DFDS has taken steps to improve operating efficiency in light of current market conditions, including a 10% reduction in its workforce.
“Our initial response to Covid-19 has been successful,” said Torben Carlsen, DFDS CEO (pictured). “We now take further steps to restore long term growth and efficiency. At the same time, we continue to monitor new opportunities that may arise.”
Among the steps to be taken will be the combining of its sales of large freight customer solutions, involving both ferry and logistics operations, into the logistic division to drive sales across the organisation. Overlapping functions will be streamlined as part of this consolidation.
DFDS’s ferry division will now focus on delivering services to freight forwarders and hauliers while the freight and logistics operations will be adapted to new market conditions, including optimising port terminal and haulage operations.
In addition, other initiatives are underway to simplify and focus business support functions, including reshaping and integrating the IT and digital organisation, as well as the downsizing of various functions.
The company’s passenger operations have also been aligned to changes in the travel market. A higher share of passengers are travelling for transport purposes, including holiday travel. These changes include simplifying the on board concepts and offerings on the ferries.
As a result of the planned actions, DFDS said that around 650 of its 8,600 employees will be leaving in the coming months, including 200 in Denmark.
It will record a one-off expense of about $15 mill this year but expected to realise a positive financial impact of between $7 and $11 mill and an annualised cost savings of around $38 mill.
Responding to the outbreak of COVID-19, in mid-March, DFDS reduced costs by laying up 12 freight ferries and suspending two passenger routes. The company reported that freight volumes im most areas during the second quarter were above expectations and as a result, five of the ferries have been reactivated.
In addition, several ropax routes are due to start operations this month, including the North Shields (Newcastle) and Ijmuiden (Amsterdam), following the re-start of its Oslo/Frederikshavn/Copenhagen route on 25th June, after Denmark and Norway re-opened their borders. DFDS’ English Channel route is also due to re-open.