Annual Report 2024

Procurement and supplier management

Remit and strategic objectives

HHLA Group Procurement is firmly established as a strategic partner within the Group. It is involved in procurement projects at an early stage, providing value-adding support. Purchasing is a shared service provided by the Group's management holding company in Hamburg and deals with procurement activities on behalf of most of its domestic majority holdings. It also supports and advises Group companies as part of its holistic management of product groups, suppliers and contracts so that the service and performance requirements of internal customers are met as fully as possible.

For international shareholdings attributed to HHLA International GmbH, Purchasing also handles the procurement of large-scale equipment, which means that supplier management for strategic suppliers is organised in an efficient, centralised way.

Pioneering solutions are developed for the Group in close partnership with Operations and Engineering. In the process, HHLA draws on strategic and cooperative collaborations with select business partners. The aim is to establish a consolidated supplier base characterised by innovation, maximum added value, top quality and optimum life cycle costs. In addition to economic aspects, great importance is attached to sustainable procurement, which begins with the careful selection of suppliers. In the supplier qualification process, suppliers submit a self-disclosure confirming that they fulfil the quality standards of HHLA in the fields of sustainability, compliance, procurement and occupational health and safety.

Product groups and volumes

Procurement volumes

in the HHLA Group in 2024: € 436.7 million

Purchasing volue (pie chart)

The procurement volume of the HHLA Group amounted to around € 436.7 million in 2024 (previous year: € 332  million) and was distributed among the above-mentioned groups. Over the past three years, the proportion of capital expenditure has been well above the average amount of the previous years, which is why procurement volumes remain high. The portfolio covers a wide spectrum, divided into three main product groups: technical purchasing, construction purchasing, information technology (IT) and indirect purchasing. Technical purchasing deals with the procurement of port handling equipment and energy products and covers material procurement as well as the procurement of services needed to service and maintain terminals and technical components. The construction department is responsible for the product groups of construction above and below ground, railway construction and facility management. In addition to project management services, these areas also include planning and engineering services as well as maintenance and repair services. The main items procured by the IT and indirect purchasing department include software, hardware and telecommunication products, as well as services such as consultancy, marketing and HR services. The department also handles the procurement of office materials and personal protective equipment.

Selection of suppliers and service providers

When selecting partners, great importance is attached to sustainability and compliance as well as financial stability, quality, reliability and innovative flair. HHLA requires its suppliers and service providers to comply with its Supplier Code of Conduct, which covers the aspects of human rights, occupational health and safety, environmental protection and sustainability as well as appropriate conduct in a business environment. It is also available on the HHLA website. HHLA Supplier Code of Conduct Compliance with HHLA's sustainability standards plays a major role in minimising risks.

During the reporting year, nearly 95.9 % of the procurement volume was placed with suppliers who had pledged to comply with the requirements, or with similar regulations.

Another element of the supplier and risk management strategy is business partner screening which, for example, makes it possible to regularly check entries in various sanctions lists. Compliance with these criteria is monitored by an IT-based supplier management system. This also facilitates a continual review of the degree of fulfilment and the supplier base.

Overall, the procurement volume was divided between 1,984 active suppliers during the reporting period. Around 34.6 % of the volume was placed with suppliers based directly in Hamburg. Approximately 71.5 % of the procurement volume is attributable to business partners in Germany, although it must be said that, particularly in the case of capital goods and replacement parts in technical purchasing, as well as in IT services, the company often cooperates with suppliers that have sites in Germany but belong to international conglomerates. In 2024, half of the suppliers in technical purchasing accounting for the highest procurement volumes belong to international corporations, which made up 75.2 % of the volume. The supplier structure is generally highly dependent on our requirements.

Operational and strategic areas of focus

Due to ongoing geopolitical tensions and the associated risks to the supply chain, the topics of supplier and risk management were once again key focus areas of our strategic alignment in the reporting year. Procurement adopted a wide range of measures in order to further optimise these processes and thus fulfil the requirements of responsible procurement management. One key element is the implementation of the digitalisation strategy in order to support management and auditing processes in this area.

In addition to the necessity of making supply chains more resilient, another aspect is to take greater account of the compatibility of economic, ecological and social factors. This is being done with a view to further developing internal processes, meeting the requirements of the German Supply Chain Due Diligence Act (LkSG) or in preparation for the implementation of the Corporate Sustainability Reporting Directive (CSRD).

The ongoing improvements to purchasing and procurement processes remain a key component of divisional strategy. These include the digitalisation of operational processes in order to minimise the workload associated with repeated tasks and support strategic processes as effectively as possible. In 2024, a release upgrade of the existing catalogue system was completed, which means that the automation rate remains at a high level. In the reporting period, for example, 64.1 % of all purchasing processes were handled fully automatically (previous year: 64.5 %).

Terminal
In maritime logistics, a terminal is a facility where freight transported by various modes of transport is handled.
Value added
Production value – intermediate inputs (cost of materials, depreciation and amortisation, and other operating expenses); the value added generated is shared between the HHLA Group’s stakeholders, such as employees, shareholders, lenders and the local community.

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