News / DSV rough patch continues, with questions asked over Russian trade

© Timon Schneider |

Under threat of being gazumped by private equity specialist CVC in its bid to acquire DB Schenker – and heavily criticised over its decision to create a JV in Saudi Arabia, given the country’s  human rights record – DSV’s rough patch continues.

Now, one of its institutional investors is demanding answers after reports that the Danish group transported goods through, and to, Russia – despite its pledge not to do so.

Anders Schelde, CIO at Akademikerpension, told The Loadstar: “One might have had business activities that ended up on the wrong side of the Russian border, but as a freight forwarder you are in control of whether or not you choose to enter Russia.

“DSV has clearly statedbit would not, which makes it understandably problematic that it now appears to have done so anyway. As investors, we obviously expect them to get this under control, and we look forward to receiving an explanation.”

He continued: “I’m not a lawyer, but it’s likely that this isn’t a violation of sanctions. However, it’s clearly against the spirit of the sanctions, which are generally intended to avoid supporting the Russian war economy.

“Specifically, there is a sanction with restrictions on Russian railway access to financial services in the west, so in light of that, a responsible company should not be supporting the railways’ revenue either.”

Approached by The Loadstar on its activities in Russia, DSV said: “DSV has a clear policy that we do not transport to, from, or via Russia – apart from shipments involving medicine, pharma, or humanitarian aid. (However) after looking into our shipments, we have unfortunately found that in a few cases, orders have been placed for the transport of cars from China to Russia, and that a subcontractor has transported clothing from Asia to Europe through Russia, in direct violation of DSV’s internal rules and guidelines.

“This is completely unacceptable, and we are investigating the matter with a view to taking the necessary action against personnel.

“At the same time, we are tightening our internal procedures further to ensure that it does not happen again. Although there have been breaches of DSV’s internal rules, our investigations show that all international sanctions against Russia have been complied with.”

In April, DSV complained that compatriot Scan Global Logistics was using Russia’s freight network. DSV CEO Jens Lund had said DSV had taken a “principled stand” – which has no doubt added to the embarrassment of finding that it too had been operating in Russia.

Meanwhile, German newspaper Der Spiegel has reported that labour union Ver.di was campaigning heavily in favour of giving CVC the go-ahead in its bid for DB Schenker.

In an internal document, it calculates that 5,300 jobs could be lost in the event of a takeover by DSV.

“The threat of job losses in the event of a takeover of DSV is immense,” the document reads, a copy of which was also sent to Deutsche Bahn’s supervisory board.

“As CVC does not operate a logistics business, no such imminent job losses are to be expected here,” the document added.

CVC does own Scan Global Logistics, however.

To support its case, Ver.di pointed to the acquisition of the Swiss logistics company Panalpina by DSV in 2019, which led to a considerable number of job cuts.

Der Spiegel also reported that, according industry sources, a number of DB Schenker’s major customers, which include Apple and French luxury brand group Kering, are said to have signalled they will not renew their contracts in the event of a sale, fearing a deterioration in service.

But the newspaper quoted DB Schenker as dispelling such concerns. The firm told it: “Our customers value the outstanding service excellence of DB Schenker, which is completely independent of a possible new owner in the future.”