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DP World

Enabling global logistics

Sector: Futuremakers
Themes:

DP World's ambition is to facilitate trade through strengthening global supply chains, generating sustainable economic growth and maximising shareholder value. The business is based in Dubai since 2007 and is the world’s most diverse listed container port operator. Container handling is the core business and generates more than three quarters of our revenue. In 2014, DP handled 60 million TEU around the world and over 70% of our volumes were origin and destination cargo.

DP World sees how global trade is changing. It continues to grow at pace, but – more importantly – it is transforming rapidly to meet the rise of a new generation of consumers, who demand both personalized products and customized services. For retailers at scale, this requires a comprehensive retooling of their supply chains. For logistics at large, this means significant changes are on the way – driven by new technologies and concepts.

This is an industry that already is at the leading edge of innovation. The McKinsey Global Institute estimates that the transportation-and-warehousing industry already has the third-highest automation potential of any sector. And according to PWC, there is “no other industry where so many industry experts ascribe a high importance to data and analytics in the next five years than transportation and logistics – 90%, compared to an average of 83%.”

Consider these five core technologies and trends that will shape trade and logistics in the 2020s:

  • Hyper personalisation
  • New cargo technologies (see Cargospeed, below)
  • Increased automation (see Boxbay, below)
  • Efficient marketplaces
  • Digitalisation

DP’s portfolio of more than 65 container and non-container terminals spans six continents. The business continues to invest in developments and expansions, with new developments to come in India, Africa, Europe and the Middle East. Many of its existing terminals also have the ability to increase capacity, as utilisation and customer demands grow. Its investment pipeline is anticipated to increase our gross capacity to more than 100 million TEU by 2020, subject to market demand.

DP World seeks to communicate their ambitions and business purpose and define their corporate culture through a framework of  Vision, Mission and Values, underpinned by the DP World Balanced Scorecard Framework.

DP’s strategic pillars define the objectives it needs to achieve across the group. They drive a sustainable business model, develop robust risk and compliance processes, communicate effectively to all stakeholders and implement our strategy.

The four strategic pillars are:

  • Strategy Implementation: communicating key messages and defining measurable performance milestones.
  • Corporate Governance: ensuring good corporate governance and adhering to international best practice.
  • Communication: enhancing communication with our people and external audiences.
  • Corporate Responsibility: building and sustaining strong communities through strategic investment, to leave a sustainable legacy and take the lead in being a good corporate citizen.

DP’s strategic priorities explain the strategy and describe how it will create value for stakeholders. Each of the four priorities are broken down into key goals to facilitate the setting of group-wide objectives and allow us to measure our progress.

The four strategic priorities are:

  • Financial: driving sustained long-term shareholder value.
  • Customer: creating a satisfied and profitable customer experience.
  • People & Learning: creating a learning and growth environment.
  • Internal & Operational: developing efficient, safe and secure methods of managing our operations.

DP says the key features of its business model are as follows:

  • High Barriers to Entry: We operate our container terminals through long-term concession arrangements with the owner of each port. These concessions average 40 years but they are effectively perpetual, as historically concessions have always been renewed. This creates very high barriers to entry and allows us to build strong relationships with port authorities, shipping lines and joint venture partners.
  • Rising Returns and Long-term Cash Flow: The length of our concessions allows us to invest to meet growing demand and changing customer needs, and to improve our efficiency and profitability. Our returns on investment increase as our assets mature and we are able to deliver stable and long-term cash flows.
  • Focus on Growth Areas : We focus on origin and destination (O&D) cargo, where the container’s journey starts or ends at one of our terminals, rather than transhipment cargo, where containers are transferred from one ship to another on their way to their destination. O&D cargo delivers higher margins, is less affected by competition than transhipment and creates opportunities to provide ancillary services beyond the terminal gate. Our portfolio is also focused on faster growing emerging markets, which helps us outperform growth in the industry as a whole.
  • World-class Operations: We are market leaders in automated technology, with exceptional standards of operational performance and productivity. We manage our terminals locally, so they can respond to customer needs, and support their operations through the advantages of our global network.
  • World-class People: Our dedicated, experienced and innovative people serve customers in some of the world’s most dynamic economies. We invest in developing our people and providing a workplace that encourages continuous learning and growth.
  • Strong Brand: DP World is recognised for delivering excellent customer service, for our commitment to strong governance and being a good corporate citizen.

So what does the future look like?

DP World Cargospeed will become the first international brand for hyperloop-enabled cargo systems to support the fast, sustainable and efficient delivery of palletised cargo.

DP World’s new international joint venture with SMS Group will change the way containers are handled in ports. “BOXBAY” represents a new and intelligent High Bay Storage (HBS) system 

More visions of the future of logistics

 

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