Wednesday, October 9, 2019

Freight Forwarding Acquisition Initially to See Closer Integration Says New Boss

Possibility of More Takeovers Ahead in Road Haulage Sector
Shipping News Feature

DENMARK – SWITZERLAND – WORLDWIDE – The big freight forwarding takeover this year has been that of Panalpina by DSV, a company which has grown from humble road haulage beginnings to a leading international role in the industry, mainly by a policy of shrewd mergers and acquisitions. Now the new boss has spoken out about the plans ahead.

Thomas Plenborg, Professor, PhD, is the new chairman of DSV Panalpina A/S, and he says he has no plans for major changes when it comes to vision and business strategy with the intention over the next year to year and a half to focus on integrating Panalpina into the DSV fold. He continues:

“The Board met for a strategy session just a couple of weeks ago, and we all have faith in the existing vision and strategy. It has proven very successful in creating value, which is the foundation of all development, so we need to keep doing what we’ve been doing right.

“Now is not the time for a lot of new initiatives. We’ve made the biggest acquisition in the history of DSV, and we’ve made a promise to our shareholders that we can successfully integrate Panalpina. We are fully committed to delivering on that promise and believe in the many synergies that can come from the combination: better and more services, stronger networks, greater buying power. The business case is solid, and I believe it’ll be absolutely amazing once the integration is complete.

“We have a very strong and stable management team, and they know what they’re doing. They have the raw leadership skills needed to integrate two companies in an efficient and pragmatic way. They’re following in the footsteps of Leif and Kurt [Tullberg and Larsen] who laid the foundation for the DSV methodology, and they’re always looking to up performance.

“People [within DSV] are very productive and have a great work ethic and they like to measure their performance, so they continuously know if they’re doing better or worse than yesterday. And I can relate to that, it makes a lot of sense to look at how to optimise the execution of repeated tasks. Once we’re 12-18 months into the integration of Panalpina, and we can affirm we’re on track, then I think we’ll start to talk about the possibility of boosting organic growth through another M&A. The industry is still very fragmented, and there’s lots of scope for further consolidation.”

Plenborg has an academic background strongly involved with the Copenhagen Business School and has been a director of DSV since 2011. He expressed himself happy with DSV Panalpina’s focus on digitalisation and initiatives such as Innovation Lab to fast-track the implementation of new technology/innovative ideas and he hinted strongly that any immediate future acquisitions would again be larger, rather than smaller companies, and that the road haulage sector was of particular interest to the group, he elaborated thus:

“When the Road division’s new Transport Management System is fully developed and ready to scale, additions within this business area will be attractive for us. It’s all about increasing our network, within Road as well. [Additionally] the climate debate is starting to manifest itself among customers too, and we need to think more about what we can do to promote eco-friendly solutions. It’s a complicated problem, and we’d want to find a way without disrupting the industry, the global supply chain or our position as a profitable business.

”Right now, I think we’re all mostly worried about cyber security and the possibility of a cyber-attack, which is hard to prevent entirely. And it can be devastating, so it’s a serious risk. But I know IT in DSV Panalpina are doing everything they can.”