DSV CEO: Long road ahead for US growth business
DSV is lying in wait for a significant, potential acquisition in the US in a North American market which these years is supplying a large part of the earnings at the Danish logistics group, and it looks as though it was a well defined, strategical decision for DSV's top executive for the entire global Air & Sea division since April 1st, Carsten Trolle, to be located permanently near the company's US head quarters in New Jersey. But the location has several explanations.
49 year old Carsten Trolle has spent the last 24 years in the US, where he in 2005 became a part of DSV's management in the US and North America, initially as Vice President and since the fall of 2009 as President, until he this year took over as CEO for the entire global Air & Sea division, which is the largest company in DSV.
Solo run in the US
Carsten Trolle has thus been a pivotal figure in the establishment of DSV's US-based organization, which in the past fiscal year delivered the most significant gains for Air & Sea - or as DSV CEO Jens Bjørn Andersen explained regarding the company's first quarter interim report for 2015: The division performed a solo run.
Air & Sea drove growth at DSV in 2014
"Our North American activities have performed better than we have ever seen before. They performed an absolute solo run. Of course the dollar helped, but even without that effect we have grown by over 11 percent. This is excellent, we have taken market shares and grown more than the market," said Jens Bjørn Andersen.
Carsten Trolle himself explains the boom in the US by pointing to the strong organization and management, where many have taken part in establishing the American part of DSV's global organization, and for years have collaborated with a continuous influx of younger employees, who receive responsibility and the opportunity to open new offices in the US, for example.
The emergence
"We have a management that has worked together for over 20 years, and we were all very young when we came to the US, where we helped build a company up. There is a very solid understanding of the fact that this is our own business, and it is definitely a big strength to be part of a management team where we are very familiar with each other," Carsten Trolle tells ShippingWatch.
Compared to DSV's typical competitors, the Danish logistics group is still a limited player in the US and will presumably continue to be so for some time ahead without one or several big acquisitions, although DSV presently has 26 offices in the US, with current plans for an additional two, and will maintain its strategy in the US of emerging with new locations, in the shape of new offices and regional representation, while other logistics companies are combining offices.
"That doesn't work for us. We start to set up the production of a new office as soon as the other office is making money. The most recent example is our office in Salt Lake City, where we broke even with our investment six months after beginning and where we are now making good money and have new, bigger customers in the system, " says Carsten Trolle, who must admit that DSV in the US is still a relatively unknown name in the logistics industry, even though the Danish transport group ranks as the fifth largest forwarder globally:
"We have a long, long way to go. We have huge possibilities in the US, but this must of course be controlled. We have to move forward slowly and steadily and have a plan for how to execute. We have seen some of our competitors hire loads of people with no great gains. We're not establishing offices in the US right now just to set up an office, and there is a limit to how many we need. Should we have 100? No, we should not. Should we have about 30? Yes, we probably should."
Long road ahead
Just six months ago, rumors emerged that DSV was investigating the opportunities for a potential acquisition of US-listed logistics company UTi Worldwide, which in December 2014 had a market value of USD 1.5 billion and with the biggest business in the US. DSV has previously stated that an acquisition of that size does not scare the Danish company.
Is there a long way to go for DSV before you become a big and known forwarder in the US?
"Yes, there is a very long road ahead before DSV will be a known name in the US, if you look at some of our competitors for example. But we don't view this negatively, because we have a lot of possibilities. But we need to work harder in regards to the big customers, while the knowledge of DSV is the US still isn't common yet, but this can work against us as well as work for us."
"In the US, we have grown a lot with small and medium sized customers, which we have based our business on, and which we also want to grow with going forward. We have improved - improved a lot - when it comes to bigger customers, but we still have a ways to go."
In 2014, the US was behind about a third of the combined income in the Air & Sea division and the US is currently the country that makes the most money for DSV with some of the highest profit margins in the market at the American company.
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