DHL CEO Oscar De Bok Talks Shipping Impacts of Baltimore Bridge Collapse | Bloomberg Talks

Good morning, pleasure to be here. Yeah, the thing is, the main impact of this one is more in the automotive roll-on roll-off. It's less on the container part, of course there is a container element in there. Actually we got a few containers on the ship as well which we need to manage at the moment. But I think if you see one thing we were discussing that earlier, if you see one common theme in supply chain management over the past four years is that ability to fast respond, that agility to fast make changes into how a supply chain is organized. And I think that's what you're going to see here as well. You're going to see a shift from container movements from this port to other ports. So I think while the impact to the port itself is dramatic, while obviously the event itself is tragic, the overall impact on the global supply chain and the US supply chain I think will not be as large as you would fear.

Yeah, I don't obviously I've not been directly involved in the discussion on that, but I mean it's a few containers so it's not compared to the number of containers we have there. But one of the things you need to make sure is how we get them released and how we can find alternative routes for them, how we make sure that our customers can plan the products that are in there, alternative routes, alternative plans, alternative products, so to keep those supply chains running. And I think the main thing I was saying in our last interview with Bloomberg at the time, I said there is something around the corner in supply chains, every time we just don't know what it is. I could not have guessed that now we will be talking about this event. And I think one of the main things that you see is that both our customers and ourselves, but I would say everybody working around supply chain, but actually also everybody working in other parts of our customers, is now far more tuned to having to respond fast, decision-making using data to make sure that we can have the alternatives and fast found alternative solutions how to manage the supply chain. Because I think this is one of those events that will be happening.

Yeah, and I think that is a very important point. Where in the past, let's say more than four years ago, it was all about just-in-time, right? It was all about having the lowest stock levels possible, having the most efficient and cost-effective supply chain. What you now see is it's far more about the resilience of supply chains, to make sure that they're organized in such a way that you can respond to these things. Because if you got your minimum stock levels, then obviously a two-hour delay is actually dramatic. If you make sure that you build the supply chain in such a way that you can respond to that, it already helps. And I think that's something you see happening at the moment, is that rather than the minor cost being the main thing, now it is making sure that supply chains keep running. Because many of our customers have now realized that supply chains are more about availability and making sure that you can continue to serve customers rather than only having minimal levels of minimum cost.

I think it's exactly it. The availability of products comes far more the priority than purely the just-in-time. Because what we all have learned is that the cost of a disoptimized supply chain because of an event is way higher than having a 5 or 10% lower or higher stock level. Now obviously with today's interest rates, stock levels have become more relevant to reduce those. And that's I think where also the whole element of data analytics converting into AI, converting into generative AI, come in as well, to make sure that we plan supply chains real-time better and better on the use of data and also on the use of historical data. And there's a lot of historical data in the past four years that helps us to learn how you can respond to things.

Well, when we talk about port control, there actually is. In ports there is a traffic control and the connection between the ports. So I think in shipping it's more advanced than it makes it seem. And I think some of the elements that you could see in this event as well is that they have been able to respond pretty fast to avoid even more dramatic events because of good communication. But you're right, the use of data is fast evolving. And one of the things that you see in general in the logistics sector is that the amount of investments that goes into the sector compared to four years ago is exponentially more. That means that the amount of innovation in the sector is exponentially more. And you see that in data, in what we can do with data and data analytics, you see that in robotic solutions and other innovations. So therefore you see a fast evolvement. And I would internally always say that if you look at the last four years, the speed of innovation in the logistics sector compared to the 10 years before is mind-blowing. So that actually helps us to further increase and improve.

I think the collaboration between public and private, if you take for instance the example between ports, because ports are in some cases public, some cases private, some case a mix of both. I think there is a good interaction. But I think if you look at the speed within which that has evolved on the business side, for instance now the interactions with companies is far more on CEO level than where that before would be two levels down. Because CEOs and CFOs of our customers see the importance of being very close to what's happening in supply chains, because that's a differentiator in your profitability, your market share, your growth. I think gradually governments need to make that same step to make sure to understand how important it is for the success of the economy to really be close to the infrastructure. And that's not only hardware but it's also software, and those investments need to come from there as well.

I think there are, to put it in different words, I think the capability to respond to the unexpected has evolved enormously. The only problem is that the unexpected happens more than in the past. So I think it has improved a lot, and that is because of bigger investments, the view of necessity of having those capabilities. But on the other hand, the number of events is evolving faster than the development of the sector. But I must say, if I talk about the market in general and our customers, the capability of responding to things has evolved enormously.

Charge more and cost more, two different things, right? Because I think what you see is that because the professionalization of the sector has evolved and therefore the value that it brings has evolved. So it might be that there is a higher price to pay, but actually the benefit might also be higher. So that doesn't necessarily translate in higher cost because the efficiency might improve as well.