Barbara Frenkel, Head of Purchasing at Porsche, and DB Schenker CEO Jochen Thewes meet in the middle of the port of Hamburg. The prototype of an electric racing car is quite misplaced between stacked freight behind the large container gantries.
It is scheduled to be shown at events such as the Long Beach, California Grand Prix in April. The sports car manufacturer sends the vehicle on a 13,000-kilometer world tour with the German forwarding agent – by ship, train and electric truck. But the climate ambitions of the two managers go far beyond that.
WELT AM SONNTAG: Ms. Frenkel, Porsche drivers have little to do with logistics companies, except that they may be annoyed by trucks on the freeway. What points of contact does your company have with DB Schenker?
Barbara Frenkel: DB Schenker transports the Porsche GT4 e-Performance and also parts of our fleet. We are united by a green logistics strategy. A finished vehicle from our factory starts its journey to the customer by rail transport, which in most cases is operated with regenerative green electricity. For further transport, it is conceivable that our logistics partners will gradually use trucks with electric drives in the future.
WELT AM SONNTAG: Are you not using them yet?
Frenkel: Together with a partner, we have gained initial experience with the use of e-trucks. From everything we hear, the supply of e-trucks is still small, with comparatively long delivery times. Thanks to our transport by rail, we have already been able to save around 8,700 tons of CO2 per year. Switching to trucks will be the next big step.
WELT AM SONNTAG: Mr. Thewes, in a newspaper article in 2018 you announced that you would quickly increase the proportion of electric trucks in your fleet. Be honest: You haven’t gotten very far with it so far.
Jochen Thewes: It’s still in the single-digit percentage range. We buy almost every truck with alternative drives that we can get our hands on. For example, we ordered 1,500 electric trucks as an option from Volta, a start-up, and 2,000 electrically powered trailers from Krone. They can relieve the diesel tractor and reduce consumption.
WELT AM SONNTAG: Porsche obliges suppliers to produce with green electricity in order to reduce overall CO2 emissions. How is the logistics?
Frenkel: We demand proof from our suppliers that they operate sustainably. This also applies to logistics. Our locations in Zuffenhausen, Leipzig and Weissach are already CO2-neutral on the balance sheet, and the suppliers are also working on this.
WELT AM SONNTAG: But there is still an insane amount of CO2 coming from the logistics chain. There is obviously a need to catch up. How do you fix that?
Thewes: We have to be honest: there is a claim, but there is also a reality. We have already spoken about the fleet, but the availability of biofuels is still limited. We are already using these fuels in shipping with the shipping company CMA CGM, and we will soon conclude a similar agreement with another large shipping company. You can also book CO2-neutral air freight via our network.
WELT AM SONNTAG: But these are only pilot projects?
Thewes: We’ve gone well beyond pilot projects. For example, we are neutralizing our worldwide volume of less than container loads. Here in the port of Hamburg, we pack and load 2,000 tons of freight per week in a CO2-neutral manner. Our flight together with Lufthansa from Frankfurt to Shanghai goes once a week; That’s around 300 tons of air freight capacity per round trip, which we completely neutralize. The pilots use organic aviation fuel, which is made from used vegetable cooking oil, such as deep-frying fat from the catering trade.
WELT AM SONNTAG: Porsche is involved in a project in Chile to produce CO2-neutral fuel. Is the system already running?
Frenkel: Together with international partners around the operator HIF Global, we are building a pilot plant in Chile. We expect to produce the first liters in December. There we want to show that e-fuels can be produced on an industrial scale.
WELT AM SONNTAG: Could you imagine that Schenker would also be involved in such a project?
Thewes: Yes we could, why not?
WELT AM SONNTAG: Where do your bio-fuels come from?
Thewes: We get them from classic suppliers like Shell and BP. Also because we have to make sure that they are certified and meet quality standards. For the return flight between Frankfurt and Shanghai with a Boeing 777, you need around 175 tons of fuel per flight, i.e. 9100 tons per year.
WELT AM SONNTAG: Annual production in Chile is said to be around 130,000 liters in the first year. That wouldn’t even be enough for a sightseeing flight.
Frenkel: We are at the beginning of the development. The e-fuels currently on the market come from small pilot plants. After the pilot phase, the project is expected to reach around 55 million liters per year with the first scaling by the middle of the decade. Around two years later, the capacity should be 550 million liters.
Thewes: Then it becomes a shoe.
Frenkel: From then on there are also the necessary economies of scale to set the price for e-fuels in line with the market. We want to feed the fuel into the so-called energy lake as an admixture. It is important that we reduce the bottom line of CO2 emissions of fossil origin – worldwide.
WELT AM SONNTAG: How high are the prices for alternative fuels at the moment?
Thewes: It’s almost three times as much – just for the fuel, for example the sustainable kerosene that we use.
WELT AM SONNTAG: So you need customers like Porsche who can pay this price?
Thewes: Not necessarily. Our first priority is to make such offers available and to show that the switch is possible. We all have our carbon reduction targets – now we need more supply to make prices competitive.
Frenkel: I have the impression that politicians are increasingly recognizing that we cannot put everything on one card. The federal government is planning to have around 15 million electric vehicles on German roads by 2030. But then there are still 33 million combustion engines on the road. E-fuels offer an opportunity to advance decarbonization nonetheless. At Porsche, we aim to deliver more than 80 percent of our new vehicles as purely electric models by 2030. At the same time, we have to think carefully about what happens to the existing combustion engines on the streets.
WELT AM SONNTAG: For example with your diesel truck.
Thewes: Absolutely. In the short term, alternative fuels have the greatest benefit. Because we won’t be able to electrify the entire fleet fast enough. There is a lack of charging infrastructure, vehicle availability and power grids. We support the goal that in future 25 percent of freight transport should be by rail. Conversely, this means that 75 percent are still driving on the road.
WELT AM SONNTAG: Do you have a plan for fleet electrification?
Thewes: We have CO2 targets for the whole company. It’s no use electrifying a lot of trucks, but still generating an incredible amount of CO2 in air freight. In addition, we only own a fraction of the fleet itself. We are working on the issue with our subcontractors.
WELT AM SONNTAG: How much CO2 does Schenker emit?
Thewes: It’s around twelve million tons per year across all modes of transport and purchased transport services.
WELT AM SONNTAG: According to the annual report, Porsche only has 9,000 tons. That’s all?
Frenkel: That is the consideration of the direct and indirect CO2 emissions at our largest German locations. We compensate for unavoidable CO2 emissions through climate protection projects. Porsche is working towards a balance sheet CO2-neutral value chain in 2030. And our future all-electric cars should also have a CO2-neutral balance throughout their entire use phase. We are currently also starting in the supply chain and are defining, for example, decarbonization targets for future vehicle components.
WELT AM SONNTAG: Are high energy prices a problem?
Frenkel: They are a major burden for many suppliers. Some of the manufacturing processes are very energy-intensive. And it is not always possible to pass on all costs. The suppliers must therefore ask themselves what part of the price increases they can compensate for through increases in efficiency.
WELT AM SONNTAG: A major problem in recent months has been the stability of global supply chains. How tight are they currently?
Thewes: They are much more stable than they were months ago. This has to do with the slowdown in demand, for example in the area of consumer goods. Accordingly, the capacity bottlenecks on the ships, in the container rounds and also the port congestion have eased. We haven’t had any major disruptions for a long time, like the accident in the Suez Canal or the corona lockdown in Shanghai. At the beginning of the year we had a point where more than 15 percent of the world container fleet was standing still.
WELT AM SONNTAG: Is a logistics company like Schenker a kind of critical infrastructure, does Germany need such companies in its own country?
Frenkel: Definitely yes. We need reliable partners. That is why it is important for us that our partners have a long-term strategy and that we formulate common goals.
WELT AM SONNTAG: Can you be such a partner if DB sells Schenker?
Thewes: Absolutely. I think a company of our size, which is one of the market leaders and has been around for 150 years, deserves to be able to be strong and alone in the market in the future. That is where all our efforts go.
About Barbara Frenkel: Barbara Frenkel, 59, has been working for the sports car manufacturer Porsche for more than two decades. Last year, she rose to the company’s board of directors, as head of procurement. Previously, she had managed the company’s sales in Europe, among other things. Frenkel started her career at the supplier Helsa. The qualified chemist comes from Hof in Franconia.
About Jochen Thewes: 51-year-old Jochen Thewes has been head of DB Schenker, a subsidiary of Deutsche Bahn, since 2015. Previously, he was Head of Asia based in Singapore. Before joining Schenker, Thewes worked for competitor Kühne Nagel, including in Brazil, China and Vietnam. The business economist comes from Rheda-Wiedenbrück in East Westphalia. The sale of Schenker is currently being discussed in politics; Deutsche Bahn could invest the proceeds in the billions into the rail network.
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