If the past couple of years have been challenging for third party logistics providers generally, then that must be doubly true for Norbert Dentressangle, which completed a major takeover only a few months before the arrival of a severe recession.Dentressangle completed the acquisition of Christian Salvesen in December 2007, going on to set out its approach to the integration of the business in its three-year development plan, “Passion Rouge 2010”.
However, by mid-2008, it was clear that Europe was moving into recession. Malcolm Wilson, who heads the UK logistics business, points out that the concept of partnership with the customer is at the core of the way the company operates: “With the onset of the recession, in August 2008 we reappraised what is a good partner.”
It would be easy to respond to a downturn simply by cutting prices. But, says Wilson, “the market is not just about price – it’s also about innovation. “Norbert Dentressangle looks to understand the customer’s business and help solve their problems. One element of this was to bring innovation to the reduction of the customer’s cost base.”
That is a reflection of the entrepreneurial spirit within the business – aiming to be agile and provide a quick response, he says. “We have got a management team that is mindful of customer needs.”
While bringing together two businesses in such circumstances is a big challenge, Wilson says they were aided by a very willing mindset and culture match in the two businesses. “We quickly established the UK management team – there was a lot of willingness. The Dentressangle and Salvesen cultures were not so dissimilar.”
The group’s logistics business now has some 14,300 employees and some 197 logistics centres in 11 European countries – 5.4 million sq m of warehouse space. And since the takeover there has been significant investment into the business, including renewal of vehicles and equipment and higher spec facilities. Dentressangle has brought in new training and new systems including the Learning and Development Centre, which opened in September coinciding with driver CPC legislation.
There has also been a healthy pipeline of new business. Dentressangle’s recently announced contract with Speedibake highlights its approach. In the past, Speedibake, part of Associated British Foods, had outsourced its storage and distribution to two third party providers.
Through its temperature-controlled shared user network, Dentressangle was able to provide an integrated service distributing frozen products direct from Speedibake’s two production facilities into major retailers’ distribution networks.
Other recent contracts include a frozen storage and distribution service for ready meal manufacturer Headland Foods, and Lantmännen Unibake UK, which specialises in fast food bread. Dentressangle also recently signed a further three-year UK warehousing and distribution contract with Daikin UK.
Logistics has shown a high level of resilience for Dentressangle during the recession as its third quarter results show. Logistics, at 919m euros for the period, was ten per cent down on last year – out-performing the rest of the business. Total group sales were down 14.6 per cent for the first three quarters.
Wilson says business growth in traditional markets has been strong – there has been sizeable growth in the multi-temperature business. “Customers are very open to working with a truly European organisation,” he says pointing out that some competitors are not as “joined up” as Dentressangle.
The recession has also brought a new perspective to the old arguments over dedicated versus shared distribution systems. Wilson says customers are most concerned about differentiation on the shelf. “They are more relaxed at the idea of their goods being delivered alongside a competitor’s,” he says.
Retail has been a strong area for the group, while specialist services is another area of growth for Dentressangle – particularly recycling. “There is a lot of interest in that and we expect more to come.”
Wilson points out that to protect margins you have got to ensure that returned goods don’t end up in landfill.
“If at all possible, you have got to convert returns back into ‘new-value stock’. We look across a number of industries. For the high street/out of town, we originated systems to show net percentage value of returns to customers. This allows us to manage how we dispose of that stock.”
In addition, there have to be processes in place that maximise the value of the inventory for goods that have been out of the box.
“We are leading the way on reducing the amount of product going to landfill,” says Wilson.
A key element of the Dentressangle approach involves the sharing of resources and leveraging shared capabilities. “Lots of companies are coming to us because we offer operating solutions that put customer needs into the solution. It’s a different mindset.
“The innovation is coming through – IT solutions that give end-to-end visibility – giving us differentiation. One of the things we are doing is telling people where the skill sets lie in the business.”
Malcolm Wilson has some 25 years experience in the logistics industry.
Wilson joins New Wave Logistics, part of the NYK group, rising to become deputy managing director.
He is promoted to managing director of New Wave Logistics.
Wilson joins Christian Salvesen as managing director of its dedicated logistics services.
Norbert Dentressangle takes over Christian Salvesen. Wilson becomes chief executive of Norbert Dentressangle Logistics UK.