The port of Bremerhaven is the fourth-largest port in Europe, and dearly significant to Germany. This month New Silk Road Network had the opportunity to visit our member Container Service Friedrich Tiemann & Sohn GmbH & Co. KG, in their Bremerhaven headquarters. There we met with Dr Ingo Starke, the Managing Director of the company, who took us on a tour of their warehouses and container depot, where we learnt extraordinary things and witnessed the personnel in action.
In the windy city, with the backdrop of colourful containers, we also had the opportunity to have an engaging conversation with Dr Starke. Dr Starke has an impressive background as an officer in German Air Force undertaking intricate military logistics and then switching gears after a long service of 15 years. We spoke about the various aspects of a Container Service company, their essential role in the supply chain and finally, the impact caused by the changes in the automotive industry and the development of 3D printing technology. With a sharp eye on the changing times, Container Service Friedrich Tiemann is a testament to lasting stability and reliability, in the face of a fast-moving world.
In conversation with Dr Ingo Starke…
NSRN: The Friedrich Tiemann Group has an extensive history spanning over a century. Can we have a quick history lesson for our readers, starting from 1905 when the stevedoring business was established?
Ingo: Well, stevedoring is a traditional logistics job, which involves loading and unloading of cargo on conventional ships. You need special personnel to fix the load inside the ship, and similar personnel at the receiving port to unload the cargo. In 1905, there were no containers; instead, there were lots of wooden boxes, yes, it was literally breakbulk! At the time, in Bremen, there were about 60 stevedoring companies, and now only three companies offer this service.
After the invention of the container, and the arrival of the first container ship in Bremen in 1966, the container became the norm because of which the stevedoring companies began to fade away. Stevedoring is now only used for oversized cargo that does not fit in containers such as large pieces of machinery, pipelines, or wood. This was the only service we offered till the 1970s. Thereafter, we began to create services around the container. Our business is primarily focused on exports from Germany which has been a profitable business, but now we know that we must expand into import as well. One of the reasons for joining the New Silk Road Network was to improve our import footprint and to meet those companies that wish to import to Europe.
Bremen and Bremerhaven are central sites for us. We receive a lot of cargo in Bremen, which makes it an excellent place for consolidation. The location in Bremen is situated in the industrial harbour and in short distance to the German container terminals in Hamburg, Bremerhaven and Wilhelmshaven. Due to the wide range of service that we offer, we require a warehouse area and a lot of open space for container handling. This space was acquired over time, and it has been almost 4-5 years since we finished our last expansion. Our site in Bremen is wholly developed now.
The site in Bremerhaven began its development in 1983 with 20,000 sqm. It is decently sized now as we bought this area slice by slice. The area grew up to 180,000 sqm. Over the last 15 years, we invested in modern warehouses of 15,000 sqm space and lifting capacity of 40 tons.
NSRN: From our previous conversations, I am aware that you were not always involved with the logistics business. How did you come across the opportunity to work at Friedrich Tiemann? How has your diverse background helped with your duties and responsibilities?
Ingo: I was an officer in the German Air Force (Bundeswehr), and all officers are usually assigned to specific departments in the forces. After graduating from university I received additional education in military logistics and joined that department. In 2011, I was in Hamburg to attend the general staff course after which I decided to leave the forces after a service of 15 years. Mind you, military logistics is entirely different, it involved a lot of military exercises. The main questions were, how do we move the troops, how do we acquire fuel for the aircraft, and how to manage capacity. Interestingly, in the military, money was never a relevant factor to conduct logistics, but in general logistics, every service has a price.
After leaving the forces, my wife and I decided to stay in Northern Germany. While looking for work, a head-hunting company contacted me and told me about Friedrich Tiemann. When I met Dr Juergen Tiemann - the grandchild of the founder Friedrich Tiemann - we decided that it would be nice to work together. In the beginning, I was not part of the management board, but after two years, I became the managing director. Friedrich Tiemann is a group of six operational companies functioning together, and I became the managing director for four out of these six companies, so I have three other colleagues as managing directors. In each company, we have two managing directors. I am responsible for business development and our key clients. My main task is to look after export packaging and container freight stations in Bremen and Bremerhaven. Due to the size of the company, I am usually in close contact with all people.
NSRN: What are the functions of a container service company in the logistics industry? What are the unique facets of your company that your clients benefit from?
Ingo: The most important aspect is our container depot, where we have a large number of empty containers. This means that we store empty containers for shipping companies, we usually have a buffer stock as well to secure the availability of containers. Once we receive these containers, we check them to detect and repair damages. For example, a car must fulfil security standards, the same holds for containers. It is our job to maintain the structural integrity of containers and bring them up to standards. We also repair special equipment such as reefer containers, open-top containers and even flat racks.
One cannot see the container alone, it must be acknowledged in the context of the supply chain. We bridge the connection between land and sea transport. We receive trucks with cargo, which are unloaded then stored in our warehouse for a short period. At a certain point of time, we get the nod to load the container and then transport it to the port. There ends our small part of the supply chain. Similarly, for import business, we receive the order to the pick up loaded containers from the incoming ship, which is then unloaded in our warehouse and stored till trucks come to pick it up.
Though small, it is very crucial, because it forms that essential connection between land and sea transport. In terms of our packaging department, we are responsible for securing the cargo with the relevant packaging and handling it in our freight station. What sets up apart from many packaging companies is our ability to handle also a larger amount of containers. We combine packaging and container business, instead of separating in different stages. We also produce classic wooden boxes, but most are done on container-sized wooden skids. We also have empty containers available, which helps us create a direct connection between packaging, stuffing, and the depot. Our customers have the advantage of availing containers from us and not stress about sending containers. Our packaging and container department work closely together.
We also have a small container trading department. Many times, some clients do not wish to use the shipper’s containers as they would have to return after use in about 6-7 days. They would like to keep them for longer and use them for other purposes. A lot of industrial projects that go to Africa and Asia, where there are no warehouses or infrastructure, the container is used there for weeks and weeks for storage. The significant advantage for our trading department is that we have a lot of partners all over the world, so if our customer uses the container in Africa for a project and wishes to sell it, we help them with it.
NSRN: The second wave of coronavirus in taking place in Europe now, and noticeably companies have learnt many lessons after the first wave back in March. What was the situation that Tiemann faced during the first wave of the coronavirus pandemic, and what were the measures you have taken to recover and prevent any unforeseen trouble?
Ingo: That really depends on our customers. We have a lot of customers from the automotive industry. During the first wave, mainly for export business, it went really well. But for our customers who produced large machines, we had to store a lot of their cargo, because the Chinese partners could not receive their shipment. There is usually a gap between the purchase and delivery of large machinery, due to the production time.
In the first wave, we were doing the work on projects which were contracted six months ago. Now we see, especially for customers who manufacture large machines that production has reduced since the demand in China and the US has significantly declined. This will go on in the year 2021 too, we think the recovery will only take place in 2022.
You must know that prices for containers are very flexible, it is a spot market. It is a question of how many containers are needed and are they available on the market. At the moment our depot is 80% full, that is normal. It is baffling how we are unable to predict the current situation in terms of the availability of containers. In the first phase of Covid.19, there was a lack of containers as the harbours in China were not functioning. Three months later, it was the other way around. The shipping companies are trying to balance it out, but they avoid transporting empty containers. Besides, the trade is not balanced between China and Europe, which causes a shortage too.
NSRN: For a company like Tiemann, one can indeed say that they have stood the test of time. What are the plans for the company in the coming few years? Are there any upcoming prospects that you are already exploring?
Ingo: The first step is to acquire the cargo to fill our warehouses and our containers. As of now, we are doing our homework with ongoing digitalisation because we know we must become better and more efficient in handling our data. We need to focus on how to improve the exchange of data with our customers and how to incorporate smart devices, to reduce workload and save costs. Large machinery and warehouses can take up capital, therefore, to reduce those costs, we are relying on digitalising our processes.
Our expansion into import is not necessarily because of Covid-19, there is an overall change that is taking place in the automotive industry and other branches. The automotive industry is robust, but they are not adapting to developments fast enough. Many cars and their spare parts are manufactured in Germany, which is then transported to assembly units in China, North America, and Africa. With the development of electric cars, the requirement for parts will drastically reduce, more high tech products will be produced in Asia and need to be transported to Europe and distributed.
Twenty years ago, technology and large steel components were exported from Germany. The steel parts now come from China or India, and only the tech goes from Germany. However, this reduced our volume and tonnage, which is relevant for us. Now, we only have expensive high-tech parts to transport, which does not take lots of volume but have high handling risks and packaging demands. Finally, another development is of the 3D printer, which will allow you to produce your own parts. Once you can develop your own parts, the need to transport parts to different places of the world will decrease, but of course, this still has not reached an industrial scale. These are some developments that we are keeping an eye on while considering the expansion of our business..