11 minute read
PROFILE
when it comes to getting talent into our organizations and getting young people interested in project forwarding. We are going to see, later down the line, the impact of the past two years in that we will have an even bigger talent shortage in the next two to three years, and that is a real problem.”
He said his business is in a better position than some because IP can “try to entice” people from the rest of the DHL group, which runs (among other initiatives) graduate schemes. He himself joined DHL as an ocean freight clerk 19 years ago, before moving across to projects.
“We do have some opportunities to bring people over from the other DHL business units into DHL Industrial Projects – but even so, it is going to be a challenge,” he said. “Our people are No. 1 – they are the reason for our achievements. If you have the right people around you, you are going to be more successful. If we can get the right people in the right roles, we are more than halfway there.”
OUTSIDE CHALLENGES
The pandemic, meanwhile, continues to have a direct and knock-on impact on day-to-day business. That includes supply chain congestion and delays, and huge demand on shipping capacity. The Ukraine conflict has now added a whole new dimension in terms of supply chain pressures.
“What’s available, at what cost and how can you secure needed capacity? It is a real challenge to source what we need for our customers. We continue to think it is going to change and we see indications that it will – then there is another port or terminal shutdown in China because of another Covid-19 outbreak or another factor such as war in Ukraine and that has a ripple effect, throwing everything into question.”
On the container side, you can get a rate out of a carrier but when you come to ship you find that what you were offered is no longer available. On the multipurpose side, capacity is being grabbed and sewn up further in advance of shipping dates than ever. “We see customers, in the renewables space especially, taking vessels for the next two years out of the market. We are waiting for more tonnage to come in, which will help, but all these factors coming together do make the situation difficult.”
Consequently, pricing ahead is a headache. “We are pricing work for mid-2023 now. Perhaps the market tells me the daily cost of a multipurpose vessel is hitting the peak and is going to level out or drop – but then suddenly another issue comes along. We work hard to manage the portfolio of risk in this rollercoaster of costs, rates and pricing as well as capacity.”
He does not, however, present this
DHL IP is now pricing for projects for mid-2023. CREDIT: DHL
as a negative; there is an accepted element of risk in taking on any business. “If we were just in the business of taking a price from a supplier and adding a margin and putting it in front of the customer, there wouldn’t be any value to what we do. We need to find a way to manage the risk, but also carry an allowable amount of risk for our clients; that is the value we are adding, taking elements of risk out of our customers’ hands.”
This means being close to current bunker prices, daily rates for vessels, capacity coming on main lines and port constraints in the countries IP is moving into or out of. “It is a matter to pulling all these factors together. But if you have the right people doing that and the right systems to support them, you are a long way towards solving the problem. And that is what we are here to do, to help our customers.”
IP had just completed a project in Russia just before the invasion of Ukraine. Services to and from Russia, as well as domestic services, are suspended now, but the main concern is for about 450 employees based in Ukraine. “We are doing everything we can to support our teams. We have halted services into Ukraine across all parts of the network, as well as into Russia and Belarus. We will reassess that further down the line and hope for an end of the war as soon as possible.”
THE GREEN ROUTE
The sustainability agenda is, meanwhile, generating large amounts of project cargo activity – across wind, solar, tidal and also hydrogen.
IP now has a dedicated renewables team, led by Lars Ingmann as global head of renewables and with Jacob Jensen as regional head for Europe.
“Expansion within the renewables sector is obviously a huge opportunity for us, and bringing in a new renewables head to lead the team underneath reflects this,” Foley said. “However, and as mentioned previously, it is going to take a lot of capacity out of the market. With more and more projects getting positive final investment decisions – and with the oil price going up, meaning projects that were on the cusp of being decided or not gaining investment will
TAKING ACTION ON DECARBONIZATION
Sustainability and decarbonization are, of course, high on the agenda. DHL Global Forwarding Industrial Projects CEO Ryan Foley said he is thankful to work for a company that takes sustainability so seriously.
“Deutsche Post DHL Group are spending €7 billion between now and 2030 to get to the point where we will be net zero by 2050 groupwide. We are not just saying ‘we will try to do this or that’ – as an organization we are putting our money forward and ensuring that this is what we are going to do,” Foley told Breakbulk. The first steps have included DHL Express’s order of the first-ever allelectric cargo planes and in cleaner, sustainably fueled 777s, investment in electric vehicles for final-mile logistics and sourcing sustainable marine and aviation fuel in order to offer a zerocarbon product, as well as operating fully solar-powered warehousing.
“We are doing a lot as an organization and that is filtering down into the more niche areas of the business,” Foley said. “From the IP perspective, we are trying to leverage that – talking to our customers and understanding what they want. It is a challenge in a very difficult market, but we are laying the foundations. We are working to push down into the roots of our customers’ operations and build on that – and I think things will happen in the next 18 months, as we see projects operating and requiring operational execution with an overall carbon-neutral target.”
DHL has four innovation centers, in Chicago, Cologne, Dubai and Singapore. “These are big think-tank locations where we are listening to customers, looking at what’s available in the market, talking about how we can drive change in the future. It is about working out how we can bring that to our customers and convincing them that we can continue to provide the service they want but with an alternative and sustainable approach,” Foley said.
CREDIT: DHL
now come back online – there will be a big influx of business to service with a lower capacity of equipment and people in the industry to deliver it.”
The strategy at IP has been, and will continue to be, taking experts from the other side of the fence, he said. “For example, our head of renewables joined us from Ørsted, the wind farm manufacturer and installation provider. We want to bring as much knowledge and understanding of the challenges that exist in the delivery of these projects to DHL Industrial Projects.”
Wind turbines are getting larger and heavier but are possibly now leveling out, he believes. “The challenge is not necessarily that the cargo is getting bigger than before, but that it is all coming at the same time and there maybe isn’t enough capacity long term to support it all. That’s especially the case when you see multipurpose vessels stepping in to take some of the business container lines can’t accommodate.”
There could be an additional threat from the container lines choosing to spend some of their unprecedented profits on expanding and seeking to provide their own end-to-end solutions – recent acquisitions by key container lines have reflected the appetite for vertical integration.
“Container lines are saying they want a piece of the whole pie, not just port-to-port,” Foley said. “Will they have the appetite to really get into the project market – not just handling individual project shipments but going after the whole project scope? That’s something we need to be wary of and monitor to see where it goes. We do see more and more players in different areas of our industry than perhaps there were in the past, but again a lack of real project experience. What we will do within DHL Industrial Projects is continue to be a specialist, with the right solutions and people to support our customers.” BB
Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors.
PROFILE
Port of Rotterdam is known for its versatility as a breakbulk hub.
CREDIT: ERIC BAKKER
SHOWCASING PROJECT CAPABILITIES
BY SIMON WEST
It is fitting that Breakbulk Europe, the world’s largest project cargo conference, is this year taking place in Rotterdam, home to Europe’s busiest deep-water port. Boasting specialized terminals for every kind of cargo, Port of Rotterdam is also billed as the region’s most versatile breakbulk hub.
Danny Levenswaard, director breakbulk at Rotterdam, said the port’s capacity to handle the most demanding heavy-lift moves was on show last year after it successfully transported an entire bio-oil pyrolysis plant from the Netherlands to Sweden.
Some 35 oversized modules measuring 20 meters long, 7 meters tall and 5 meters wide were collected in a single load and shipped for client M-Star Projects, who insisted the cargo was transported sustainably via inland shipping rather than overland. “It was a really nice projDanny Levenswaard ect that showed the capability of the forwarder, Port of Rotterdam but also of the production people here in the Netherlands,” Levenswaard said. “It showed the capabilities of the port companies, the terminal that handled this whole operation and the shipping companies who were able to ship the whole thing to Sweden.”
Levenswaard joined the Port of Rotterdam in 1992 following a successful 12-year stint as a professional saxophonist. After several roles in human resources, the one-time muso switched to the port’s commercial department, first as business development manager, then senior business manager for bulk and shipping.
He has been director for the port’s breakbulk department since early 2016, overseeing the commercial development of project cargo, heavylift, forest products, cars, steel and non-ferrous metals, agro-food and warehousing.
SUSTAINABILITY MATTERS
Levenswaard also sits on the Breakbulk Europe Advisory Board, a group of industry professionals brought together to help shape the program for this year’s conference, taking place on May 17-19. Amid these unsettled times, the Board’s 11 members have the exacting task of pinpointing and exploring the issues that matter most to the industry.
“If you look at the world today there are a lot of issues. I think sustainability across the supply chain is a big one. Companies are forced to produce and to work in a more clean and green manner,” the executive said.
A specific challenge for heavy-lift, meanwhile, is the ever-increasing size of cargo. The offshore wind energy industry in particular is being driven by constant technical innovation, with components such as monopiles and turbines getting bigger and more powerful every year.
“For onshore wind they were big already, but for offshore wind they are even bigger,” Levenswaard said. “This puts a challenge on ports in terms of port infrastructure, but also in the design of vessels.”
These issues and more will be explored in a series of panel sessions at Breakbulk Europe. Levenswaard, who attended his first Breakbulk event six years ago, said the conference is a surefire way of keeping pace with the market.
“One of the main tasks of the commercial department is to attract cargo to the port and to generate as much commercial activity in the port as possible. You do that by meeting people within the industry and trying to find out where you can be of service to each other.” BB
Colombia-based Simon West is senior reporter for Breakbulk.
