The LOGISTICS Corporate Division is represented by the Danzas group, whose Solutions, Intercontinental and Eurocargo Business Units offer services along the entire supply chain, including tailored logistics solutions, worldwide air and ocean freight, project forwarding and European overland transport.

Terrorist attacks hit industry hard
The horrific terrorist attacks in New York and Washington on September 11, 2001 had a direct impact on the entire logistics industry. For several days following the attacks, no goods could be transported via air into or out of the USA, and even after flights resumed, trade was severely curtailed due to increased security measures. Major multinational customers held back in light of this tense situation, which led to a decline in air freight shipments.

The sharp economic decline, especially in the USA, is forcing companies to cut costs further and to optimize their processes. One measure taken to this end is the outsourcing of complex logistics projects to specialized service providers such as Deutsche Post World Net. An international presence, robust IT networks, short transit times and one-stop solutions are becoming increasingly important.

Revenue rises further
In the past fiscal year, the LOGISTICS Corporate Division again boosted revenue substantially, increasing it by 10.4% from 8,289 million in 2000 to 9,153 million in the year under review. This rise is the result on the one hand of further organic growth and on the other of the initial consolidation of Air Express International (AEI) for the full fiscal year.

The Solutions Business Unit reported a significant increase in revenue for the year under review. Revenue rose by 20.9% from 1,214 million to 1,468 million. The primary reason for this increase is the entry into force of the comprehensive logistics services agreement signed with Deutsche Telekom in 2000. In addition,we also concluded a series of further outsourcing agreements. For example, we handle the logistics for European returns for the fashion manufacturer Mexx. During the five-year contract term, we will sort, check, and store around 11 million items of clothing which will subsequently be shipped to Mexx Factory Outlet Stores.

Revenue growth of 14.1% in the Intercontinental Business Unit resulted in an increase from 3,849 million to 4,390 million due in large part to the initial full-year consolidation of AEI.

The downturn in the economy, especially in the high-tech industry, is having a particularly negative effect on the air freight business. Despite this, the Intercontinental Business Unit can look back on a successful year. We are currently the number one air freight company in the world and are among the top three in ocean freight; both rankings are measured in terms of revenue and volume, respectively. The business unit's expansion strategy focused on Latin America in 2001. For instance, international healthcare specialist Roche commissioned us exclusively to handle its Latin American transport business. We are responsible for all air and ocean freight between Roche's production facilities in Argentina, Brazil and Mexico, as well as for deliveries to customers all over Latin America.

After the full integration of ASG and Nedlloyd ETD,which were acquired in prior years, the Eurocargo Business Unit concentrated on optimizing internal processes and streamlining the organization of its pan-European network. Against this backdrop, we commissioned one of the largest warehouse and transshipment centers in Europe in Hamburg. This terminal serves as a gateway for Scandinavia and the Baltic States and expands our capacity for our outsourcing business. On the whole, the business unit was able to further consolidate its leading market position and operate more profitably. Revenue rose by 2.2% from 3,225 million to 3,295 million. The business unit also compensated for declines in shipping volume in Germany, France and Sweden with positive growth in other countries.

Earnings rise despite weak economy
Profit from operating activities (EBITA) rose from 113 million to 159 million compared with the prior year.

The Solutions Business Unit saw a substantial increase due to the positive course its business took during the year. The Intercontinental Business Unit's profit exceeded the previous year's figure, although the weakness in the global economy was particularly noticeable here. The Eurocargo Business Unit recorded a considerable improvement of earnings attributable to process optimization and the realization of synergies achieved through the integration of the acquired companies.

Investment in a robust network
Investments in 2001 amounted to 448 million and were channeled toward enlarging the network and improving IT infrastructure. The network was expanded mainly in the Intercontinental Business Unit by forming joint ventures and acquiring companies that were already working exclusively for AEI. Central and South America were the focus of our activities in this regard: in Columbia,we acquired a former agent, Florcarga, one of the leading logistics companies in that country, and we formed a joint venture in Mexico with Doal S.A., an equally prominent logistics service provider.

Acquisition of Cargoplan/Cargoline group
In order to further round off our air freight business, we acquired the Austrian Cargoplan/Cargoline group in November. This company is one of the leading providers of air freight services in Central and Eastern Europe,operates numerous overland transport routes and possesses significant warehouse capacity. In 2000, the company generated revenue amounting to around 80 million.

Outlook
The LOGISTICS Corporate Division with its excellent market position, broad product range and international customer base, has set its course toward further growth.

We anticipate that the LOGISTICS Corporate Division will continue to develop positively in 2002 despite the continuing weakness in the economy.

The key to the future of the logistics market is supply chain management (SCM). SCM is defined as customized solutions that cover all processes along the entire supply chain and optimally synchronize incoming and outgoing flows of goods and warehousing. In line with this trend, we implemented a customer relationship management system which enables us to provide each of our customers with a single point of contact to handle all of their logistics requirements.