DP World volumes decrease, portfolio increases

DP World reported Monday that 2020 first-half volumes were down 3.9% from the same period last year and that it had acquired a 60% stake in UNICO Logistics.

DP World Ltd. handled 33.9 million twenty-foot equivalent units (TEUs) across its global portfolio of container terminals in the first half of 2020, with gross container volumes decreasing 5.3% year-over-year on a reported basis and 3.9% on a like-for-like basis.

DP World said like-for-like container totals adjust for volumes at Posorja, Ecuador; ports Lirquen and Central in Chile; Surabaya, Indonesia; Fraser Surrey Docks in Canada; Swiss Terminal in Germany; and Tianjin, China.

At a consolidated level, DP World terminals handled 20 million TEUs during the first half of 2020, up 2.4% on a reported basis and down 5.4% year-over-year on a like-for-like basis. 

The consolidated figure is throughout from all terminals where DP World has control. Like-for-like consolidated container volumes adjust for Posorja and ports Lirquen and Central, as well as the consolidation of operations in Australia and Caucedo, Dominican Republic. 

DP World blamed COVID-19 and the loss of lower-margin cargo for a 6.8% year-over-year first-half decline at Jebel Ali in the United Arab Emirates, where 6.7 million TEUs were handled between Jan. 1 and June 30.

“Like most industries, the maritime and logistics sector is going through an unprecedented and challenging period due to the COVID-19 outbreak. As a result, our portfolio has seen volumes weaken” by 7.9% in the second quarter and 3.9% in the first half, DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem said in a statement Monday. 

But he said DP World’s performance was better than the industry’s average decline of 15% in the second quarter and 10% in the first six months of 2020. 

“This outperformance once again demonstrates that we are in the right locations, and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience,” Bin Sulayem said. 

Headquartered in Dubai, UAE, DP World is the world’s fourth-largest container terminal operator, with 123 business units and 56,500 employees in 54 countries.

DP World also announced Monday it had agreed to acquire a 60% share in UNICO Logistics Co. Ltd.

DP World said the transaction is expected to close in the fourth quarter, subject to regulatory clearances, and “represents another strategic step in DP World’s vision to build an integrated suite of service offerings that will connect directly with end customers and beneficial cargo owners to remove inefficiencies in the supply chain and accelerate trade growth.” 

Headquartered in South Korea, UNICO, an independent non-vessel operating common carrier (NVOCC), has 25 subsidiaries in 20 countries. DP World said UNICO is a multimodal transport specialist and has a strong position in the rail freight market between East and Central Asia and Russia. 

“In addition, UNICO’s expertise in handling automotive logistics is aligned with DP World’s strategic focus on this sector,” the company said. 

Bin Sulayem said the acquisition is part of DP World’s strategy “to become the leading end-to-end supply chain solutions provider. By integrating UNICO into our worldwide network, we will be able to offer better service to our customers in South Korea and beyond. These new services further strengthen our logistics capabilities, which we are combining with our maritime services operations and our worldwide network of ports and terminals.” 

Terms of the transaction were not disclosed. 

In February, DP World announced that it had completed the acquisition of Fraser Surrey Docks in British Columbia, Canada. Its other Canadian operations are the Centerm container terminal in downtown Vancouver, the Fairview container terminal in Prince Rupert, the Port of Nanaimo in British Columbia and the Port of Saint John in New Brunswick. 

In December, DP World said it had been awarded a 30-year concession for the management and development of the Jeddah South Container Terminal at the multipurpose Jeddah Islamic Port, the largest port in Saudi Arabia.

In 2019, DP World bought P&O Ferries, which provides ferry services between the U.K. and continental Europe; Topaz Marine & Energy, an operator of offshore supply vessels for the energy industry; and a 77% stake in Asian ocean shipping feeder and short-sea carrier Feedertech

DP World also announced in February that it would delist and return to full state ownership. Parent company Port and Free Zone World acquired the 19.55% DP World shares traded on the Nasdaq Dubai.

“Returning to private ownership will free DP World from the demands of the public market for short-term returns, which are incompatible with this industry, and enable the company to focus on implementing our mid- to long-term strategy to build the world’s leading logistics provider, backed by our global-spanning network of ports, economic zones, industrial parks, feeders and inland transportation,” Bin Sulayem said at the time. 

DP World said Monday it was proud that its ports have remained operational throughout the coronavirus pandemic and that its investments in digital technology and automation ensured it would have minimal disruptions.

“Overall we are encouraged that our business has performed better than expected and, while the outlook is still uncertain, we remain positive on the medium- to long-term fundamentals of the industry,” DP World said. “Furthermore, our strategy of providing integrated supply chain solutions to beneficial cargo owners leaves us well placed to benefit early from any sustained recovery in the global economy.”

DP World Southampton welcomes its largest vessel ever

DP World finalizes Fraser Surrey Docks acquisition

Container shipping laden with ‘antiquated processes’

Click for more FreightWaves/American Shipper articles by Kim Link-Wills.