DP World to expand its global freight forwarding network to 180 offices this year

Dubai-based logistics company's push for expansion comes amid rising disruption to international trade

FILE PHOTO: Terminal tractors line up to offload their containers into a cargo ship at DP World's fully automated Terminal 2 at Jebel Ali Port in Dubai, United Arab Emirates, December 27, 2018. REUTERS/ Hamad I Mohammed/File Photo
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Global ports operator DP World plans to expand its freight-forwarding network to 180 offices globally by the end of this year, as it seeks to grow its supply chain services amid increasing disruption to global trade.

The Dubai-based operator has opened 100 freight-forwarding offices over the past eight months, in the GCC and globally, and is planning an additional 80 offices by the end of 2024, a company spokesman told The National.

The move aims to provide customers with efficient access to cost-effective and reliable supply chains while helping them navigate the complexities of global trade.

A global freight-forwarding network provides our customers with local access to international trade and is a key part of our strategy to connect goods from factory floor to customer door … Our new offer covers 90 per cent of global trade so we can move anything, anywhere,” the DP World spokesman said.

The offices – the latest one was set up in Miami – “will be opened to meet customer demand and we continue to add branches across all regions around the world”, he said.

The move comes amid disruption to the world’s major trade routes and growing uncertainty stemming from two wars and presidential elections this year in about 40 countries, including the US.

Yemen's Houthi rebels have launched continuing attacks on commercial ships in the Red Sea, in support of the Palestinians in the Israel-Gaza war. This has forced shipping companies to avoid the Suez Canal, taking the longer and pricier route around the southern tip of Africa.

Global trade will probably fall short of its growth forecast of 3.3 per cent for 2024 amid slower economic growth and downside risks such as the Red Sea attacks, the World Trade Organisation’s director general Ngozi Okonjo-Iweala said last month.

Trade disruption is forcing businesses to rethink their supply chain strategies. Some company executives have responded to geopolitical shocks by prioritising “friendshoring”, or moving vital manufacturing within the borders of ally countries.

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DP World's spokesman said plans to expand the freight-forwarding services were “unrelated” to the Red Sea shipping attacks and are instead part of a “long-term strategy”.

“Customers will benefit from a single-source solution to getting their products from the point of creation in to the hands of their customers,” he said.

The company cited broadly increasing disruptions to global trade – from climate change, geopolitics and macroeconomic challenges in a statement on Tuesday.

The 100 freight forwarding offices already set up employ 1,000 staff, adding to DP World’s 108,000-strong workforce, and the 80 planned offices are expected to add another 800 employees.

By expanding its freight forwarding services, with a focus on air and ocean freight, DP World will use its “toolbox” of ports, terminals, warehouses, lorries, rail and shipping services to increase supply chain resilience, the company said.

The freight-forwarding service spans order and origin management, port handling and freight management for ocean and air, and at-destination services such as customs, logistics, last-mile delivery and warehousing services.

Customers can track and manage their cargo in real-time through a single digital window that is backed by an integrated global services centre that centralises back-end processes.

“Our expansion in freight forwarding complements our end-to-end supply chain solutions and capabilities. Our asset-appropriate approach is a step-change for the freight forwarding industry that puts customers in the driving seat with more visibility and control,” Beat Simon, group chief commercial officer of logistics at DP World, said.

Uncertain trade outlook

On Thursday, DP World flagged an uncertain outlook for global trade due to challenging geopolitical and macroeconomic headwinds, including the ongoing Red Sea shipping crisis.

A "deteriorating" geopolitical environment and tough macroeconomic conditions are posing "significant challenges", Sultan bin Sulayem, DP World's group chairman and chief executive, said as the company issued its full-year financial results for 2023.

DP World's profit attributable to the owners of the company, before separately disclosed items, dropped more than 28 per cent year-on-year to $1.03 billion last year, amid challenging market conditions and high interest rates, the company said.

Revenue jumped 6.6 per cent on a reported basis to $18.2 billion on the back of growth at Drydocks World and benefit from the full-year consolidation of South Africa's Imperial Logistics, it said.

"Overall, we delivered a steady performance in 2023, and despite the uncertain start to 2024 with the ongoing Red Sea crisis, our portfolio has continued to demonstrate resilience," Mr bin Sulayem said.

"The outlook remains uncertain due to the challenging geopolitical and economic environment. Nevertheless, we anticipate our portfolio will sustain robust performance, and we maintain a positive outlook on the medium to long-term fundamentals of the industry."

Updated: March 14, 2024, 7:58 AM