DFDS – Navigating through unchartered waters

21 October 2021

Carrying both passengers and goods across the seas, international shipping and logistics company and SCC patron DFDS plays a crucial role in our everyday lives – making sure we have access to necessities such as groceries and medicine. The Link spoke to Jonathan Bailey, UK Commercial Director at DFDS Seaways, about the challenges they faced with Brexit and COVID hitting simultaneously, and how they managed to sail through the storm.

Founded in 1866, DFDS started as a merge of the three largest Danish steamship companies, mainly operating in the North Sea, English Channel and the Baltic region. Today, it is neither limited to the seas nor to the surrounding area. With its headquarters still located in Copenhagen, the company has broadened its territory significantly, including a recent decision to expand towards the south. “For the last three years, we acquired a business called U.N. Ro-Ro which is a heavy operator in the Mediterranean Sea, it offers services between France and Italy, then down towards Turkey and Greece. So, we have established a new link between the north and south of Europe,” says Jonathan.

Expanding across Europe

DFDS has not only expanded geographically, but also in terms of services. Historically specialising in sea services and shipping, it is now including other means of transportation such as road and railway. Today, the business is split into different divisions, with two divisions and two sub-divisions, operating on both land and sea. “We have a logistics business, which is a traditional road haulage service, including warehouse and door-to-door solutions. Then we have the ferry division, which operates the ferries, and within the ferry division, we have the freight division and the passenger division. The passenger services are primarily in the English Channel, and Newcastle to Amsterdam. The freight vessels, on the other hand, operate all over the North Sea, the Baltics, and now in the Mediterranean as well.”

Strong UK focus

Even with its roots in the Nordic countries and the recent expansion towards the south of Europe, DFDS has a strong focus on the UK. It has been operating actively in its main port in Immingham since 1995. 25 years in operation is an event Jonathan marks as an important milestone in the DFDS relationship with the UK – one they were unable to celebrate due to the pandemic.“The big milestone was last year, the 25th anniversary of being operational in Immingham. We had lots of things planned for the celebration, but it all got cancelled due to the pandemic. We will still celebrate that in time, whether it will be the 27th or the 28th anniversary, although that might not have quite the same ring to it. But we don’t really want to wait to the 30th.”

But having to cancel the silver anniversary celebration was not the only challenge brought on by the pandemic. Both lockdowns and safety measures had to be taken into account, while still having to meet the demands of the customers on delivering goods. “It would be fair to say that the last 18 months have been very much crisis management. Our absolute key focus was to keep our employees safe, but at the same time, we have a responsibility to the country to make sure the supply lines remain open. So even before things like lockdown became reality, we had to anticipate that something like that may happen, while trying to protect our people by reducing footfall through the port.”

Keeping food and medicine flowing through the country

Jonathan highlights the dilemma of trying to limit the number of employees having to work in office or at the ports, while still trying to guarantee that the necessary goods were delivered on time. “The biggest focus was looking after our people, but also the wider responsibility that we have in this industry, to keep food, medicines, and other things which were needed by a lot of people, flowing through the country. We had to be very agile and very reactive, while being as proactive as we possibly could.”

While staying alert to constantly changing policies and demands, the pandemic was hitting the business financially as DFDS saw a drastic fall in the demands of its services. “It was a very tough time, volumes dropped significantly, probably by about 30 to 35%, pretty much overnight. Q2 of 2020 was very, very quiet as the pandemic sort of shifted, but for each new wave we got better at knowing what to do and how to handle it.”

Jonathan says that the main lesson brought by the pandemic is how to increase flexibility in the way the service operates – with more focus on hygiene, less business traveling and higher allowance on flexible working.

Looking ahead

DFDS pre-pandemic goal was to double the size of the business by 2023, focusing on four key areas, including digitalisation, growing solutions for different industries, network expansion and added value for customers. According to Jonathan, this target is still relevant even with the changes brought by the pandemic. “We created four key pillars that focused on various things to achieve that growth. Apart from digitalisation, one is about growing solutions for selected industries, focused primarily on the forest, metals, waste and the automotive industry. The last two points are about developing and expanding our network through acquisitions as well as creating additional value for passengers.”

DFDS has several different projects coming up, and Jonathan is hoping that they will help the business achieve the goal, both by looking at how to improve internal systems as well as making different systems cooperate as efficiently as possible. “We are in the process of rolling out a new warehouse management system which should enhance the customer experience and make us a little bit more efficient. The other main focus is around the connections between the custom systems, particularly for us in the UK, but also export-wise in continental Europe and Scandinavia, and making sure those links are seamless.”

With the pandemic showing both the importance of and possibilities coming with digital solutions, DFDS is working to digitise parts of its services. The team is currently developing services for passengers to manage bookings and finding information directly online. Yet, the digital transition is a big step to take. “In certain industries, digitalisation takes some time to be grasped, and I suppose the logistics industry in general is one of those industries. But a big focus around digitalisation, and what it can deliver is about ease of use and speed of response. We are working on improving booking systems, and we have a new system called My DFDS freight, that allows customers to make a booking themselves within our system.”

Towards a greener, cleaner future

Apart from the digital transition, another transition happening all around the globe is the green switch. As a logistics company, DFDS is putting a lot of emphasis on sustainability when planning for the future, not least looking at emissions and the wellbeing of the marine wildlife. “We have a strategy that we are committed to delivering a reduction in our carbon footprint of 45%, minimum by 2030. We have several key environmental ambitions, such as supporting marine environment and to target a reduction of land-based electricity by 25% per employee, by 2023.”

Starting in 2006, DFDS is already a long-time member of the Orca Wildlife Monitoring Programme and has reduced its fuel consumption by 25% in the same period of time, by using technology and investing in improved and more eco-friendly vessels.

As DFDS is moving towards a future post COVID and Brexit, there are still some challenges waiting further ahead. Jonathan sees two main issues surrounding the infrastructure and the different – and not always compatible – goals of their customers and suppliers. He admits that the challenges will require some work and effort, but is nothing but optimistic when it comes to surmounting them. “One of the big challenges is to have the infrastructure in place to be able to deliver according to our targets. The second challenge is making sure that the goals are aligned between suppliers and customers. Our customers have their targets, which are not always the same as ours. So, aligning that across the entire supply chain is always a challenge – but with the right collaboration it is still achievable.“

After a stormy year and a half, DFDS seems to be arriving safely at shore, with business being back to its normal levels and the team being able to go back to focusing on the upcoming target. “Volumes have returned strongly after the pandemic. With a pre-Brexit rush happening, it meant that we had the busiest Q4 we have ever had, and this year has been pretty stable with volumes. As we go into 2022, we would like to see things back to pre-pandemic levels, with the main focus on the continuation of growth, and with our strategy for 2023 still in place.”