The logistics sector is facing unprecedented challenges, but companies like DFDS Seaways are showing how the industry can adapt.

DFDS Seaways is part of Danish-based shipping and logistics company, the DFDS Group, which operates in over 20 countries and employs nearly 12,000 people. The UK branch of the Group boasts a logistics division, a passenger division, and last but not least, DFDS Seaways itself, which is responsible for moving and handling freight cargo coming and going to five different countries.

“We offer 35 liner sailings per week, sailing every day at the same time, so we have a lot of capacity,” points out Andrew Byrne, Managing Director of DFDS Seaways. “Our terminal covers 170 acres, making it one of the biggest terminals in the UK. If you look at our throughput by units DFDS Seaways would be the eighth biggest port in the UK if it was its own port.”

DFDS Seaways has a significant geographic footprint, significant capacity, and capability.

“We’ve been doing this in the UK for over 150 years, so we know what we’re doing,” Byrne adds.

Logistics Challenges of the 21st Century

Of course, lately, logistics has been in the news thanks to numerous challenges facing the sector. DFDS is a 24/7, 363 day a year operation, with cargo arriving at or leaving its terminal every 50 seconds, so when the Covid-19 pandemic hit it could not simply close down for the duration.

Its staff were classed as key workers but track and trace or cases of infection could create huge problems in staffing and staff safety while DFDS was also handling resource challenges and keeping ships moving.

“Some ships are only in port for five hours, so that becomes difficult without the right amount of people,” Byrne says.

These challenges were only compounded by complexities introduced by Brexit.

“In terms of Brexit there are documentation challenges but we’re at the point where we believe we’re on top of that in terms of processes and customer knowledge,” Byrne reflects. “However, that issue still has a legacy of supply chain slow down and inefficiency. We need to create some resilience.”

The issue is that DFDS Seaways used to move the vast majority of its cargo from the terminal on day one. It would arrive and be gone within 24 hours.

“If the cargo wasn’t moved out on Day A it would go by Day B. Only 20% of the cargo was here more than 48 hours,” Byrne recalls. “Now customers can’t be sure that if the cargo arrives on Day A, that they will be able to deliver on Day A. So, they either slow the supply chain down or put more resources into the supply chain to keep it moving at the same speed but with more content. This means that today there is cargo that isn’t leaving until as late as Day E.”

DFDS Seaways imports around 5,000 freight units a week, and the average dwelling time for those units used to be two days. That translates to DFDS’s terminal needing capacity for 10,000 days of occupancy.

“Now they’re standing for three days, which means I need 15,000 days of occupancy and the terminal isn’t big enough,” Byrne says. “Our terminal is operating at over 100% capacity. We’ve more units on the quay than it can hold because things are moving slower.”

The situation presents DFDS Seaways, and other logistics firms, with a strategic dilemma. The only way to resolve the capacity issue is to increase footprint. This will raise costs, and customers are already being hit by Brexit so may not react well to price increases.

“Do we hold on tight and wait for things to get better, or do we assume this is the new status quo and act accordingly?” Byrne asks. “It’s been made more difficult because of the HGV driver shortage and Covid, which is why we started running the trains.”

A Ticket to Ride

DFDS Seaways has teamed up with iPort in Doncaster to run a trial train service until the end of Q1 this year and if there is an appetite for it the line will keep running.

The move to rail freight might be a surprising one for a Seaways based division of the company, but it is a move that takes Byrne into familiar territory.

“I worked in rail freight for 19 years before joining DFDS, so I have the knowledge and passion for the sector,” he says. “One of the issues was we were working out of the biggest port in the UK by tonnage, and the fourth by a number of units, but none of those units move by rail. Rail was only used for bulk or break-bulk products, so something we looked at doing was offering a train service for unitised cargo or cars.”

It is not the first time the company has looked into rail.

“We looked at trying to do this once before, two years ago, but there wasn’t an appetite among the customers then,” Byrne recalls. “What’s led us to do it this time is the HGV driver shortage which is threatening to undo years of development of slick and efficient just in time operations that rely on supply chains that operate equally as quickly and proficiently. The driver shortage is affecting our customers and so exacerbating the terminal space problem. With all that in mind, there is not a better time to provide a rail offering to complement the efficient logistics and transport operations which already successfully run out of the Port of Immingham.

“Rail continues to become popular as people look for ways to decarbonise, and we may develop a bespoke rail terminal,” Byrne says. “If we have up to four or five services a day we need some more significant facilities, so we are looking at land on or around the dock which we can develop for our rail operations.”

Meanwhile, the company is still planning to grow its facilities, while also offering a wider range of services.

“Last year we expanded our terminal by 20%, but even that isn’t sufficient anymore. So, we’re looking at how to deal with that and part of that is to continue to grow,” Byrne points out. “We need to develop more services and acquire more land. Next year we’re planning on moving a record amount of volume through the port.”