DP World has ventured way beyond its terminal operating roots as this in-depth feature for Maritime CEO magazine assesses.
Gone are the days where global terminal operators just invested in quayside developments. Today’s biggest names are reaching right across the supply chain. None more so than Dubai-headquartered DP World, which is now among the most diverse stakeholders in terms of the breadth of its investments related to container shipping.
In a recent post on LinkedIn headlined Data is the New Container, Sultan Ahmed Bin Sulayem, the group chairman and CEO of DP World, discussed how his company was currently “exploring the technologies and partnerships of the future” and how vital it is for his company to harness data to evolve the business.
The investment that attracted the most headlines over the past year was not data related per se. The $764m outlay to buy Europe’s largest feeder operator, Unifeeder, sparked huge conjecture among analysts.
“The acquisition of Unifeeder will further enhance DP World’s presence in the global supply chain and broaden our product offering to our customers – the shipping lines and cargo owners – with a view to ultimately reduce inefficiencies and improve the competitiveness of global trade,” DP World stated when buying the liner last August.
Commenting on the move into shipowning, regular Maritime CEO columnist Kris Kosmala was sceptical. Kosmala has long advocated ports take more aggressive actions in expanding services aimed at improving supply chain execution outside of ports’ gates. Ports should expand, Kosmala reckons, by building new disruptive services on the basis of the data they have about the shippers, the carriers and the cargo. The margins on such digital services would be similar to the margins seen in gateway port operations, Kosmala argues, something DP World has stated it is looking to harness.
“It has never crossed my mind that a port would instead expand by acquiring metal,” said Kosmala. “A shipping company would give an arm and a leg to generate margins of the port operators. So what is a highly profitable company doing acquiring a much less profitable company in a very different industry?”
There’s been plenty more eyebrow raising investments by this Dubai company recently. In May last year, DP World and Virgin Hyperloop One introduced DP World Cargospeed, an international brand for hyperloop-enabled cargo systems to create fast palletised cargo deliveries. The two companies claim DP World Cargospeed systems will deliver “freight at the speed of flight and closer to the cost of trucking”.
Travelling at top speeds of 1,000 kmh DP World Cargospeed systems, enabled by Virgin Hyperloop One technology, will transport high-priority, time-sensitive goods.
Meanwhile, in December an intelligent multi-storey container park was unveiled by DP World and German engineering company SMS. The revolutionary design will be built at DP World’s flagship Jebel Ali Terminal 4, in time for the Dubai Expo 2020 world fair.
Instead of stacking containers directly on top of each other, which has been global standard practice for decades, the system places each container in an individual rack compartment. Containers are stored in an 11-story rack, creating 200% more capacity than a conventional container terminal, or creating the same capacity in less than a third of the space. Thanks to the rack’s design each container can be accessed without having to move another one, enabling 100% utilisation in a terminal yard.
Bin Sulayem, the DP World boss, said at the unveiling: “Our engagement in new technologies is a major priority and we have become known for seeking ways that transform the way goods are moved across the world. Innovation is part of our DNA and at the heart of our success.”
Certainly DP World is transforming the role of the humble container terminal operator to become an end-to-end logistics solutions provider.
This article first appeared in the latest issue of Maritime CEO magazine, set for wide distribution across the upcoming Singapore Maritime Week. Splash readers can access the full magazine for free by clicking here.
It is always difficult to predict what is going to be disruptive and what ends up being simply an approach that does not have the benefit of vast amounts of practical focused experience. I guess the ebb and flow of industry sectors beyond their area of expertise will always be one of successes and retractions back to the core business focus. I will watch this one with much anticipation.