Deventer Group

Increase efficiency with Teleroute Freight Exchange ›

Context

The fresh breeze, that has been blowing through the transport sector for some time, has now developed into a threatening storm: key words such as EU expansion to the East, a diesel price hike, toll charges and increasing market transparency are making logistics professionals more and more nervous. The transport sector really is under pressure – a fact that is borne out not least by the constantly growing number of insolvencies. One of the most important countermeasures is the optimum utilisation of vehicles in order to keep empty kilometres to a minimum. The DEVENTER Group, a small to medium-sized logistics company headquartered in Cologne, has found itself a good solution to this problem: it works with an online freight exchange.

Need

“In my eyes, one of our main problems is the current growth in market transparency which is making it ever easier for the sender to gain an overview of the best offers,” comments Heinz Steinheuer, member of the management of DEVENTER, as he leans back and reflects for a moment. “Customers have identified logistics as an area for potential savings and do everything they can to lower prices, now even the SMEs themselves. Quality is taken for granted. The price is the only thing that counts - naturally, you cannot blame them for that, after all they are facing a bitter competitive struggle themselves.”

Nevertheless, the DEVENTER Group, which has been operating successfully on the market for 44 years, has managed to achieve solid growth of around 5% year on year - in the middle rather than the dumping price segment. But what is the secret of their success? Heinz Steinheuer smiles: “Secret? We don’t have a secret!”… and continues, “for one thing, we offer our customers an optimum service with a great deal of added value. For example, our 250 employee-strong team is composed of people from a wide variety of nations. Besides Germans, we also employ people from Poland, Hungary, Italy, Spain, France and Greece - and that’s just here in Cologne.

Our aim is always to give our customers the opportunity to speak to us in their mother tongue. With regard to the value-added logistics, we not only transport goods but also store, prepare, label and assemble them, for example, too,” explains Steinheuer. “Naturally, we are also unfortunately forced to try and cut down our own costs on a continual basis. We try to avoid empty runs, minimise empty kilometres, focus on personnel costs at all times and keep abreast of new technologies which may be able to contribute to increasing our efficiency.”  

Being in the fortunate position of nevertheless recording growth in the current phase – in which the transportation sector has still not consolidated – is something that the DEVENTER Group shares only with its major competitors from the 3PL and 4PL sectors: “Once again, we are reckoning with a substantial increase in the number of cooperative deals, hostile takeovers and insolvencies,” explains Dr. Uwe Barwig from the Mannheim University of Cooperative Education, Forwarding, Shipping and Logistics department. “Companies can only avoid this by, on the one hand, realising more orders, which it may be possible to achieve by means of expanding their range, for example. And, on the other hand, by cutting their own costs,” says Barwig.   However, this is no easy task – the expansion of a range to include additional value-added services is something that on the whole only the larger companies with the appropriate liquidity can afford to do. After all, it is something that is associated with extensive investments initially, the fruits of which it may only be possible to harvest in the mid to long term.

Solution

Everyone benefits from freight and vehicle exchange, but how can SMEs go about also being able to register short-term successes while investing as little capital as possible? “One of the main problems for the industry continues to be the development of high market transparency with the lowest possible transaction costs,” says Dr. Uwe Barwig of the Mannheim University of Cooperative Education. “The targeted use of freight and vehicle exchanges can provide a solution for this.” This is because these market places, which set out the information process involved in the goods supply chain more transparently and, in particular, more quickly and, therefore, more efficiently, are making a crucial contribution towards improving the economic climate in the sector. All participants can benefit from using a freight and vehicle exchange – the haulage contractor, which still has the required load capacity free, is able to fill its truck on favourable terms in which the freight forwarder also participates.  

This was something else that DEVENTER was quick to recognise. “We have been working with the Teleroute freight exchange ever since 1992. At that time it was still operated via BTX,” recalls Heinz Steinheuer. “Teleroute has been online since 2000 and, as the largest freight exchange in Europe today, has carried us with it to the top on its wave of success. The more expediters Teleroute employed, naturally, the more cargo offers and cargo space were available on the exchange and the more efficiently we have been able to operate. In addition, we have also established a large number of new, valuable and, most importantly, long-term business contacts as a result of our collaboration with the online exchange. Furthermore, it has revolutionised the processes in our planning department in a similar way to the introduction of computers in the 1970s and 1980s. In the past, our expediters had to hang on the telephone for hours when they were looking for freight. Today, it all happens in a matter of seconds!”  

Checking quality standards is indispensable

It is true that using such freight and vehicle exchanges is not without costs, the users, however, like Dr. Uwe Barwig, are convinced that this investment is worthwhile.  According to Uwe Barwig, “anyone striving for such a solution should, however, check the services offered by the provider thoroughly in advance as not all the companies operating on the market observe the current quality standards. For example, it is important that the service provider, checks the credit worthiness of its customers and that it offers intelligent filters that allow the expediter just to concentrate on the data which is relevant in order to resolve the task in question.”

Results

The DEVENTER Group is convinced of the fact that, in Teleroute, it has found the right partner. “You can work online without having to buy expensive or time-consuming software, the system is well-structured and easy to use, our employees receive regular training from Teleroute and, if a problem does arise, we can get help free of charge via the hotline,” summarises Heinz Steiner detailing what he sees as the most significant benefits of the freight exchange. “We have concluded that before we worked with Teleroute, we had to reckon with approximately 10 times the expenditure when it came to looking for cargo. The costs involved in using the exchange certainly pay off in this respect.”

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