Wind in the sails
DFDS is an international shipping and logistics group that has provided clients essential services for more than 130 years. It began in the Baltic and North Seas but through the decades has branched out throughout Europe, though Northern Europe remains its core geographic market today. Last year the company acquired British-based competitor Norfolkine, merging it into the DFDS group and adding Norfolkline’s English Channel and Irish Sea focus to the company’s established roll-on/roll-off (ro-ro) and lift-on/lift-off (lo-lo) cargo, combinining freight and passenger and port terminal services.
For the last year, the integration of Norfolkline’s infrastructure has been DFDS’s primary focus, with both parties looking to gain the best possible synergy between their respective networks. The outcome has been a significantly strengthened shipping network complimented by an equally strengthened Logistics Network, pre-dominately consisting of Norfolk Line’s previous Logistics operation. Jens Nielsen, vice president, illustrates: “DFDS has always been focused on building very strong shipping networks but we have been wanting, and increasingly so, to add fully-integrated logistic networks that compliment our shipping routes. With the acquisition of Norfolkline, we have achieved that. Our customers operate within a wide range of industries with many different needs and requirements; our belief is that to meet all of those fully, it is necessary to operate and control a network that consists of the correct shipping and logistics capabilities, complimented by strong partnerships.”
As executive vice president Peder Gellert explains by highlighting the English Channel as an example, there are challenges in taking on a company like Norfolkline, which was an established figure in a highly competitive sector: “There is a lot of competition for public transport across the Channel between not only three ferry operators but the Channel Tunnel as well. However, we quickly realised that we could gain advantages by streamlining as we have done elsewhere in DFDS, for example by reducing costs without cutting staff. This streamlining initiative was named Light Crossing. It has proven hugely successful and DFDS will look to take advantage from the lessons learned elsewhere in its organisation.”
DFDS also grasped at another opportunity that arose from the Norfolkline merger: the possibility of reorganising the whole group’s infrastructure. Formerly a sprawling collection of independently run companies, the decision was made to bring it under greater order by gathering all of its activities under two core divisions: DFDS Seaways and DFDS Logistics, the former incorporating passenger and freight services and the latter with door-to-door transportation and logistics solutions. The combined strength of the two divisions as well as that of carefully chose partners is used to develop tailormade supply chain solutions through a department called Freight Sales Solutions, effectively providing third- and fourth-party logistics (PL) solutions.
“We always look at how to create real benefit for customers,” state Jens. “Our solutions have to provide tangible value and we can only do this by developing a full understanding of our customers needs. We do, therefore, operate with dedicated Industry teams, who specialise in the following industries: automotive, forest products, metals, chemicals, fast moving consumer goods (FMCG) and project cargo. It is their responsibility to develop cost effective solutions where we, after consultation with our customers, seek to optimise asset utilisation, payloads, lead times, stock control and cargo safety whilst minimising cost.”
Examples of this could be DFDS putting a freight management team directly into the manufacturing facilities of a car maker to manage the entire supply chain from inbound supplies and stock control to finished vehicle shipping and the distribution of parts. Another example could be for a client within the forest products industry: DFDS collects raw timber by rail, on a cassette, from a mill in Sweden, transfers it to vessel, provides storage services in country of arrival, then delivers it by rail or road. All of this would be managed from one control centre.
On the passenger side, DFDS has also been extending its services throughout routes and new destinations across Europe. “Last October one of our ships in the Baltic Sea was destroyed by fire: we just chartered a new boat to substitute it and it offers us a vastly increased capacity on several corridors in the region,” says Peder. “We also introduced in June 2011 a new service linking Kiel in Germany to Ust Luga, Russia. This will be a combined ro-ro and passenger ferry that links with rail terminals at either end to support the existing Kiel-Karshamm to St Petersburg route we already provide.”
The infrastructural changes are close to finishing, with Peder predicting the project will be wrapped up within six months. Once completed, DFDS will once again be able to put its full weight behind looking at strategies for growth both organic and through acquisition. Despite economic instability across Europe making market unpredictable for the near future, DFDS believes its concerns are balanced by the reliability and quality of its services that will ensure business continues. “We see strong performance in most parts of our business right now despite the economic uncertainty,” concludes Jens, “but we will follow developments closely and will be ready for any potential downturn. Overall, we feel that DFDS is in an excellent position at the moment and want to keep it that way.”
Recently undergone major restructuring
Introduced new passenger and cargo routes
Now looking to strengthen existing services