Small country, big business

Swiss precision is legendary, something the country recently demonstrated once again with the construction of the Gotthard Base Tunnel. At 57 kilometers, it is the longest train tunnel in the world and a much-admired technical masterpiece that was completed in 17 years—a year sooner than planned. The massive project also set new standards in terms of costs: while it is not uncommon for budgets for similar projects elsewhere to spin out of control, this one stayed just below CHF 12 billion. Compared to the original forecast of CHF 8 billion, this seemed acceptable to planners. Since last year, over 300 trains per day have passed through the two tunnel tubes, parts of which run below the Saint-Gotthard Massif, where mountains tower above the tunnel ceiling at up to 2,450 meters tall.

Because of its location in the center of Europe, Switzerland has always faced special challenges, serving as it does as a transit country for the most important European markets and as their connection to Italy. With the opening of the Gotthard Base Tunnel, it suddenly became much easier to cross the Alps. “Europe now has an efficient rail corridor right through the center of the Alps, so goods can be transported from Rotterdam to Genoa with a reduced environmental impact,” explained Swiss councilor Moritz Leuenberger at the inauguration ceremony, calling the tunnel the “longest wonder of the world.”

Nevertheless, roads remain the most important mode of transporting goods in Switzerland. They accounted for 62 percent of all transport routes in 2014 while railways accounted for 38 percent. Airfreight is significant only for exports. Waterways are confined to the Rhine River and are relevant only to export and import via Basel.

DACHSER has been active in the Swiss market since 1967, servicing the country from eight locations. Over these 50 years, the logistics provider has grown from a small freight forwarder that initially focused on transports between Switzerland and Germany, to one of the most important logistics providers in the Alpine Republic. “Our business model covers national and international groupage transports, intercontinental sea and air freight logistics, warehousing, and customized services in the two business fields of Road Logistics and Air & Sea Logistics,” says Urs Häner, Managing Director European Logistics Switzerland. “Services coordinated by both business fields, such as customs processing and consulting as well as industry-specific solutions, round out our offerings,” he adds. Two hundred and sixty employees work to make sure that processes are reliable and deliveries are on time—just as you would expect from the Swiss.

“Our customers’ needs have changed. Speed, precision, flexibility, and availability matter to them a great deal when choosing a service provider,” continues Häner. While certain parts of the supply chain, like the transport of goods, customs processing, or warehouse management were previously outsourced, such projects are now much more focused on increasing added value along the entire supply chain. “Experience shows that cost efficiency jumps when we don’t just optimize isolated solutions. It is much more useful to consider holistic improvements both in upstream and downstream processes along with parallel ones,” says Samuel Haller, Country Manager Air & Sea Logistics Switzerland. “Interlocking gives our customers complete intercontinental solutions from a single source. In addition to direct cost benefits and process optimization, the primary goal is to give customers added value, for instance shortening delivery times,” says Haller.

Although the strong franc is currently weighing down the economy, Urs Häner is optimistic about the future. After all, Switzerland not only is synonymous with high quality standards, it is also one of the most affluent countries in the world. In 2016, the Swiss were once again at the top of the index for competitiveness as determined by the World Economic Forum. The gross domestic product (GDP) in 2006 was around CHF 650 billion. This places Switzerland among the countries in Europe with the strongest economy. The past year witnessed a healthy recovery with 1.5 percent growth following a contraction to 0.8 percent in the previous year when the minimum price of the franc was eliminated.

Defying a strong franc

The strong franc had the greatest impact on Switzerland’s most important trade partners: European neighbors in Germany, France, Austria, and Italy along with the US, Spain, the Netherlands, and China, which mostly receive exports of chemical/pharmaceutical products, machine and electronic tools, luxury goods, and food and beverages. Imported goods include consumer items like medical supplies, cars, machines, devices, raw materials, and semi-finished products.
These items are delivered to the metropolitan areas of Basel, Zurich, and Geneva, where some are then shipped to the rest of the world. In recent years other locations like the Aarau region have experienced superlative growth—cost being one important factor. Indeed, in the center of Switzerland, where everything happens economically, real estate prices have exploded and the highways are highly congested. Northwestern Switzerland is different, with its international airport (EuroAirport Basel Mulhouse Freiburg), central location for international waterway routes, and both rail and highway hubs: it is considered the Swiss region with the best transit infrastructure.

DACHSER maintains a presence in all leading logistics locations with branches in the cantons of Basel-Land, Bern, St. Gallen, Waadt and Zurich. “Leveraging the interplay between our overland transit organization and the three Air & Sea logistics locations, we can offer customers all of our services from right here,” explains Häner. “We reached an important milestone when we opened up our branch in Lyss (near Bern) three years ago. Being close to western Switzerland allows us to shorten transit times by truck, in some cases by an entire day. Depending on how the Swiss market develops, we may even expand existing locations or set up a new branch.”

When Häner, who has worked at the company for 20 years, looks back, it is mostly DACHSER Switzerland’s transformation into a global logistics provider that stands out. He says that internationalization was a major advantage for the location. Digitalization will dominate in the coming years. “Exchanging information digitally will eventually become standard procedure for all parties,” says Häner.

As in many other countries, logistics providers in Switzerland also expect more environmental zones to crop up in urban spaces with regional limits and prohibited times for transport—with all the attendant effects on fleet management and modified route planning. In addition, the industry foresees the continued problem of understaffing. It is already difficult to find truck drivers in the labor market. “There’s a great need for young drivers in the Swiss shipping industry,” confirms Häner. “We’re always looking for highly qualified professionals. Demand is particularly high for expertise in customs in addition to truck driving.”