Panalpina World Transport (Holding) Ltd.

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Panalpina World Transport (Holding) Ltd.

Viaduktstrasse 42
CH-4002 Basel
Switzerland
Telephone: +41-61 226 11 11
Fax: +41-61 226 11 01
Web site: http://www.panalpina.com

Private Company
Incorporated: 1918
Employees: 11,586
Sales: SFr 6.88 billion ($4.27 billion) (2001)
NAIC: 488510 Freight Transportation Arrangement; 481112 Scheduled Freight Air Transportation; 483111 Deep Sea Freight Transportation

Private, Switzerland-based Panalpina World Transport (Holding) Ltd. is one of the world’s leading integrated freight forwarding and logistics companies, with operations spanning nearly 400 offices in 65 countries. The company’s primary activities involve air and sea freight forwarding and shipping services, and Panalpina has built up an impressive fleet to support its operations. Intercontinental air freight accounts for some half of the company’s activities, conducted in large part through subsidiary ASB Air, rebranded in 2001 after the company took full control of its SwissGlobalCargo partnership with struggling Swissair. The company’s sea freight, which included a fleet of more than 500,000 containers, operates under the ASB Sea brand. Once Europe’s leading freight forwarder and logistics concern, Panalpina has slipped in the ranks because of the ongoing consolidation of the industry. The company has fought back, extending its services reach into its competitors’ core parcel delivery sector. Panalpina also has targeted the North American and inter-Asian market for its future growth and has set up a partnership with U.S. freight forwarder AIT Worldwide. Supporting these efforts, in 2001, the company restructured its operations into a regional structure comprising Europe, North and South America, Asia, and Africa/Middle East/Commonwealth of Independent States (CIS; former Soviet states). Panalpina is owned by the Ernst Gönner Foundation and is led by CEO Bruno Sidler and Chairman Gerhard Fischer.

Late 19th-Century Rhine River Transporter

The earliest component of the later Panalpina World Transport was founded as Hans im Obersteg & Co. AG, in 1895, as a freight forwarder operating out of Switzerland. That company, which formed the basis of the later Panalpina Switzerland subsidiary, focused on the Rhine river market. In 1918, a holding company that later coined the Panalpina name was established to cover the Rhine shipping route. That company bought Hans im Obersteg in the 1930s, at which time it took its first steps into maritime shipping.

The future Panalpina continued to extend its operations into the maritime shipping market in the years prior to World War II, and it also began international forwarding activities at this time. After the war, the company found its services in strong demand as the international transport market grew strongly. During the 1950s, the company, which had been operating under a number of brand names, regrouped its subsidiaries under a single holding company, changing its name to Panalpina World Transport, emphasizing its commitment to markets beyond its home base in Swtizerland. Indeed, that country was to represent an increasingly smaller segment of the company’s revenues, to the extent that, by the beginning of the next century, Switzerland represented no more than 2 percent of Panalpina’s sales.

Panalpina grew strongly throughout the boom economic years of the 1950s and 1960s, establishing itself as one of the European continent’s leading freight forwarders. Panalpina also was expanding steadily beyond Europe, forming the basis of a worldwide network that was to include nearly 400 offices in 65 countries before the end of the century. During this time Panalpina made its first moves into the North American market.

The rise of the airline industry, particularly with the success of the Boeing 747 airplane and the popularization of air travel, opened a new opportunity for growth for the company. In 1973, Panalpina launched a new subsidiary, Air Sea Broker, which brought the company into the growing air freight field. That company focused on air charter brokering, with a chief target being the growing oil industry in West Africa; Air Sea Broker also acted as a ship’s agency coordinator. By the end of the decade, the company had grown into a leading coordinator in the intercontinental shipping market.

In the early 1980s Panalpina continued to expand its international operations, including strengthening its position in North America. The company gained a larger share of that market in 1984 when it acquired Rohner, Gehring & Co. That company was then merged with Panalpina’s other U.S. holdings, forming a new subsidiary, Panalpina Inc.

European Leader in the 1990s

The 1980s saw Panalpina grow into a worldwide force in freight forwarding, particularly in the air freight segment. Air Sea Broker had begun a shift away from the traditional freight forwarder’s role of booking space on other carriers’ flights to taking control of its own network of charter flights. Working with Cargolux, Panalpina took out long-term contracts on several of that company’s chartered freighters. Over the course of the decade the company built up a worldwide network of cargo flights flying under the Air Sea Broker name. By the end of the 1980s, the company was carrying as much tonnage as many of the world’s airlines. The company now began to refer to itself as an “integrated forwarder.”

As Panalpina grew during the decade, it was able to use its buying power to persuade operators such as Cargolux to set up new routes to serve a wider range of Panalpina’s expanding operations. As one industry consultant told Air Cargo World: “Panalpina was prepared to do something no other forwarder would do, which is assume some of the prospective capacity risk. That created a whole new channel for just-in-time business.” Through the late 1980s, Cargolux had stepped up its development in such markets as South America, Southeast Asia, Australia, and West Africa.

Panalpina’s position as an integrated forwarder took a big step ahead when the company launched its very own 747 route between Luxembourg and Huntsville, Alabama. The route, which grew to seven flights per week, was operated using an airplane owned by Atlas Air and operated by Cargolux crew personnel, but was dedicated to Panalpina coordinated freight shipments. Inaugurated in 1990, this route marked the first of a number of similar Panalpina-controlled freighters that enabled the company to set up a worldwide heavyweight air freight network. That same year the company extended its reach into Africa with the acquisition of Interfreight, a business that had generated a strong cross-continental network.

Through the mid-1990s Panalpina continued to grow organically, building up its market position to that of Europe’s freight forwarding leader. Yet the beginning of a consolidation drive toward the end of the decade was soon to push the company out of the number one spot. Meanwhile, Panalpina was facing increasing competition as express and parcel delivery operators such as Federal Express and UPS began to add freight operations.

Full-Service Integrated Forwarder in the 21st Century

Panalpina was forced to fight back. As CEO Sidler told Air Cargo World: “I don’t think we can become another FedEx or UPS. But I am convinced we can carve out a sizeable chunk of business. We are now reversing the tables. These boys went for our piece of the market, and we are not just standing there like a rabbit in front of a snake. We are doing something, we are fighting back.” In 1999, Panalpina announced that it was forming a joint partnership with SAirLogistics, the cargo division of SAirGroup, parent company of Swissair.

The new company, called SwissGlobalCargo, took over all of Air Sea Broker’s air activities, as well as the Austrian, Italian, and Swiss operations of SAirLogistic’s Jacky Maeder Group cargo subsidiary. Significantly, the joint venture also gave Panalpina its own air charter for the first time. Panalpina held a 55 percent stake in the partnership, while SAirGroup acquired a 10 percent stake in Panalpina—a move that prompted speculation on a possible future public offering of Panalpina. The launch of SwissGlobalCargo created the industry’s first fully integrated air freight services group. In addition to offering door-to-door services, SwissGlobalCargo was able to promise guaranteed delivery times and “integrated hardfreight,” freight contracts with no weight limits. Said CEO Sidler of the joint venture: ’ ’For a long time we have differentiated ourselves from other forwarders with Air Sea Broker, but it has been very hard to make the breakthrough to being seen as an integrated forwarder. The perception among our customers was that we were not bad, but that we could not really offer true door-to-door service. But now people will look at us differently. Using Swissair, we can fine-tune the network so we can offer true door-to-door services.”

Panalpina soon found itself in full control of SwissGlobalCargo as Swissair floundered at the turn of the millennium. In May 2001, Panalpina bought out its partner in SwissGlobalCargo, and subsequently announced its intention to change its subsidiary’s name to ASB Air. At the same time, Swissair sold back its 10 percent stake in Panalpina to parent Ernst Göhner Foundation.

Panalpina continued to eye its global expansion, targeting specifically the U.S. and inter-Asian market. The company expected much of its near-term growth to come through organic expansion, including the setting up of a partnership agreement with U.S.-based freight forwarder AIT Worldwide in 2001. The company hoped to establish similar partnerships elsewhere, without ruling out making acquisitions to boost its presence in the Asian market.

Company Perspectives:

One perfect movement: Panalpina can manage each and every part of your supply chain. Anywhere in the world.

In order to bring its operations closer to its local markets, Panalpina underwent a reorganization at the beginning of 2002 that turned over much of its decision-making to four regional divisions: Europe, North and South America, Asia, and Africa/ Middle East/CIS. Although the company’s headquarters in Basel continued to guide overall development of the group, as well as coordination with the Air Sea companies, each regional division was given its own chief executive officer in order to respond to the specific demands of its market.

Principal Subsidiaries

Europe: Panalpina Management AG; Panalpina Finance Limited Jersey; Panalpina AG; Air Sea Broker AG; Pantainer AG; Panalpina Insurance Broker AG; Hausmann Transport AG; SGC SwissGlobalCargo AG; Jacky Maeder AG; Avalog AG; Panalpina Welttransport GmbH (Germany); Air Sea Broker (ASB Deutschland) GmbH (Germany); SGC SwissGlobalCargo (Deutschland) GmbH (Germany); Panalpina Aktiengesellschaft (Austria); Panalpina Welttransport GmbH (Austria); Jacky Maeder Luftfracht GmbH (Austria); Panalpina World Transport N.V. (Belgium); Air Sea Broker Belgium N.V.; Panalpina World Transport B.V. (Netherlands); Panalpina Luxembourg S.A.; Panalpina France Transports Internationaux S.A.; Panalpina World Transport Limited (U.K.); SGC SwissGlobalCargo U.K. Ltd.; Panalpina World Transport (Ireland) Ltd.; Panalpina World Transport ZAO (Russia); Panalpina World Transport Ltd. (Russia); Panalpina Trasporti Mondiali S.P.A. (Italy); Panalpina Transportes Mundiales S.A. (Spain); Panalpina Transportes Mundiais Lda. (Portugal); Pantrans Transitarios S.A. (Portugal); Panalpina AB (Sweden); Panalpina Logistics AB (Sweden); Panalpina World Transport Nakliyat Ltd. Srk. (Turkey). North, Central and South America: Tramo Holding Inc. (Canada); Panalpina World Transport (Eastern) Ltd. (Canada); Panalpina Inc. (Canada); Panalpina Inc. (U.S.A.); Management Logistics Services, Inc. (U.S.A.); Hensel, Bruckmann & Lorbacher, Inc. (U.S.A.); SGC SwissGlobalCargo, Inc. (U.S.A.); World Freight Corporation (U.S.A.); Panalpina Transportes Mundiales S.A. (Argentina); Panalpina Ltda. (Brazil); Management Logistics Services Comercial Ltda. (Brazil); Panalpina Chile Transportes Mundiales Ltda.; Panalpina Servicios Aduanales (Chile); Panalpina Transportes Mundiales S.A. (Chile); Panalquito, Panalpina Transportes; Mundiales Ecuador S.A.; DAPSA Depósitos Aduaneros Santa Fé Panalpina S.A. de Bogotá (Colombia); Invertrans S.A. Santa Fé de Bogotá (Colombia); Panalpina S.A. Santa Fé de Bogotá (Colombia); Panalpina Transportes Mundiales, S.A. de C.V. (Mexico); Panalpina S.A. (Panama); Panalpina Transportes Mundiales S.A.(Peru); Patrasa S.A., Agencia de Aduana (Peru); Panalpina Transportes Mundiales C.A. (Venezuela); Panalpina C.A. (Venezuela); Inversiones Ortrac C.A. (Venezuela); Panalpina Uruguay Transportes Mundiales S.A.; Asia and Australia: Panalpina China Limited (Hong Kong); Panalpina World Transport (India) Pvt. Ltd.; PT Panalpina Nusajaya Transport (Indonesia); Panalpina World Transport (Japan) Ltd.; Panalpina Korea Ltd.; Panalpina Transport (Malaysia) Sdn. Bhd.; Panalpina World Transport (Singapore) Pte. Ltd.; Panalpina World Transport Ltd. (Taiwan); Panalpina Taiwan Ltd.; Panalpina World Transport (Thailand) Limited; Panalpina World Transport (Pty) Limited (Australia). Africa, Near and Middle East: Panalpina Transportes Mundiais-Navegaçao e Tránsitos, S.A.R.L. Luanda; Panalpina Transports Mondiaux Congo SARL; Panalpina Transports Mondiaux Gabon S.A.; Panalpina (Ghana) Limited Accra; Panalpina World Transport (Nigeria) Limited; Panalpina Gulf LLC (Dubai); (Panalpina Qatar) WLL; Panalpina (Bahrain) WLL.

Principal Competitors

APL Limited; BAX Global Inc; CNF Inc.; Deutsche Post AG; EGL, Inc.; Exel plc; Expeditors International of Washington, Inc.; FedEx Corporation; Fritz Companies, Inc.; GeoLogistics Corporation; Kuehne & Nagel International AG; Deutsche Lufthansa AG; Nippon Express Co., Ltd.; Preussag AG; Stinnes AG; TNT Post Group N.V.; United Parcel Service, Inc.; UTi Worldwide Inc.

Key Dates:

1895:: Hans im Obersteg & Co. AG, a forwarding company based in Switzerland, is established.
1918:: Panalpina’s predecessor company is founded.
1930s:: Panalpina acquires Hans im Obersteg and expands into maritime shipping and international forwarding.
1954:: The company reorganizes under a single name, Panalpina World Transport.
1973:: Panalpina launches the Air Sea Broker subsidiary, which grows to become a leading air-based freight forwarder.
1984:: Company acquires Rohner, Gehrig & Co. of the United States, then regroups all of its U.S. operations under a single Panalpina Inc. subsidiary.
1990:: Company inaugurates Air Sea 747 chartered freight flights between Luxembourg and Huntsville, Alabama.
1999:: The creation of SwissGlobalCargo joint venture with SAirLogistics enables Panalpina to become an integrated logistics company.
2001:: Panalpina takes full control of SwissGlobalCargo, renaming the subsidiary ASB Air.
2002:: Panalpina reorganizes and adopts a regional operational structure.