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34 terminal services
DFDS annual report 2009
Markets, activities and customers
The geographical region for DFDS’ Terminal services is dictated by
the need to support the internal shipping business units. Each location
is optimally placed to serve the lines in the most efficient and cost
effective manner. DFDS’ objective is to create hubs with operation
of several services to/from the same terminals, wherever possible,
enabling customers to optimise their own resources and minimise
their operational cost.
DFDS’ main customer segments are: unit loads (trailers/containers),
automotive, forest products, steel, chemicals and project cargo. It is the
terminal’s purpose to support DFDS’ growth by providing first class,
cost effective added value services such as: stevedoring, warehousing,
car compounds, timber terminals, road/rail distribution, transhipments
and project cargo solutions. The same services are to an increasing
extent also offered to third-party customers.
The terminal services are linked to DFDS’ shipping services by fully
integrated IT systems, whereby customers are provided with seamless,
tailor made IT solutions for their complete supply chains. Important
success criteria for terminal operations include:
n The efficient and safe processing of cargo
n Understanding the industry and customer needs
n Servicing several modes of transport
n Added value activities
n Contributing to the reduction of transit time and total lead time
Market trends
As a result of the high dependency on particularly own ro-ro volumes,
the operation and profitability of Terminal Services follows the market
trend for these shipping routes.
As for the global economy, the market conditions in 2009 were
very challenging for the shipping industry with a sudden decline in
volumes starting in the last part of 2008 continuing into 2009. As a
result, port terminals experienced insufficient capacity utilization and
therefore commenced a process of reducing capacity and costs to
match volumes. A first phase of this process was completed in mid
2009 and resulted in development of terminal operations with higher
levels of efficiency and a more flexible cost base.
Concurrently long-term developments are expected to favour
larger terminals, as there is an increasing demand for terminals with
high levels of efficiency and through-flow. This is expected to lead
to a gradual reduction in the number of smaller ports. In addition,
higher volumes from fewer shipping companies, using larger ships, will
increase the need for on-going productivity improvements in port
terminals.
Integration process
The process of integrating the Terminal Services business unit’s activities
began at the end of 2007. This integration is based on a joint business
model that describes work processes and defines productivity targets.
The model defines joint key operational data that form a basis
for benchmarking of productivity and exchange knowledge and skills
between terminals. This integration enables the organisation to evaluate
new concepts, solutions and strategies, in order to meet increasing
demands for productivity and thereby implement solutions which have
resulted in a reduction in costs.
Efficiency programme implemented in Immingham
2009 was a turbulent year for Terminal Services, with volumes down
on average by 25 % in the first half year, and up to 50 % in specific
areas of activity such as Automotive, Steel and Timber.
An extensive streamlining programme was initiated throughout,
but with particular focus on the largest terminal at Immingham. As a
result, the total workforce was reduced by 24 % against 2008, and cost
as a percentage of turnover was reduced considerably.
In the second half of the year the Immingham terminal experienced
a relatively robust recovery in volumes, including record
monthly volumes for both steel and automotive in the months of
September and October. Employees have supported the efficiency
and productivity measures positively and together with Management
ensured the productivity gains were fully cemented.
As ship’s sizes and capacity continue to increase, the role of port
terminals became increasingly critical. DFDS will for these reasons
continue to monitor and review all existing practises and capabilities,
to deliver continued productivity and efficiency gains, cost reductions
and improved performance.
Terminal Services 2008 2009
DKK miLLION Q1 Q2 Q3 Q4 FULL YEAR Q1 Q2 Q3 Q4 FULL YEAR
Revenue 168 169 166 144 647 128 135 145 147 555
Operating profit before depreciation
(EBITDA) 3 0 0 -34 -31 -13 -4 -1 4 -14
Associates 0 0 0 1 1 0 0 0 1 1
Profit/loss on disposal of tangible assets 0 1 0 0 1 0 0 0 1 1
Depreciation -6 -6 -5 -6 -23 -5 -6 -6 -5 -22
Operating profit (EBIT) -3 -5 -5 -39 -52 -18 -10 -7 1 -34
Operating profit margin (EBIT), % -1.8 -3.0 -3.0 -27.1 -8.0 -14.1 -7.4 -4.8 0.7 -6.1
Invested capital, average 419 408 401 356 391 314 321 321 300 312
Return on invested capital (ROIC) p.a., % -2.7 -4.3 -4.6 -43.4 -13.0 -22.1 -11.7 -7.9 0.6 -10.4
Tons, '000 4,543 4,199 4,033 3,656 16,431 3,246 3,356 3,552 3,848 14,002