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38 Trailer services
DFDS annual report 2009
Markets, activities and customers
Trailer Services provides door-door transport solutions of which
the majority utilises DFDS’ route network in order to contribute
to the network’s capacity utilisation. The primary market area
is Northern Europe.
The most important customer groups consist of importers and
exporters of consumer goods, as well as manufacturers of heavy
industrial goods, especially the automobile industry, whose logistics
requirements include a significant element of transport by sea.
Market trends
Like the Group’s other freight-based business areas, the market
trend for the door-door segment was characterised by a declining
level of activity.
Traffic between Sweden and the Continent was affected by
reduced demand from the automobile industry, while traffic between
Scandinavia and the UK experienced a shift in balance that resulted
in increased equipment and positioning costs. Overcapacity on the
market led to falling demand and greater price competition.
In general, no significant changes in demand are expected in
2010, but some growth is envisaged in markets where DFDS’ current
market share is marginal. The primary focus will continue to be on
improving profit margins through increased productivity and sales.
Trailer success criteria
The most important success criteria for Trailer Services are reliability
of capacity, and delivery based on competitive cost levels. It is also important
that combined trailer solutions, which utilise both rail and sea,
provide a more environmentally positive alternative to road transport.
Integration of the business area
DFDS’ door-door IT system was installed in Sweden and Norway
in January 2009. By mid-2010, all trailer companies in the business
unit are expected to operate on the same IT platform. This
will increase the possibilities for co-ordinating sales resources and
optimising traffic, and will improve utilisation of the established joint
trailer pool. It will also provide opportunities to further streamline
administrative processes.
In 2009, management of the Dutch subsidiary of SpeedCargo was
merged with DFDS Container Line. Likewise, management has now
been integrated in Norway, Belgium, the UK and Ireland.
In order to strengthen the overall network and increase geographical
coverage, integration of subsidiaries in the business unit will continue
in 2010. Another important objective of the integration process
is to continue to strengthen the basis for offering network solutions
that incorporate multiple parts of DFDS’ route network.
Activity DEVELOPMENT
Despite difficult market conditions and lower level of activity, financial
performance improved in 2009. This can largely be attributed to the
activities of the Belgian company Halléns and SpeedCargo’s activities
in the UK and Germany. Traffic was reduced between the UK and
Scandinavia, mostly as a result of major imbalances in the flows of
goods. The management of the Swedish SpeedCargo subsidiary was
replaced in May 2009.
Merging administrative tasks with similar functions in Container Shipping’s
offices led to more efficient overall financial management. The falling
level of activity also necessitated adaptation of the organisation, with
an 8 % reduction in the number of staff. The efficiency drive will continue
as all the companies in the business unit become increasingly closely
integrated, e.g. following implementation of the joint IT system.
Halléns’ traffic between Sweden and the Continent decreased
significantly as a result of lower production in the automobile industry.
Changes in the balance of traffic between Finland, Sweden and Denmark
resulted in greater unused capacity and increased haulage costs.
Halléns established a new trailer traffic between the Nordic Region
and the Continent/Spain, based on ro-ro routes between Zeebrugge
and Bilbao/Santander.
In December 2009, the German SpeedCargo subsidiary reached
agreement with the German transport and logistics company Schnellecke
to take over trailer activities between North Germany and the UK.
These activities make extensive use of DFDS’ ro-ro route between Cuxhaven
and Immingham, which is an integral part of the transport chain.
At the end of 2009, the trailer fleet comprised 1,400 units, of
which approximately one third were owned compared to two-thirds
previously. Overall, the trailer fleet has been reduced by 500 units,
notwithstanding the addition of 300 mega-trailers. The share of inhouse
haulage was also reduced on the Continent in order to achieve
greater flexibility and lower costs.
Trailer Services 2008 2009
DKK miLLION Q1 Q2 Q3 Q4 FULL YEAR Q1 Q2 Q3 Q4 FULL YEAR
Revenue 258 262 230 213 963 182 201 195 198 776
Operating profit before depreciation
(EBITDA) 15 9 5 2 31 12 13 7 4 36
Associates 1 0 1 0 2 0 0 0 0 0
Profit/loss on disposal of tangible assets 0 1 0 1 2 0 1 1 4 6
Depreciation -8 -7 -7 -6 -28 -6 -8 -9 -8 -31
Operating profit (EBIT) 8 3 -1 -3 7 6 6 -1 0 11
Operating profit margin (EBIT), % 3.1 1.1 -0.4 -1.4 0.7 3.3 3.0 -0.5 0 1.4
Invested capital, average 234 229 228 228 231 229 243 285 284 260
Return on invested capital (ROIC) p.a., % 12.5 4.9 -3.7 -6.8 1.8 9.7 8.5 0.1 -0.5 4.1
Shipments, '000 21 20 17 16 74 16 17 16 18 67