DSV Strengthens Network with UTi Acquisition
DSV has shown over the years a strong track record of success that has continued to strengthen their global network and positioning. Strategic acquisitions have allowed the company to expand into many market segments, and their most recent acquisition of UTi has made DSV a top 5 freight forwarder in the world. The combination of DSV and UTi is set to be a recipe for success, as UTi adds a large diversified mix of business to help DSV become a key player in the international transport and logistics industry.
Mergers of this size take effort to work effectively on both sides of the equation. At a recent visit to the DSV office in Bangkok, we learned that the integration of the two companies had been completed as we talked with two of the MD’s at DSV Thailand, Ms. Kanyarad Julhiran, Managing Director at DSV Air and Sea Thailand, and Mr. Edward Haapala, Managing Director, DSV Solutions Thailand / APAC Director Quality Management. These two MD’s are working together to make DSV is the top freight forwarder and solutions supplier in the region.
Pursuing Mutual Benefits
DSV now has more than 40,000 employees worldwide and operates in more than 80 countries, allowing them to reach most destinations. Capitalizing on business synergies is allowing DSV to increase their global scale with its contract logistics division, solutions, and expanding most of their other core competencies throughout every region. UTi also brings with them added skills in various verticals, including automotive, healthcare, energy and retail.
At a more local level, the Thailand branch we were fortunate to visit was humming along and working together under the single DSV banner. Ms. Julhiran helped to explain the structure at the Thailand location further. “After the integration with UTi, the overall structure of DSV was changed to implement what UTi brought to the table. In Europe and the USA, DSV’s business units are set up under DSV Air and Sea, DSV Road, and DSV Solutions. In Asia-Pacific we have yet to establish a DSV Road business unit, but we do have a strong presence with the other two business units. The freight forwarding business unit is operated under DSV Air and Sea. For contract logistics, we created a new arm of the company under DSV Solutions. We’re now one of the biggest suppliers in Asia for contract logistics and solutions.”
The MD of the DSV Solutions Thailand division, Mr. Haapala explained further, “There’s a pretty clear definition between our two business units. We’ve got end-to-end solutions where we work amongst both organizations, as well as some that are within our specific business unit. For example, while there’s a surface transportation element to the Air and Sea business, some of our contracts have a last mile transportation deliveries that the Solutions unit handles, as it makes more sense to not hand that over as part of the warehousing element. We work together to find the best possible winning solution for our customers.”
Ms. Julhiran said, “I think for both of our business units, UTi is bringing many good things, like their systems and processes they used to support their customers. DSV doesn’t want to abandon those good elements and tries to continue those best practices and integrate them into our system; all the while this gives the customer satisfaction and it helps them to feel like they can get the same or even better service. In the end, it’s all about serving customers as best as we can and utilizing the best elements from each of our business units to ensure that happens.”
I think for both of our business units, UTi is bringing many good things, like their systems and processes they used to support their customers. DSV doesn’t want to abandon those good elements and tries to continue those best practices and integrate them into our system.
Ms. Kanyarad Julhiran
Integrating what UTi brings to the table has been a key to unlocking the full potential of the acquisition. Coming from UTi, Mr. Haapala is looking to leverage the development of business he’s created there and to transfer these skills to DSV Thailand’s Solutions division.
“When a customer first contacts us, we need to determine their needs quickly. This ability to make quick decisions is one aspect of the DSV culture I find critical to success. We put the facts on the table, work it out to see how it should be done, and we execute; simple as that. This business is dynamic, so we must be able to make and act on our decisions quickly. As far as what the customer is looking for, from my experience there’s a difference when comparing the needs of global clients to regional and local ones. Globally, there’s more of an end-to-end offering where we’re doing the brokerage, warehousing, and value added services. The local Thai based entities are normally looking more for warehousing and distribution services, but it can vary.”
Ms. Julhiran echoed this by saying, “I feel the power DSV gives us to make decisions locally. It helps empower the entire operation, and is a smart decision that comes from the top. They understand that the people on the ground at the local level are often close to the customer and know their business the best. Our two business units have been running concurrently very smoothly and support each other. When some people see two companies and two MD’s they may think there’s internal competition, but for us we don’t look at it like that. We’re not in competition with each other. If there’s a sacrifice for one division to help the other division succeed we’ll always make that sacrifice, because as a company we’re still benefiting.”
Mr. Haapala continued, “At DSV, each business unit can and does have separate clients, but we’re always looking for ways to expand our offering to customers by cross servicing their needs. For example, someone that was a sea freight customer now has warehousing needs but didn’t’ know DSV could handle that, and now we can offer that as an additional service. It’s all about getting close to the customer and understanding their business. The more of the supply chain you can control the better the service you can provide. One point of contact across divisions makes the whole chain run smoother.”
Both Managing Directors spoke highly of the merger seeing it as being a big win for customers. “If anything, customers should feel like they are gaining quite a bit from the merger with UTi,” said Mr. Haapala. “Much of this has to do with the direct face-to-face engagement with customers we have. Engaging with customers you see the excitement from them as well. We always want to leverage best practices from one vertical into another. We’re now able to bring things to customers they may have not thought about before and we can offer it to them now with our larger footprint.”
If anything, customers should feel like they are gaining quite a bit from the merger with UTi. Much of this has to do with the direct face-to-face engagement with customers we have. Engaging with customers you see the excitement from them as well.
Mr. Edward Haapala
“I’ve been in this business for over 30 years and manage a big staff,” said Ms. Julhiran “I know how important it is for us to interact with customers directly. Our trained and dedicated staff is our most precious resource we have. Freight forwarders are really doing the same job and offering the same type of product; what ultimately defines our company and makes people remember DSV is the quality of our staff and the interactions with customers directly.”
The numbers are so far backing up DSV’s decision to acquire UTi as well. They are performing better than original projections first anticipated and everyone we talked to seemed overjoyed with the results. With their first half of the year results showing growth, and DSV continuing to grow stronger and stronger even during a down market, acquiring UTi was a great decision and everyone is looking to benefit.