News service. DB Schenker: A reliable partner of the automotive industry

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1 DB Schenker: A reliable partner of the automotive industry From component supply to pre-assembly in the plants, shipment of finished vehicles and spare parts distribution: DB s automotive specialists work for producers and suppliers all around the globe (Berlin/ Moscow, April 2012) In Emden, the automotive specialists every day load hundreds of vehicles on board ships bound for overseas destinations in America and Asia. In Lisbon, they regularly dispatch trains to Germany for the automotive industry. The production supply of the VW commercial vehicle plant in Hanover is in the hands of DB Schenker Logistics. And for the plant in Kaluga (Russia), DB Schenker s experts have developed a supply concept that received the Volkswagen Award from the VW Wolfsburg Group. On behalf of the automotive industry, markets all around the world are supplied with spare parts in Asia, Africa, America, and Europe. DB Schenker, DB s Transportation and Logistics Division, offers a high level of competence with regard to the special customer requirements of the automotive industry. Both business units, DB Schenker Rail and DB Schenker Logistics, have top-level expertise in handling key accounts. These include, for example, the automotive manufacturers Volkswagen, Audi, Ford, Opel, Daimler, Porsche, and BMW. Supply industries worldwide (e.g. Hella, Webasto) are also important customers of DB Schenker. DB Schenker operates on all continents and in important developing markets such as Brazil, China, India and Russia, and offers what the globalized markets call for: A worldwide location network, global, integrated supply-chain solutions and excellent market positions in growth areas, such as contract logistics. With a turnover to the amount of 1.7 billion (2011) just with automotive manufacturers and their suppliers DB Schenker is one of the largest providers of logistics services to the automotive industry worldwide. Some figures: With its contract logistics division, DB Schenker Logistics is directly involved in the production of six million cars per year. For the automotive business alone, 725,000 square meters of storage areas are administered all around the globe. Every day, about 250 trains loaded with finished vehicles, parts from suppliers, components run on the European Automotive RailNet, spanning 20 countries as far as China. Every year, DB Schenker transports about three million vehicles by rail. For this purpose, a fleet of 4,300 cars is available the largest in Europe. For truck land transports, DB Schenker Logistics offers automotive logistics solutions with more than 1.3 million transports per year. Up to 3,333 vehicles are loaded as roll-on roll-off ocean freight every day. 1/5

2 For more than two decades, DB Schenker s logistics solutions have comprised procurement management including all modes of transport, the development of individual IT solutions, the setting up of suppliers parks at the production sites, inter-plant transports, delivery to the assembly lines, the transport of new vehicles for maritime transshipment, as well as the global supply of spare parts. Europe-wide rail network, high-capacity corridors DB Schenker Rail Automotive focuses on rail solutions and complementary road and logistics offers. Full-service offers that connect suppliers, plants and markets are developed for finished vehicles and material transports. Transshipment and terminal processes are increasingly being integrated into intermodal rail-road logistics chains. Europe-wide key account management ensures smooth processes. The European rail network includes the Spain-France-Germany, Scandinavia- Italy, and Germany-Russia corridors. As regards Eastern Europe, there are connections to Turkey and Romania. Thus DB Schenker Rail Automotive is the only company to offer Europe-wide industry solutions based on a rail network. With a fleet of 10,000 rail cars, 300 company-owned trucks and 2,500 transport containers, DB Schenker Rail has a traffic performance of about four billion ton kilometers per year. Example of Audi: Logistics solutions for supply as well as inter-plant transport between Germany and Györ in Hungary have been developed for Audi. The company integrates the material flow from various production areas of the Ingolstadt plant, as well as from parts suppliers and Volkswagen/Audi Group locations in Central Europe, to the Györ plant. New vehicles and engines are transported back to Germany by rail. A certified incident management provides additional safety for the supply of the Audi plant. For this purpose, DB Schenker processes all information along the entire logistics chain from the suppliers to the Audi parent plant to Györ, and can therefore offer reliable alternatives in case of disruptions. Example of Porsche: DB Schenker operates an innovative logistics concept for the transport of finished vehicles from the Zuffenhausen and Leipzig plants to the sea ports for the sports car manufacturer. The concept combines truck and rail transport, and therefore provides an increased reliability of supply. The Porsche Supplier Award for special quality, performance, flexibility and customer orientation was awarded to the Top 10 Supplier DB Schenker in The customer s explanation: Shifting most of the transports from truck to rail transport reduces emissions, and the truck-rail based emergency concept provides special flexibility in the case of quantity fluctuations. 03/2012 KE/BOE 2/5

3 Contract logistics are part of the value chain The contract logistics segment of DB Schenker Logistics mainly focuses on services in its role as a partner at the plants of the automotive industry and their suppliers worldwide. The logistics concepts and solutions accompany vehicles of almost all global manufacturers throughout their life cycle. The focus is on customer proximity with central and global support of the DB Schenker network at the same time. Solutions for the automotive market segment comprise just in time/ just in sequence production supply, CKD (completely-knocked-down) and SKD (semi-knocked-down) services for the supply of distant production plants, warehousing with value added services, as well as after sales logistics. As a result of the increasing worldwide division of labor in the production networks, the demand for intelligent international and multimodal logistics concepts will grow mostly in the main volume markets of Europe and the USA. The automotive manufacturers are increasingly assigning parts of the value chain to external service providers such as DB Schenker. The service providers are therefore part of the production and value-added process. Every vehicle consists of several thousands of parts from suppliers, produced by manufacturers from all over the world. Latest example: In BMW s Leipzig logistics center, about 600 DB Schenker employees ensure that 50 containers loaded with automotive parts are shipped every day. At the adjacent sidings, the containers that are bound for the Chinese market are placed on carrier cars, and are safely transported by rail for more than 11,000 kilometers to BMW s Shenyang plant supervised by DB Schenker Rail. DB Schenker manages the operation of automotive suppliers parks, including the supply as per the Kanban principle, and just-in-time supply strategies all the way to the assembly line. Their portfolio includes the pre-assembly of complex components, including the control of the production as well as quality assurance. Example of VW Nutzfahrzeuge (commercial vehicles) in Hanover: DB Schenker s automotive logistics specialists are responsible for the production supply of the VW Nutzfahrzeuge plant. They supply the production with materials such as wiring harnesses, pre-assembled cockpits and fastening elements just-insequence. Individual and flexible logistics solutions enable quick reactions to production fluctuations. On about 47,000 square meters of storage areas, all parts from suppliers are consolidated and prepared for provision to the assembly line just- in-sequence. In addition to the fully automated small parts warehouse, 270 employees ensure a smooth and reliable production supply in three shifts, nonstop, day after day. Example of VW Nutzfahrzeuge (commercial vehicles) in Argentina: In this South American country, DB Schenker Logistics is responsible for the production supply of the Amarok and Suran models. The external supply center with a size of 03/2012 KE/BOE 3/5

4 30,000 square meters is located in the vicinity of the production location. The supply center employs 270 people. DB Schenker Logistics also works for the automotive industry in the area of land transport: For example, the Volvo Car Corporation relies on DB Schenker for their spare parts logistics in southern Germany. A new comprehensive solution integrates the Frankfurt and Ludwigsburg branch offices as a Local Distribution Center into Volvo s European spare parts supply network. The logistics services providers supply more than 100 Volvo dealers in the economic regions of Frankfurt and Stuttgart with automotive and accessory parts from both distribution centers up to three times per day. DB Schenker manages logistics of 250 suppliers for BMW BMW and Porsche are two of the biggest customers in the area of land transport. DB Schenker has developed a combined truck and rail transport solution for BMW that manages about 250 suppliers. For this purpose, shipments are combined in Frankfurt, and transported to Regensburg by rail. From there, they are distributed to the BMW plants in Regensburg, Wackersdorf, Dingolfing, Landshut and Munich/Eching by trucks based on the customer s requirements and synchronized with other trains on behalf of BMW. For Porsche, DB Schenker manages the spare parts supply of about 90 dealers in Germany, Switzerland and Luxembourg. This service is fully controlled by the central Service Tower in Tamm, near Stuttgart. The air freight segment of DB Schenker Logistics ensures the spare parts supply of Volkswagen dealers in the entire Asian-Pacific region through its logistics center in Singapore. DB Schenker is also active in the area of automotive logistics in South Africa and China. Integrated concepts: Train systems for the industry The rail network is to be developed to become an open industry network everything from one source. Customer-specific transports will increasingly be combined with other transports and services. DB Schenker is using its industry network with its points of high volume and hubs, and is increasingly combining material and vehicle flow, as well as supply quantities. Instead of trains for single customers, train systems for the whole industry will be offered. This enables higher rates at reduced cycle times, and reduces scheduling efforts for the customers. At the new automotive locations in Romania, Hungary and Russia, too, the employees of DB Schenker Logistics work closely with their DB Schenker Rail colleagues in order to develop tailored logistics services for their joint customers. In Kaluga (Russia), for example, logistics services providers rely on a successful and stable rail transport flow. They therefore develop offers for the supply of assembly lines at the clusters being created on-site, and manage the cross- 03/2012 KE/BOE 4/5

5 dock warehouses for the customers. The project teams consist of experts from all specialist fields of the transport and logistics sector. Competence Center DB Schenker Automotive The Competence Center DB Schenker Automotive (CC Automotive), which was founded last year, aims to provide an important impulse towards integrated logistics solutions. The strategic objective: Offering more rigorous and comprehensive competition using attractive industry solutions. For this purpose, automotive specialists from the rail freight and land transport sector, the air and ocean freight sector, as well as the contract logistics/scm sector work together when it comes to developing industry-specific transport and logistics solutions. One product idea of CC Automotive is, for example, a route management that is able to react flexibly in the case of a production launch or fluctuations in the automotive plants by managing the relation between truck and rail transport as required. Furthermore, strategically important projects such as the further development of transport and logistics service offers are promoted with a view to the challenges arising from electromobility. 03/2012 KE/BOE 5/5