Rail of the Art (ROTA), Atlantic Forwarding’s latest block trains, have successfully established themselves as an effective service along the New Silk Road. With unique train names such as ‘Rosie’ and ‘Emma’, they certainly piqued everyone’s curiosity about their novel venture. A member of the New Silk Road Network, Atlantic Forwarding has sustained a long interest in exploring rail initiatives between China and the EU.
In our recent interview with the COO Europe of Atlantic Forwarding, Philipp Baur, we had the chance to not only explore their current services on the rail, but through a deep dive into their profile, we learnt more about the establishment and growth of the company since 1979, their early rail services and their future projects. An experienced company headquartered in Switzerland, Atlantic Forwarding, has been a pioneer in many senses. Through our conversation, we learn how the company maintains its quality of performance and at the same time strives for an innovative approach while serving its customers.
In conversation with Mr. Baur…
NSRN: In 1979, the company was founded in Switzerland, and the progress was so rapid that in the same year, Atlantic Forwarding also started subsidiary companies in Taiwan, South Korea and Hong Kong. A few years after, Atlantic Forwarding rapidly established itself in Japan and Thailand too. It is remarkable and at the same time fascinating that the company took shape by growing its initial roots in Asia. We would like to know more about these early days of the company, and the journey of arriving at 40 offices with 300 employees across the globe.
Philipp: In the founding years of the company, the Swiss market was largely export-driven and nobody at that time thought about importing anything from the Far East. This was a good situation for the former management of Atlantic Forwarding, who decided to focus on imports because, at that time, the first gadgets made in Hong Kong and Taiwan started entering our department stores. Also, the carrier agencies were entirely controlled by freight forwarders, so there were no big players like Maersk and such, at least directly. Therefore, Atlantic Forwarding was unique at that time, and nobody else was able to do this or set up a similar network.
After opening the branches in Hong Kong, Taiwan, and Korea, we quickly expanded into Southeast Asia (Malaysia, Indonesia, Thailand, Singapore, and Vietnam) following cargo flows. At the end of the 90s, the Chinese market opened, and we quickly opened our branches with a Type-A license or a business license, so to say. Soon enough, we realised that South Asia was also growing in prominence. Countries such as India, Bangladesh, and Pakistan began exporting raw materials, like cotton, textiles or even bath towels and footballs. This also allowed me to travel around these regions, although our headquarters has always been in Zurich – Switzerland, and recently we relocated to Basel.
Our first office in Zurich was a regular apartment with a garage that we also used as a working place! With our fax machines and telephones, there was no need for an IT department then, it was a special time! We also conducted many projects to ship textiles from Bangladesh to Europe through lots of 747 Antonov charters with our German partners, amongst others. In 2008, we opened three offices in Chennai, New Delhi, and Mumbai. These were the last expansions we did in Asia. Simultaneously, we also expanded into Germany and France. A few years later, we also established offices in Spain, Turkey, UK and so on. This is how vast our network became. Our latest office is in Montreal, Canada. This was established one and a half years ago to have a footing in North America. We continue to expand to other regions, always in the right pace and only after having evaluated how things develop.
Another critical aspect is that we were not focused only on importing to Switzerland or even to Europe. We saw ourselves more as Asian than European forwarders because the core business of Atlantic Forwarding is from and to Asia. We also have a very successful connection through the Middle East as well.
NSRN: There is not a mode of transport or type of cargo that Atlantic Forwarding cannot handle. With years of expertise and an extensive global network, the quality of service offered is impeccable. However, we would like to hear more in detail about Atlantic Forwarding’s capabilities, including any exciting cargo projects that the company undertook over the last decade.
Philipp: One of our strengths always was and still is, our short communication channels and flat hierarchy. We don’t have to overcome countless hurdles to initiate new developments or projects, such as talking to five different department heads. If there are new ideas, we discuss in the group how to manage and organise them. Then we take a top-down approach in the organisation, approaching the team and facilitating teamwork to achieve the success story soon.
Atlantic Forwarding’s core business is sea freight, to and from Asia. Currently, we are doing 150,000 TEUs a year worldwide. Our biggest markets also include Europe, North and South America. Coming to our special projects, of course, I can say that there were hundreds or even thousands of unique projects. The air chartering business from Bangladesh I mentioned before is a good example. Another that comes to mind is transporting windmills from Denmark to Asia.
There are so many crazy and funny stories through these years. With the Bangladesh Antonov chartering deal, we did six or seven full charters within one week, all full of textiles. At the time, Bangladesh was flooded, and the customer needed the cargo urgently. It was already a high-risk financial scene, and it was certainly not cheap. But we managed to get the load to Germany in time for the stores to launch them. Of course, we made good money from it and finally received a happy customer too. There were no social messaging platforms back then, and the partners made live connections through cellphones when the first 747 charter departed from Dhaka airport.
NSRN: Mr. Baur, as COO Europe and an ExCom member of the Board of Atlantic Forwarding, it is evident that you shoulder a large set of duties and responsibilities. We would love to hear more about your ongoing tenure with Atlantic Forwarding.
Philipp: I joined Atlantic Forwarding back in 1989 as a young freight forwarder, and it has been 32 years working here now. The fact that Atlantic Forwarding has always been exceptional as a freight forwarding company is why I never changed companies. For 32 years, I have been working here in several positions. I have had the opportunity to travel a lot and see the whole world, focusing on Asia. The market changed every two-three years; most recently, the pandemic has also caused the market to change so much. Therefore, I never felt the need to search for something else.
The responsibilities and accountabilities of our operations business unit are covered with another colleague in Asia. This is to ensure that the company’s backbone processes take place quickly and keep up with market requirements. At the same time, we cooperate with our IT department, Board of Directors, and our very valuable employees. We are also fortunate that many of our employees have been with us for over 10 years. We have experienced people working on the frontline who are professional with business processes while maintaining top-notch quality.
Needless to say, in the past 18 months, the pandemic has kept us really busy. The shipping and transport chains today have more holes than Swiss cheese! It’s a given fact. So accordingly, the customer must be constantly kept up to date about any delays or changes promptly. This we manage with our IT connections through our fantastic in-house IT team. We give real-time updates to them because, as you know, in sea freight, there are currently up to 5 weeks of delays, rollovers, port changes and more. For rail, we found a Chinese supplier with a fantastic GPS tracker, which is now part of our product. Almost every container is equipped with this GPS tracker, giving us the chance to track the location of the containers or trains.
NSRN: Coming to Atlantic Forwarding’s latest initiative, Rail of the Art Express (ROTA), between July and August, block trains ‘Rosie’ and ‘Emma’ have already completed many journeys from China to Germany. First and foremost, why were these trains named ‘Rosie’ and ‘Emma’, but more significantly, how did this project originate, and what were the challenges, if any, while setting up these block trains?
Philipp: The trains usually have their numbers, which is very common, so this was motivated by the need to keep our product unique in the market. Of course, this is not applicable for every charter that we do, but we generally go with the names ‘Emma’ or ‘Rosie’ when it comes to the block trains. Moreover, it becomes easier for the admin to talk about ‘Rosie I’ or ‘Emma III’ as we can easily understand which train we are talking about. Similarly, for promotions, the picture we used for these trains was also hand-painted by an artist, as opposed to a photo, because we wanted them to be unique.
To give you a little history about our rail services, we started offering rail services to our customers at the end of 2016, but back then, there were only modest volumes. By August 2019, we went deeper into the ‘One Belt, One Road’ Initiative. Through our analysis, we realised we needed to expand this product further. Of course, we were already strong in sea and airfreight, but sea freight was slow, and airfreight was expensive. So, we used the motto, ‘cheaper than air, faster than sea’ for our rail product. At the same time, we realised that nobody else was offering LCL services in Switzerland. There are other options with using hubs in Poland or Germany, but no direct console existed for Switzerland. So, we initiated LCL products from Switzerland and FCL into Europe. Quite quickly, we had our first direct consol to Basel. We consider ourselves as pioneers in Switzerland for LCL rail.
When the Covid pandemic began, there was a tremendous demand for LCL transports solutions that were fast and safe. We created in-house documents for our rail FCL services and designed our insurance products to tackle any complications. As you may recall, during the beginning of the pandemic Germany and Italy blocked some medical equipment. A lot of customers were also afraid that Russia would confiscate medical equipment on track, etc. We found the resultant insurance coverage that could tackle these complications. This was a big success in Switzerland and towards the customers. In 2020, we also initiated shipments into Spain and Turkey. It is evident that our Silk Road product is a big success. This has been a promising endeavour for us.
At the end of 2020 and the beginning of 2021, the market was overheated. There was strong demand from our customers to launch our own block trains. We also started to work towards the UK, which is now on our agenda. We have already completed the first shipment to Immingham. It’s running perfectly and ultimately enhances sea freight as well, along with the ‘Emmas’ and the ‘Rosies’. Two ‘Emmas’ are on their way towards Europe. The ‘Rosies’ have arrived already. I must add that this is not easy. There are so many problems now, be it congestions or customs authorities, track constructions in Poland or strikes in Germany. It’s not easy, but our advantage is we always know where our trains and containers are because they are fitted with GPS trackers. These trackers were an idea from one of our employees in the Netherlands because he complained about the lack of information from the rail operators. We discussed it internally and found a supplier for these trackers in China, a remarkable success.
NSRN: As you described, Atlantic Forwarding has skillfully leveraged rail freight along the New Silk Road. With the current climate, what do you think the future of conducting rail freight between Europe and China will be?
Philipp: The Chinese government has reduced the subsidies, and of course, rail freight is already more than $15,000 (per container). Today’s market, especially these few months, is completely overheated. Finding charters or block trains is difficult and risky because the transit time is not 20 days anymore. We are now talking about almost 40 days. Everybody has been opting for rail because it is a good product and a successful alternative. We must wait and see how the Chinese government will manage the market before the Chinese New Year, because there are situations where trains are staying at the border for ten days. This is a market problem, and customers are generally aware of this, too.
There are delays of up to 5 weeks in sea freight, and there is a lack of space in air freight. With Covid outbreaks and other calamities that result in ports and airports terminating activity, it has become evident that no transport mode from China is safe or has a standard transit time now. The customers understand, and some of our biggest customers have huge backlogs that they know will take time to complete. If space and equipment were readily available, we would run five or six trains a week! Right now, the key topic on our agenda is export because it is easy to get block trains out of China if they can then be sent back more or less with export cargo.
NSRN: We are seeing pandemic triggered problems within the logistics industry and a massive increase in freight demand (plus some congestion). What strategies are the company adopting in the current quarter? Moreover, what are some future developments planned for the Atlantic Forwarding?
Philipp: It is hard to analyse the market. Suddenly, congestion is blocking a train somewhere, or a terminal/port/airport is closed temporarily due to Covid, floods, etc. So, ‘till at least Chinese New Year, we need a lot of flexibility and fast reactions when we see a new problem. There are fixed allocations for rail and sea freight, but we are already fully booked for the Golden Week Since the demand is so strong, we keep our eyes and ears open for additional capacity. Even after the Golden Week, the situation might remain the same.
Tough months lie ahead of us as an industry. For Atlantic Forwarding, the plan is to focus on exports and expanding into the Balkans via Koper or Trieste. We are also looking to further expand into Vietnam via China, which will be very interesting. Rail from Japan or Taiwan via the South China Sea is an option, too. From the transportation side, it is not a big problem to book sea freight from Kobe, but then there are always some problems with documents and liabilities, or uncertainties on how to perform the customs and so on. So, there are quite a few issues present in the industry, and one needs to be flexible and fast. We are not a big company with 1000 employees. We have short and lean communication channels, which you need to be successful in these times.