Steve Harley & Patrick Corsagni – President & Vice President, DHL Energy – France
The president and vice president of DHL Energy discuss the division’s rapid evolution in the last three years, provide insight into their 2020 strategy and highlight the growing importance of customized supply chain solutions.
What has been the evolution of DHL Energy in the last three years?
From an industry perspective, global tendencies have changed tremendously in the last three years. First of all, the recent advent of the unconventionals market has redefined export dynamics and has sparked important investment decisions. Secondly, we have allocated greater resource investments in gas, especially in Australia, to respond to the rapid growth of the LNG market worldwide, gas is becoming a key product for the future of the industry, without a doubt. Lastly, oil price fluctuations have posed serious challenges to the oil and gas industry. Thanks to the focus on cost in all parts of the supply chain, this has presented new opportunities for logistics companies. As customers seek cost reduction, we offer solutions to optimize supply chain processes from both a cost and productivity viewpoint. Energy provides in excess of a billion dollars of revenue to the DHL group.
What have been some of the major and innovative projects DHL Energy has worked on in recent years?
There have been quite a few! Our operations in Asia service both oil companies and service companies. They have grown both their scope of service and revenues substantially. In the upstream business, we have observed significant developments in China, where we are also carrying out projects related to transportation and HSE management. In Australia, we have become a partner of choice to support the development of coal bed methane (CBM). Again in the upstream sector we have further invested in the Asia Pacific region in Papua New Guinea for example. We have also handled projects and ongoing operations in India, Bangladesh and Vietnam. In the Middle East, we have developed new projects in Saudi Arabia, Dubai and are progressively developing more business in the Omani market. We have undertaken several missions in North America, particularly offshore operations in the Gulf of Mexico but also in Canada and Alaska.
When oil and gas companies turn to logistics companies, they often seek more visibility and transparency on supply chains and product movements. How do you build lasting and trustworthy partnerships with your clients?
The field of logistics has provided increasing levels of transparency, visibility and transportation to the oil and gas industry. Our main focus today is to optimize stocks and solutions. We want to minimize inventory while ensuring flexibility and delivery of parts when it suits our clients. Our objective is to leverage every aspect of the supply chain. Some of our customers are facing inventory problems and we respond to this challenge with tangible individually designed solutions. In today’s market, there is an emphasis on the efficiency of the supply chain. Overall we have drastically improved how we interact with customers.
It is interesting to also note how perceptions are changing in the oil and gas sector. A few years back, logistics were often dealt with only “at the end” of project design, whereas today, the players of the industry assess the critical importance of putting in place an efficient supply chain process at an early stage of their project definition often at the FEED stage.
QHSE has prevailed as a top priority in the oil and gas industry. You have underlined the need for global harmonization across units in terms of compliance, health and safety standards as a key success factor. What have you done in that regard to uphold this objective?
HSSE is a business driver for DHL. Any operator in the oil and gas industry is naturally expecting us to deliver high standards of HSSE. In China, we are actively involved in improving and monitoring customers’ HSSE processes and reporting. Transporters in the Middle East and Africa also seek our expertise to determine the quality of their HSSE in terms of maintenance and inspection. HSSE is a prerequisite to our own operational activity but also a genuine business activity for DHL. Internally we have been able to align our HSSE across all business units worldwide and are reviewing our management processes to create further standardization. Within the company, HSSE is an important part of our culture, which any DHL professional must adopt throughout the course of his career.
You have recently unveiled a USD 85 million investment plan in Asia to build a commercial hub. Is this enough? What else has been done to consolidate your presence in emerging markets?
We have recently unveiled our 2020 strategy, which emphasizes our focus and development in emerging markets. DHL will consistently invest in the Asia-pacific region and emerging markets generally speaking. Most of our business growth in Energy is drawn from these markets and DHL is investing in infrastructure to support our sector role in the development of these promising ventures.
How has hope for East Africa as a promising prospect for DHL Energy materialized?
In East Africa, the energy industry initially faced challenges related to the absence of legislation and frameworks. We had to wait for the proper implementation of certain regulations before triggering significant investments. We are today actively pursuing LNG projects in Mozambique and exploration work across the region. DHL energy will surely capitalize on the global group’s historical and unrivalled footprint in Africa. We have to be patient but also carefully examine the evolution of the market to position ourselves ahead of an ever-growing competitive market. Our capability to support and accompany clients in any location is critical. DHL is engaged in the early stages of projects and offers a scope of services that is currently unmatched. We are for instance the only logistics company operating its own aircraft and air network on the African continent. We provide integrated solutions comprising air freight, sea freight, roadfreight, customs brokerage warehousing and express. Again our approach does not simply revolve around transportation but rather in promoting and implementing innovative solutions.
In light of the growing costs of exploration, DHL takes pride in delivering solutions to reduce costs and increasing efficiencies and productivity for its customers. What do these solutions consist of?
In France, we have a project expertise center, which designs, implements and controls various solutions that we offer to our clients. In the downstream business, we monitor various process flows between clients and suppliers from the start of a project until the final delivery. We therefore provide the client with full visibility, and an ability to track his own shipments and equipment at all times. In the upstream business we provide LLP solutions, where we are able to control and design transportation solutions using both our own and third party transporters who are picked carefully. Most upply chain processes operate on an integrated door-to-door basis. DHL also specializes in MRO (maintenance, repairs and operations) and produces bespoke services for plants and operating facilities.
Although you operate in the upstream, downstream, utilities, mining, power and renewable energy, DHL is devoted to providing customized solutions for each sector. In light of the current context, what is the role of cross-division collaboration and integrated supply chain management solutions?
Our CSI entity works across all the divisions of the company. We are devoted to our key customers and exploit every resource at our disposal to deliver the most relevant, convenient and advanced solutions. For a client of Total‘s magnitude, we are capable of coordinating solutions between our express, project, warehouse and distribution units for instance. Sometimes we bring one business unit to a customer and at other times we combine three or four. In Saudi Arabia,for example, we are providing an important client with a joint proposal articulated by both DHL Global Forwarding and DHL supply chain to provide an optimal solution..
Finally, what are your key priorities for the future?
As I said, we are dedicating considerable efforts and investments towards emerging markets and that’s a big priority for the years to come. In this regard we need to further promote our capabilities to our customers. Organically, our objective is to further develop our specialized business segments, such as rig move and rig move management. Also, to be noted is our marine and people focus, in which we move not only freight but people to and from supply bases.
In the downstream area, we wish to strengthen our MRO capabilities. Also, our European road freight division is growing at a robust pace and we are expecting to undertake more projects in the energy industry in the future. Finally, we are strengthening our position in the transportation of urgent and hazardous material through our unique SameDay service offering.
Overall, DHL strives to meet its clients’ demands, needs and expectations, and to make our clients successful in their business. DHL is hosting an energy conference in October 2015 in Houston, where we will showcase our specialized business units and expertise in the energy field. It is an industry platform event for discussion around the relevant trends in the logistics industry and how to react to the latest challenges.We invite the players in the industry to come and discuss their challenges but also to see exactly what DHL is about, and how we are your right partner of choice for supply chain solutions!