DSV's statement on the shipping company's entry into the logistics field: the impact is no

DSV CEO Jens byj ørn Andersen used the term "inconsequential" to describe the impact of the global container shipping company's large-scale acquisitions and a foothold in the logistics sector on the Danish logistics company, according to the latest information from One Shipping.

However, CMA CGM partnered with logistics company Ceva under DSV's nose in 2019, with a series of consequences, just as Maersk secured most of DSV's exclusive deals with wind turbine maker Vestas last October Same. The deal is reportedly worth billions of crowns.

However, DSV CEO Andersen doesn't think it makes any fundamental sense for the market or DSV, especially as Maersk has announced and acted on its expansion in logistics. Maersk's $3.6 billion acquisition of LF Logistics just before Christmas illustrates the fact that the carrier's growth in logistics won't just come by buying smaller units that are easy to integrate, so-called add-ons.

The Maersk acquisition comes in the same week as Maersk rival MSC's $6.4 billion purchase of logistics company Bolloré's African operations, also deviating from the carrier's previous organic growth strategy.

"The market is huge, so it's enough for everyone. Even though we've made acquisitions in recent years, our market share is still less than 5 percent," Andersen told the media.

In fact, he was reluctant to comment on the market situation wher two major industrial companies are competing for some of the same customers, and both are very keen to acquire other companies in the logistics space.

In addition to Maersk, which remains a large supplier of DSV, the established shipping company has also started running its own logistics business part-time. Andersen also wants to continue to call Maersk a supplier.

But isn't Maersk creating a company that owns both ships and logistics, while DSV only has logistics left? Now, is the era of the rise of container shipping companies.

"We have good relationships with many different carriers, but we are also very confident in our business model. DSV has a lot of services and offers customers a variety of shipping methods, so I believe we can still do it so we will Keep going," Andersen said, stressing that DSV has no plans to enter the operator, the realm of ship operations.

"We're very comfortable with our asset-light model," he added, referring to the company's strategy of not owning operating assets.


No specific figures have been released for the Vestas deal, but Maersk said it was a very large deal and the group will hire 200 people globally to handle the deal.

Andersen declined to comment on the importance of DSV no longer dealing with the agreement. DSV has been working on the agreement for the past two years. He referred to what DSV had said before: “There are winners and losers in deals, and the Vestas deal size is not big for DSV.”

There is no doubt that DSV will also feel the impact of container routes entering the logistics space, and that is the asset price, that is, how much DSV has to pay for its next acquisition. This is likely to happen in 2022, as Andersen said last week, recognizing that prices may have surged due to the overwhelming interest.

But he added that as the cargo market has picked up over the past year and a half, buyers — referring to the likes of container liner companies and DSV — have also received a lot of money. Take DSV, which raised its 2021 guidance several times last year, most recently in October, when it said it expected its operating performance to be close to DKK 16 billion ($2.43 billion).

Maersk paid more than double the valuation of LF Logistics in 2019, according to major Norwegian bank DNB. Maersk itself admits the price is on the high side.