DP World Europe’s chief executive on overcoming industry challenges and implementing the company vision
DP World Europe chief executive and managing director Rashid Abdulla has led his region through the pandemic and is implementing the company’s vision: to be an end-to-end service provider.
Mr Abdulla’s experience has stood him in good stead, having worked in both production and corporate roles. Previous positions include managing director of DP World’s Asia Pacific region and senior vice president global operations at the company’s head office. In his current role, he oversees the regional portfolio, which includes one logistics park and 20 terminals in 12 countries, made up of nine container terminals, nine inland terminals and two multipurpose terminals.
Looking back at the pandemic and the turmoil it has created in the supply chain, Mr Abdulla is proud of how the company performed and managed challenges both in Europe and globally.
He recalls, “We have just been through the pandemic, and one of the major achievements and focus by us was to ensure the safety of people, continuity of production and that customer service and the trade community were well served.
“In comparison to our global competitors, I am very proud to say that DP World maintained continuity in all countries in which we operate in without any stoppage.”
The supply chain disruption caused by the pandemic meant port arrival times were changed and window reliability was impacted.
Highlighting the challenges ports had to deal with, Mr Abdulla says, “Lack of capacity in warehouses impacted the whole supply chain and this was reflected in container dwell times at ports. This started in the pandemic and became extreme afterwards, with the dwell time in Europe having doubled compared with before.”
Mr Abdulla explains how DP World dealt with the challenges, from encouraging stakeholders to move containers, to boosting trucking and offering incentives.
“We kept the ports functioning and efficient,” he sums up.
While this situation has calmed, and GDP has bounced back to growth following the pandemic, there are now new challenges to be faced, including the Ukraine war, rising inflation and the impact on energy prices.
Mr Abdulla explains, “The Ukraine war impacted everything, and we saw challenges in terms of capacity management in the east Mediterranean and in Black Sea ports as well as in north European hubs in terms of sanctions.
“We have reflected on port capacity and provided support to shipping lines to deal with unexpected events.”
Turning to other major supply chain challenges, Mr Abdulla says, “We saw the lack of resources in internal warehouses and transport and costs started to increase, especially in Q2 this year. And we still see costs increasing due to unprecedented inflation.”
He singles out the huge impact this has on terminals: energy costs at DP World’s fully automated terminal in Rotterdam have increased significantly year-on-year.
“We need to recover our costs from customers, but for the time being, we will absorb the costs. Some of the badly impacted terminals might introduce a surcharge to partially recover these unprecedented cost increases,” says Mr Abdulla.
He points out the achievements of the company over challenging times. In 2021, DP World achieved a 26% revenue increase. “We grow rapidly, and this year we increased by 60% [in revenue] for the first six months.
“Our business plan for the last 10 years shows resilience and a long -term vision for the company that has dealt with unpredicted events, and we have been very reliable.”
For example, during the pandemic, the company secured two business acquisitions – Swissterminal to operate three Alsace ports, and TIS Container Terminal in the Port of Yuzhny, Ukraine – and expanded its facilities in Antwerp.
Four pillars
Looking at DP World’s long-term strategy, he explains there are four pillars: ports and terminals; logistics; marine services and technology.
Mr Abdulla says, “These are all part of DP World’s vision, to become an end-to-end service provider and not just a ports and terminals operator.”
And crucial to DP World’s vision is digitalisation.
“We see the demand of digitalisation from customers,” says Mr Abdulla. “We are investing heavily in port community systems, terminal operating systems and interfacing with port community stakeholders.”
In addition, the company has invested in a freight forwarding digital platform, for cargo flow and trade finance.
Mr Abdulla expands on the company’s vision, “We are going to produce end-to-port and port-to-end services for customers, supported by digital platforms, and the right investment in the right location, including developing capabilities in the supply chain including transport, warehousing and freight forwarding.”
He says this will be developed organically and through strategic acquisition. He sums up, “This is our aim, and we are on the journey towards achieving this.”
DP World launched its vision in 2016 and its acquisitions in the last seven years reflect this by diversifying the company’s focus from just ports to include marine and logistics companies, with acquisitions including shortsea operator Unifeeder, among others.
DP World’s freeport focus is a part of this vision. Singling out the UK, Mr Abdulla says DP World has supported the government with business cases for a freeport from the beginning and has helped with analysis by making a comparison of several types of freeports around the world.
DP World’s London Gateway freeport is now 35% utilised. “This will be great for the supply chain,” says Mr Abdulla.
It offers shipping lines and other customers benefits when it comes to its UK terminals. It has what it calls a “two-port strategy” for London Gateway and Southampton.
Mr Abdulla says, “This offers flexibility to shipping lines to access capacity and allows us to show flexibility over peaks in last five years. We give customers a two-port facility access and we change this based on network adjustment by shipping lines as well as the size of the ship and the beneficiary cargo markets they want to capture.”
This is supported by a state-of-the-art CMS system.
Highlighting the success of its flagship UK terminal, DP World announced in September this year that London Gateway has handled its 10 millionth container, just nine years after the smart logistics hub on the doorstep of the capital opened for business.
The milestone illustrates the track record of growth at London Gateway, which last year transported 1.8M TEU, an increase of almost 650% compared with its first full year of operation in 2014. A £350M (US$397M) fourth berth, now under construction, will further increase capacity by a third when it opens in 2024.
Elsewhere, sustainability forms a large part of DP World’s focus, and the company has developed a roadmap for zero emissions by 2050.
Mr Abdulla says, “We need to deal with the legacies of industry reliance on diesel equipment, so we are working on electrification and alternative fuels. Hydrogen is one of the initiatives to consider in future.”
An example of DP World’s work in this area includes moving its Southampton terminal’s straddle carrier fleet to hydrated vegetable oil (HVO).
“It has worked very well because the concept is viable operationally and commercially and it has ticked all the boxes for sustainability,” says Mr Abdulla.
Southampton started with 10 straddle carriers and is rolling the move out for the rest of the terminal’s fleet.
The initiative comes on the back of the move to HVO in Antwerp. “We transformed our facility in Antwerp and our CO2 emissions dropped by 30%,” comments Mr Abdulla.
“We have tried to collaborate with international institutions and shipping lines to be part of the solution to provide facilities for ships for alternative fuels. We have spent a lot of time reducing trucking times and waste with a booking system which is related to efficiency but also reflects the environment.”
To the future
Looking ahead, DP World is rolling out its US$3Bn plan for the next three years into Antwerp, the UK and Rotterdam. “We are aligning ourselves with the expansion plans of shipbuilders and new orders by analysing utilisation and capacity.”
Looking to 2023, he says there will be uncertainties in Europe, so the company sees flat growth next year but positive growth in 2024.
Mr Abdulla says, “We have built into our business plan the GDP growth of the region and countries, and the commercial intelligence we have in businesses. We have the right tools to adjust and respond to the changes that could take place.
“We are very confident about our position in Europe and our value proposition to customers is second to none.”
Speaking of what he is most proud of when it comes to his own achievements, Mr Abdulla says, “In the pandemic, ensuring the safety of people was one of the major tasks and I am very proud of that. I delivered the business plan to ensure sustainability of the company, community, port users and customers.”
He concludes, “I am part of the future planning and execution of DP World’s vision, and I consider myself part of the growth of the region and the company.”
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