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The market maybe speculating as to Damco’s future, but its chief executive, one year into the role, is pretty clear: it has a defined role to play in the logistics market.
Saskia Groen-In’t-Woud has been in the APMM group since 2015, when she was made head of Asian operations for Maersk. She knows the group well and sees a future for Damco within it.
“If I had a dollar for every bit of speculation, I would make quite a bit of money. It’s flattering that people talk about us so much. But I’ve been tasked with heading this business, and we are clear where we are going.
“We are colleagues in APMM, but Damco is independent; we have our own space, and good relations with our carriers.
“We have an arms’ length relationship with Maersk and carrier agreements with other lines. There are a number of different options for customers: Twill is great for a platform experience, Damco is great for forwarding and air freight; Maersk has key clients with complex needs.”
Ms Groen-In’t-Woud inherited Damco in the midst of Maersk’s restructuring, as it contrived to move into the forwarder field, leaving question marks over Damco’s role.
“It’s been one of the most formative years of my career,” she said. “A unique experience, with seismic change and a new focus, while the broader company has been launching a new strategy.
“But it was pretty clear what we needed to do to get our house in order. And we have been building a team that understands where we are going.”
According to some sources, Damco’s future within APMM has hinged on its results.
“Our first quarter of 2019 was – well, it needed improvement, but then we steadily recovered all year.
“Last year was challenging for the industry and it demanded we go back to basics. We had an early focus on cost containment, and we’re now on track with where we want to be. It was a mixed year, but I was happy with it.”
A “back to basics” strategy has involved finding a clear focus, and that has been on customers. Ms Groen-In’t-Woud’s experience has shaped the way she runs the business.
“I worked in the cement industry, a really commoditised sector where you have to do a lot of value creation, and if you understand your customers, you can achieve a lot. I was brought into Maersk to have a different perspective on the customer side.
“Freight can be quite simple; it’s a matter of perception. We worked out who customers are and realised we had some solid, long-term relationships. We got in touch with them early and we also got in touch with our suppliers – you are only as good as your customer base and your suppliers.
“Difficult conversations became constructive. We had some good markets, such as air freight out of China and LCL. We looked at what we are good at, our customer base, and stuck to that. And we had a willingness to roll up our sleeves.
“And we have got to know our customers, and got close to them, and developed products with them. We must honour our commitment to customers, for us it’s all about that.”
As a testament to this customer focus, Damco has seen its Gallup score for customer engagement rise from 3.47 to 4.09, placing it in the 52 percentile on the Gallup database, with a 94% response rate.
“It was a year of exceptional change and exceptional improvement in engagement,” she noted proudly.
Damco’s IT system is also set up with customers in mind, and will be further developed this year.
“We had to get our IT system up to date. We inherited BluJay as a provider and decided to stay with it. We are just in the process of going cloud-based, and we will have new product launches, while our control tower solution is launching in April, it’s very exciting.
“Our new product launches are very interesting and we are co-creating with our customers. They have real functionality and efficiency. Sales, operations and customers are equally excited, it’s a holistic point of view. It will help us achieve managed growth.”
But there is no growth without a solid base, she added.
“I’m all about discipline. We’ve got to get the base right. We are now at a point where our operational performance is at a good level of efficiency. And this year we are starting to leverage our digital capability.
“Building a digital system is about providing your people with information so they can help customers. Being able to use that information is critical. Our app allows the customer service team to monitor inventory across the supply chain, enabling real-time reactions and shows employees when to connect, and allows us to be highly responsive to customers.
“Last year, we built a business resilience programme that identifies, assesses, categorises and records every risk, to ensure that the customers’ product continues its journey along the entire supply chain. It had been undervalued, but throughout last year we were able to draw on a lot to improve it. And we’ve worked with BluJay for additional functionality and have a much more service-focused offering, on price, speed and so on. We’ve got a lot closer to our customers.”
Plans for this year certainly put any negative speculation as to Damco’s short-term future in doubt: it is investing. And the management team has been strengthened with the addition of Gefco’s managing director Netherlands, Naomi Landman, who has become head of EMEA and network strategy.
“We are looking to expand,” said Ms Groen-In’t-Woud. “We have a new UK warehouse for air freight at Heathrow launching in March, built around our customers’ needs. It’s ‘Brexit-rated’ – there is a bonded area so we can receive European cargo. It will also be AEO-certified. It was a big investment proposal.
“We are working to set up a global footprint, but we’ve got to build a solid foundation, so there is more to do and we are raising the bar. You need to be able to bite off small pieces that you can handle.
“A lot will depend on the US elections and China, but the geopolitical challenges are hard to predict. We’ve got to have a robust strategy.
“I am really looking forward to 2020; there feels like a new energy, it’s a year when people are optimistic and happy,” she concluded.