Automated Warehouses Forklifts on the March

Jungheinrich, the world's third-biggest forklift maker maker, is growing thanks to high demand for automated logistics services. The Hamburg-based firm plans to grow worldwide and is looking at takeover targets, its chief executive told Handelsblatt.
Benefiting from a warehouse boom. Source obs, Jungheinrich

As if by magic, self-driving forklifts st

ack boxes high to the ceiling at a new kind of warehouse in Kaltenkirchen in northern Germany.

It is a prime example of the logistical innovations being engineered by Jungheinrich, the forklift and warehousing specialist based in nearby Hamburg.

“The customer uses the building as a warehouse,” explained chief executive Hans-Georg Frey, in an interview with Handelsblatt. Then, Jungheinrich runs it all automatically.

The company, listed on the German midcap MDAX index, delivers everything from a single source, which is necessary for quick and automatic workflows. That extends from shelves and stacker cranes to forklifts and conveyor systems — all controlled by a central computer network, or “warehouse management system.”

In August, Jungheinrich expanded its automation possibilities by acquiring a Munich-based warehouse equipment maker, the Mias Group.

“With Mias, we have the know-how in our own establishment. That was important for us, to be able to offer everything from a single source,” said Mr. Frey.

The flow of goods in a warehouse can be controlled automatically. The system’s central computer networks with forklifts, which can signal what, when and where goods need to be reordered.

The complete flow of goods can now be controlled automatically. The system’s central computer networks with forklifts, which can signal what, when and where goods need to be reordered.

The self-driving forklift is a continuing development. Jungheinrich, for example, built a plant for BMW and fitted it with a dozen fully automatic forklifts. Thanks to standardized, repeated tasks, it saves the company labor costs — about 40 jobs worth.

Also, automatic forklifts no longer have to move only on contact loops or paths. “Today,” Mr. Frey said, “a forklift can be fully and freely programmed, thanks to GPS technology.”

Fully automatic forklifts can likewise be controlled centrally and their performance improved up to 30 percent. Mr. Frey calls it “an industrial evolution.”

Increased networking is changing the entire industry. The bigger German competitor, Wiesbaden-based Kion Group, is also developing new warehousing technologies.

“We want to remain a leader in the rapidly growing market for automatic logistics and material-flow systems,” Kion chief executive Gordon Riske said last May. At the time, his company had just acquired Egemin, the Belgian specialists in automatic logistics.

At Jungheinrich, warehousing technologies are growing more than its forklift business.

“Customers want more overall logistic solutions,” explained Mr. Frey, the chief executive at Jungheinrich. “Today, this business accounts for 25 percent of our new sales.”

About half of the Hamburg firm’s business comes from forklift and logistics systems. The rest comes from customer service, rent and used machines.

Nearly 50 percent of forklift sales go to big retail chains such as Edeka, Rewe, Lidl, Carrefour, Aldi and Tesco. Big logistic companies are another important customer group — for example, DHL, Kühne+Nagel or Dachser. And above all, the car industry and mechanical engineers count among industry customers.

Jungheinrich is looking to further expand its international business. It has bought distributors in Australia and in Malaysia and is looking at acquisitions in Europe and Latin America.

Mr. Frey sees a particular challenge in the online business. Previously, big pallets containing many small boxes had to be moved to the retailer – a relatively simple transport process. Today, however, it is just the opposite.

“It is a multiplication of transportation processes and there are smaller load carriers. All of that creates a much greater complexity,” said Mr. Frey. “It practically screams for automation.”

In 2015, Jungheinrich has seen a clear increase in orders: After nine months, sales were already about 10 percent more than the previous year’s total. Due to the continuing positive development, the executive board confirmed its 2015 forecast: Sales are expected to reach €2.7 billion, or about $3 billion, said Mr. Frey.

Sales are then expected to exceed €3 billion by 2017, and to hit €4 billion by 2020. “We are very well on course,” said Mr. Frey. “We are growing more quickly than the market.”

Measured by market share, the Hamburg company ranks third worldwide, behind Toyota and Kion.

Now Jungheinrich is looking to further expand its international business. Next to the Mias Group, there is already a distributor in Australia and in Malaysia respectively, which have been taken over.

“Moreover, there are also some smaller projects in Europe and Latin America in the pipeline,” said Mr. Frey.

Above all, the group wants to grow in Asia and the Pacific area.

“In Asia, new business dominates,” Mr. Frey said. “In Europe, most of our business is replacing older forklifts with newer machinery.”

The chief executive sees further opportunities in the United States, Canada and Mexico. There the business operates through a general importer — Mitsubishi Caterpillar Forklifts, or MCF — which distributes some warehouse machinery from Jungheinrich.

In Russia, the Hamburg company is particularly strong in distribution. “We are the market leader,” said Mr. Frey, “and have lost relatively little sales, even during the crisis.”

Forklifts and warehousing systems are still in demand there, he said.

During the 2009 financial crisis, the company’s business in Russia plunged about 90 percent to about 2,300 units. But hardly any employees were laid off and now that is paying off. Market share in Russia has recently increased despite the current Ukraine crisis and economic sanctions.

Meantime, the strategy of the long-established Hamburg company is paying off on the stock market. In 2009, shares sold for less than €10. Today, Jungheinrich is selling at a near-record price — over €70 a share.

 

Regine Palm is a Handelsblatt editor, writing about commodities, machine makers and the trade fair industry. To contact the author: [email protected]