DP World reports slight decline in container volumes, unveils Unico Logistics acquisition

Dubai-based port and terminal operator DP World recorded a slight decrease in container throughput in the first half of 2020, despite negative COVID-19 effects.

DP World handled 33.9 million TEU across its global portfolio of container terminals in H1 2020, with gross container volumes decreasing by 5.3 per cent year-on-year on a reported basis and down 3.9 per cent on a like-for-like basis.

At a consolidated level, the company’s terminals handled 20 million TEU during the first half of 2020, increasing 2.4 per cent on a reported basis and down 5.4 per cent year-on-year on a like-for-like basis.

Reported consolidated volume in the Americas and Australia region was boosted by the consolidation of Australia, Caucedo, Dominican Republic, acquisition of container terminals in Chile and commencement of operations in Posorja, Ecuador, according to DP World.

Jebel Ali, the UAE, handled 6.7 million TEU in 1H2020, down 6.8 per cent year-on-year, due to COVID-19 and loss of lower-margin cargo.

“Like most industries, the maritime and logistics sector is going through an unprecedented and challenging period due to the COVID-19 outbreak,” Ahmed Bin Sulayem, Group Chairman and Chief Executive Officer, commented.

“As a result, our portfolio has seen volumes weaken by -7.9% in 2Q2020 and -3.9% in 1H2020. However, this compares favourably against an estimated industry decline of -15% in 2Q2020 and -10% in 1H2020. 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.“

He added that DP World’s ports across the world remained operational. The company’s investment in digital technology and automation is believed to have ensured minimal disruptions.

“Looking ahead, our near-term focus is on the safety of our employees, providing solutions to cargo owners that are facing supply chain issues due to the pandemic, integrating our recent acquisitions to drive synergies, containing costs to protect profitability and managing growth capex to preserve cashflow,” Bin Sulayem continued.

“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.”

On 27 July, DP World revealed it has agreed to acquire a 60 per cent shareholding in Unico Logistics, a South Korea-based multimodal transport specialist.

The transaction, subject to regulatory clearances, is expected to close in Q4 2020. It is said to represent “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”.

Established in 2002, Unico has a global footprint of 25 subsidiaries in 20 countries and is one of the largest independent non-vessel operating common carriers (NVOCC) in South Korea. 

As explained, the acquisition is in line with DP World’s global strategy to grow as a smart supply chain solutions provider and will provide a platform to drive synergies between UNICO and DP World operations in the Asia Pacific and European regions, while also continuing the expansion of logistics capabilities within DP World’s portfolio. In addition, UNICO’s expertise in handling automotive logistics is aligned with DP World’s strategic focus on this sector.

 “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,” Bin Sulayem noted.