany, and myself sitting in Frankfu rt. So I'm always open to assist with any questions. If somebody have questions, feel free to reach out. Whether this is by email or by phone call, I'm happy to explain further and support with any requests, questions.

Ben Eidenschink: And these times, you can also call our landline at home because we're all in home office.

Chris Parker: Well, thank you so much for your time, gentlemen. This was really fun to talk about, and I appreciate chatting with you all.

Ben Eidenschink: Thank you very much, Chris.

Juergen Adler: Thank you very much.

Ben Eidenschink: It was fun.

Chris Parker: Thanks for listening to today's episode. If you've got any questions or want to learn more about today's topic, check out the show notes for more information. And before you go, make sure you're subscribed on whatever podcast app you're using so you won't miss the next episode. To learn more about Expeditors, you can find us on LinkedInFacebookInstagram, and Twitter, or simply visit us at expeditors.com. Take care, and I'll see you next time.

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Blog was originally posted on April 14, 2021 7 AM

Topics: Automotive, Germany

Expeditors

Written by Expeditors

23 minute read