Freight giant’s volumes drop by 22% at the height of pandemic
62 EMPLOYEES LEAVE THE BUSINESS AFTER SIGNIFICANT RESTRUCTURE
FREIGHT terminal operator DFDS Seaways saw volumes drop by 22 per cent at the height of the Covid-19 lockdown.
The figure was revealed as the business published its annual report, which follows a major restructuring at the Iminghamheadquartered giant.
It recently saw 62 employees leave the business, and while volumes are now increasing, there remains a cautious approach to future trade. Andrew Byrne, managing director, said: “We have definitely seen an increase in volume throughout September. All routes served are busier now than they were, but we don’t know how sustainable that is. It is possibly Covid catch-up, and also possibly people starting to stock up ahead of the EU transition.
“We are certainly seeing warehouses fill up as well as more cargo going through the quay.
“It is going to be a difficult year to marker. It has been a particularly difficult year, we have made some big changes and taken a lot of cost out of the business. Hopefully we will see the volumes hold up over the next year.”
A total of 86 posts had been placed in consultation back in June, as part of a loss of 650 roles across the entire European network.
In making the move, it said a £200 million hit to the bottom line was anticipated.
In his report, Mr Byrne said: “Covid 19 has had a significant negative impact to the business as volumes in quarter two 2020, at the height of the pandemic, were 22 per cent lower than the same period in the previous year.
“The directors took steps to minimise the impact of Covid-19 wherever possible during the period by utilising the UK Government furlough scheme to reduce salary costs
and taking steps to minimise other costs across the business.”
Stating additional costs had been incurred for protective clothing and cleaning products to keep staff safe,
Mr Byrne said: “In quarter three 2020 volumes are heading in a positive direction. A restructure throughout the business, lowering the fixed costs and creating a more agile commercial structure, will further improve the result.”
For the calendar-aligned financial year 2019, turnover was up one per cent from £63.1 million to £63.5 million at Nordic House, with marginal price increases offsetting slight falls in volume. It swung back into operating profit of £133,347 from a £1 million loss in 2018 due primarily to plant impairments. Stevedoring operations fell 3 per cent to 962,339 trailer equivalent units, steel and paper held out and timber was 4 per cent down. Refuse-derived fuel handling saw a 24 per cent decrease, with a larger emphasis on domestic use. DFDS has been heavily involved in Brexit planning, as a key connection to Europe for freight, having been contracted to provide additional services as part of the initial preparation.
Mr Byrne said directors remain mindful of uncertainty surrounding Covid-19 and Brexit, with the recovery of the economy directly linked to volumes.
“The transition period for the UK leaving the EU comes to an end in January 2021 and uncertainty remains,” he said.
“The company is in a strong position for the many different scenarios which could unfold, recruiting new positions and implementing processes and systems for customs clearance for DFDS traffic and for our customers. We have been maintaining close dialogue with customers so that they are prepared for a possible new set of trading rules and processes.”
DFDS has increased its footprint to provide additional capacity for lorries should additional checks be required, while playing a key role in work to avoid bottlenecks at Port of Immingham through wider planning with different agencies.
It was revealed yesterday that DFDS’ Immingham operations will not be part of the £77.6 million Department for Transport contract to provide additional ferry capacity post transition period this time round, as it did in March 2019.