Episode Transcript
[00:00:01] Speaker A: Hello and welcome to the Lodestar podcast. I'm your host, Charlotte Goldstein.
This episode, I am joined by Beat Simone, Chief Operating Officer at DP World, to talk about why a one size fits all approach to supply chains is failing and how instead flows increasingly need to be designed around specific industries.
So, as a bit of background, for decades, supply chains have been designed around scale and efficiency, which both sound like great things. But today, that one size fits all model is actually starting to break down. This is because the risks facing retailers or pharmaceutical companies or the food exporters, they can all look completely different.
And that means that the logistics solutions need to be different too. We're going to be discussing what this actually looks like in practice, with a specific spotlight on retail and healthcare verticals.
So, without further ado, join Bayat and me as we take a look at the DP World trade platform and unpack what DP World is calling its toolbox to have a look at how it is designing specific supply chain solutions for each individual customer. Let's get straight into the episode.
Hello, Beat, it is great to have you on the Lodestar podcast today. Thank you for joining me.
[00:01:18] Speaker B: Thank you very much, Charlotte, for having me.
[00:01:21] Speaker A: Before we deep dive into why the traditional method of a one size fits all supply chain isn't necessarily suitable for today's trading landscape and hear all about the DP World trade platform, can you please introduce yourself, like your career background and your current role at DP World?
[00:01:39] Speaker B: Well, my name is Beard Simon. I'm Swiss.
I started in this industry 1982 in Switzerland.
And since then I enjoy being part of this industry and kind of. I, I worked in several countries. I worked between Europe in Mexico, Colombia, Brazil, in the US in Asia, and also in now in the Middle East. I'm the CEO of DP World Logistics.
So I'm responsible to building the capability to kind of have the global trade platform in place and to make our customers successful.
[00:02:21] Speaker A: Well, I'm looking forward to hearing more about that. And we were talking before this call. The wonderful thing about working in logistics is getting to work in so many countries. And you certainly have ticked off quite a few there. And Beat, you've been at DP World for about three and a half years now. So from your perspective, how have things changed for the company in that time?
[00:02:42] Speaker B: Yeah, Charlotte, maybe we start in the, in the history a little bit in, in 1972, actually. DP World started in Mina Rashid as a port operator.
And when you see it now, today we have about 125,000 people globally we have about 24.5 billion revenue and logistics has now 53,000 people with about 10.8 billion revenue. So you see it's actually a huge growth.
And when you go back, initially it was a local port operator, then in about 2000 it became regional and in 2005 it was a global port operator. And then actually the management at that time decided hey look, we go into marine.
Actually also we do have about 500 vessels in the marine service there. We have from container vessel and feeders. We mainly do the feedering for the global shipping lines.
So that was the second pillar actually. First we had ports and terminals, then we had marine solutions.
And in 2022 actually the journey of logistics started when I came. We actually just bought a number of big companies like Imperial, which mainly an African leader in logistics or Synchron, which is a big contract logistics leader in North America and Europe. And then we bought another number of companies.
And actually the job there, what we did, and my job is to build that global trade platform where we have the capabilities which we can offer end to end, where we do have the industry verticals, the eight industry verticals and the 23 sub verticals. And we actually have those 53,000 colleagues who work day in and out to help our customers to be successful.
[00:04:37] Speaker A: And when you talk about end to end supply chains, what exactly do you mean?
[00:04:41] Speaker B: Well, I think, look, there is one thing we have to consider there. Normally in international trade you have incoterms.
So you have a buyer and a seller and then they can decide how do they buy and sell and where actually the risk goes from the seller to the buyer or from the buyer to the seller.
And what we offer is in a way you can have one service in our toolbox being it simple customs, house, brokerage clearance somewhere to the end to end, which is actually from the purchase order management where we take on new purchase order, where you order from the supplier. And even before the physical transport starts, we work with you and we organize everything until you actually sell it to the end consumer, which is our market access.
So that's the true end to end. And then based on the incoterms it might be X works or FOB where you split between the importer and the exporter. And as we have a global network, we of course can cater for both cell and to buy.
[00:05:46] Speaker A: And what are the benefits of this for your customers? I mean take right now for example. Obviously there's this escalation of conflict in the Middle east and things are so uncertain and they're changing every day. So how would perhaps an end to end supply chain, how would that help customers in this current situation?
[00:06:03] Speaker B: Well, let's take the current Middle east crisis where we have now a large number of stuff relentlessly working to find solutions. For instance, we're now looking for alternative routes. And the priority is clear.
Number one is essential goods, isn't it? So it's about food and pharmaceuticals.
[00:06:22] Speaker A: Yes, absolutely. And I mean this is just one of the factors that is making 2026 so volatile at the moment, to say the very least. The two big buzzwords are of course tariffs and geopolitics.
So how do you see things from your perspective? Is global trade still flowing well alongside all of this chaos that we've seen?
[00:06:42] Speaker B: Yes. And, and look at it like this. I think global trade has been flowing, is flowing and will be flowing. I always put it like global trade is like water.
It always finds the way to kind of connect demand with supply. And I think the big topic here is only constant in global supply chains actually does always continuously change.
[00:07:11] Speaker A: Yeah, I think it's something like over 90% of businesses expect trade growth in 2026 to match or exceed 2025. And yeah, as you said, it is like water, it will find a way no matter what happens. But presumably this kind of contradiction of growing trade alongside growing disruption is going to mean that something needs to be adapted within global supply chains and the way that they work. And that is exactly what we're here to talk about today. The theme of this episode is of course exploring why a one size fits all supply chain isn't working anymore. So first of all, what is a one size fits all supply chain? What are the characteristics of one and how long has it been like this?
[00:07:53] Speaker B: Well, I think there's a lot of people who kind of come up and say, well you know, a container is a container, a shipment is a shipment, we move it. And has actually for, for quite a long time people went on that and you have to look a little bit at the history.
In the past you had mainly kind of freight forwarders doing freight forwarding, contract logistics, companies being focused on contract logistics, shipping lines on shipping line and Portland terminals, important terminals. And in the last year you actually have seen that shipping lines went into freight forwarding activities like we from a port internal provider go into end to end.
And there is not anymore this kind of everybody focuses only on one thing. It's actually everyone focuses or most of them focus on several things.
So it's not kind of one solution fits all anymore. And you see that when we build our global trade platform where we have the capabilities, where we asset appropriate, for instance, we have freight forwarding, we have customs brokerage, we have contract logistics. So we have a full range of activities.
And then we have the industry verticals where we have eight of them and 23 sub verticals. And then we have actually more than 53,000 people now in logistics focusing on providing those solutions.
So there is change, there is change in the entire system as such.
[00:09:33] Speaker A: And what do you think is the driver of that change?
[00:09:36] Speaker B: Customer demand and also political change. You see in the past everybody talked about globalization, everybody talked about smooth end to end, etc. And now you see the tariffs as you mentioned initially, it's going again into kind of block building.
There is global competition between China and the US and certain people trying to protect the markets. And this all has of course impacts on the supply chain.
Where do you manufacture? What do you manufacture? And that comes then from the geopolitics sides.
Where do you want to depend and where do you do not want to depend? And that again has an impact on the supply chain.
[00:10:20] Speaker A: Well, we're going to be shortly looking at some specific examples of specific customer demands. But like you mentioned, there are so many verticals within the DP world logistics trade platform. There's like retail, perishable, healthcare, automotives, I think eight in total. And of course within that there are so many different companies of different sizes, different origins, different destinations, as you just said. So in a general sense, how are you able to personalize logistics across this many customers and this many requirements? It seems like quite a difficult task.
[00:10:51] Speaker B: Well, maybe give you an example, we have eight verticals, so we have automotive, fifth chemicals, consumer health, industrial, perishable, retail and technology.
And then let's say for instance in technology we have a sub vertical data centers.
And you have to see that data centers, very specific area for instance where growing very fast when you see now the Internet plus virtual reality plus AI and there is a growing demand for those services.
And what we do is actually we do have the specialists who know that area, who know the customer requirements.
And then what they do is actually looking at the toolbox which are all the capabilities, how do they pack it best together to have ideal customer solution.
So that's how we actually look at what are we providing, what are the eight industry verticals. And then we are really looking what are the sub verticals where we then have the expertise to give that customer segment a specific solution for their pain points.
[00:12:01] Speaker A: Well, I think it would be quite Helpful to look at a specific vertical. So let's start with retail. I mean, what are the specific requirements of this vertical? How sensitive are these supply chains to. To disruption? Because presumably it's not like perishables where these things are going to go out of date. So what are the specific requirements of the retail vertical?
[00:12:20] Speaker B: Well, you see, retail is not one market. You have for instance, fast fashion, then you have home good retailers, you have hypermarkets and they have different kind of requirements. And you see that nowadays you have smaller batches, it changes more often. Even the distribution is not anymore the same. In the past you went to kind of shopping center, you bought your clothes. Nowadays a lot of youngsters are buying the stuff from E commerce Internet. They order three or four pieces.
If they like it, they keep it, the rest they send back. That's very different from a hypermarket where you actually have to have a very sustainable, very solid, regular, even to a degree slower supply chain. So that's also where the medium of transport. In some areas you use more air freight, in some areas you use more ocean freight.
And then of course you have the mixes where we offer cl.
So if you look at retail, I believe this one size fits all is not working because you have clearly different pain points and different requirements. And that also makes it so exciting to work in our industry, isn't it?
[00:13:32] Speaker A: Definitely. And I am definitely guilty of ordering a few things online and sending some of them back. So I'm glad to hear that you're keeping that support supply chain flowing.
I want to take a look at a specific example here. And I think there's one big fashion retailer within your trade platform and for this customer, you actually centralized purchase order management and shipment tracking across the supply chain. So what were the key steps of this and why do you think that visibility makes such a difference in this vertical?
[00:14:02] Speaker B: Well, look, when you talk about purchase order management, let's say in the US the biggest retailers, for instance, they order thousands of pieces. Some of it comes from Bangladesh, some of it comes from Pakistan, some of it comes from China.
And they might come in different sizes, different colors, different genders. You have kids, female, male.
So in a way, when you want to bring that at the right moment to the right store, you need a pretty complex supply chain to do that. And what purchase order management is about is actually we do have the systems where when somebody in the U.S. for instance, or in Europe or wherever, orders pieces, we do the tracking. Actually from the moment it is our system until we get proof of delivery and the system actually what it does, we then go in contact with the suppliers, we organize, we consolidate based on the date when it has to be at the store.
And then partially it's direct packed at origin and goes directly to the store. For instance when it is a new wave or it goes to a distribution center and then it's distributed to the stores. So there are several ways how to do that and the specialists are actually designing the solution, what is best for the customer. So that's purchase auto management. And then maybe on the visibility, which I think is a broader topic, you know there is most probably every company in logistics and supply chain offers visibility.
But what actually is that?
Now if you are a customer and you have thousand shipments and I come up and say Charlotte, I can show you visibility where your containers are.
You're not going to spend your time looking for tiles and containers. Actually what you want to have is exception management.
You actually want to know which shipment is not as per plan and then you will tell me as logistics provider, hey look, if there is a problem, you have to make it back to plan.
So exception management is actually the big topic there.
And to come to exceptional management you need also the technology to do that. And we have that for instance that we have workflow tools where every step from the placement of a purchase order to the proof of delivery is in a system and then you contract those milestones and when there is a deviation you actually can get and take corrective actions. And that's our job to do. And I think one thing is actually the exception management when you talk about visibility and then actually to what level you want to see your shipments and that is where you can go and say, okay, I can give you visibility on your container, but then how do you know what is in the container? Did you actually receive from your supplier all the merchandise you ordered or you received only part to it?
And there what is actually key is to also visibility to the SQ level, to the line item level so that you really know, okay, my supplier is going to deliver me out of the 10,000 pieces for instance, which I ordered those 5,000 pieces in this container. And I think that's where for instance in fashion retail purchase order management, this is pretty advanced nowadays.
[00:17:37] Speaker A: Yeah, that makes a lot of sense. And when there are so many milestones within the supply chain and I know that myself as a, as a fashion retail customer, if I order something, I'm constantly checking my phone to see, you know, what point is it at, is it out for delivery yet?
And there are so many data points that the customer does want. So do you think that with this specific vertical, that data coordination and that kind of digital infrastructure is in some ways just as important as the physical infrastructure?
[00:18:09] Speaker B: Well, it's actually from an information perspective is of course even more important than the physical structure because you want to clearly know where it is. And then you can actually look, we are asset appropriate. So we, what we do is we control choke points in our supply chain, which is especially in terms of like now we have crisis, it's very important to actually control certain part of the assets.
So we call ourselves asset appropriate, meaning we have the assets we need to provide the service. And in certain ch points we control ourselves.
However, if there is a lot of assets available on another market, we can lease.
So that's how we actually approach that.
And the point there is we kind of provide the service end to end and you have actually one is the physical flow, one is the information flow. And then of course also you have the money flow. And when you talk about the money flow and additional services like trade, finance is of course also one thing we offer.
[00:19:13] Speaker A: Exactly. And that links very well to the previous episode we did with DP World, Sinan Ozcan, which I do encourage all our listeners to go back and listen to, if you haven't already. I mean, of course, as well as this digital and physical infrastructure within the DP World toolbox, as it were, employees also play a huge role. So what part do people play in the DP World logistics trade platform to help customize supply chains and move away from this kind of one size fits all idea?
[00:19:43] Speaker B: Maybe have a look at our trade platform. Let's say freight forwarding. We have more than 300 offices, we have more than 500 contract logistics and warehouses. We operate more than 10,000 trucks. We have ports and terminals, we have a large number of free zones and economic zones all operated by people. People largely are the clue to make it happen.
And look, technology is supporting, but the key are the people. And we have about 125,000 people globally. Out of those, about 53,000 in logistics, it's all about people. And maybe just to jump on, the topic which you might bring up is, oh, you know, new technology, does it hit the people?
Actually, I believe it enhances the people.
So we are actually supporting a lot of our people with AI tools so that they can do their work more efficiently.
So I think there is, there's a huge upside potential in that area and people definitely make the difference. It's about the know how to kind of deliver the service Even the personal interaction is still important in our business.
[00:20:57] Speaker A: No, absolutely. I think it's very important because technology is not going away. So I think it's very important that you have the technology and people that can work in harmony together and actually enhance people's job with AI. I think that's a very good point. I think we have time to take a look at another vertical too. As well as retail. This is one that is also time critical in a slightly different way. That is of course healthcare. And this is a sector that seems like it has quite a lot of specific requirements. So firstly, when looking at the healthcare supply chain, how is that working right now? Is this also a common example of where the one size fits all is failing?
[00:21:33] Speaker B: Well, I think when you look at the healthcare vertical, I think we do have in a way three sub verticals there. We have the branded pharma generics and humanitarian aids.
And when I look at it, the entire health supply chain is of course crucial for many people. It's the health of the people. So the first thing is of course that you deliver on time and in full.
And the second one is, you see there's a lot of waste in the supply chain. And I give an example if you go Africa, we have a big market access business, for instance, where we have a lot of customers, where we actually do, we represent those brands and actually own the goods and then we distribute, we do the route to market the last mile.
And to give an example, there is in one case we had 14 different warehouses in 14 countries and all those items have an expiry date and after that the medicine is not helpful anymore. And so what we did actually we centralized it in South Africa in one warehouse.
And then we have regular distribution to all the hospitals and to the stations which actually makes sure that you don't have so much waste in there. And I think there's the entire logistics and supply chain industries is advancing a lot.
[00:22:56] Speaker A: I mean that also links to another episode that we did with Mohammed Okuji on the Africa supply chains. I think one thing he touched on in that episode, but we didn't go into full is the kind of customs issues in Africa. A lot of cross border customs can be quite slow moving. Is that something that is a bit of an issue for healthcare supply chains? If you've got time sensitive shipments that are moving through these highly regulated customs environments, Is there anything that DP World does there that can speed that up?
[00:23:27] Speaker B: Well, I think look, we have about 400,000 points of distribution in Africa, which actually is, I Think second to none. And what we do is there. We kind of take the cargo over, we distribute and we make sure that the vaccines, the medicines arrive to the people at the right moment. And I think that's a responsibility not only for us. I think that's the entire industry now. Is customs a challenge? Yes. But even there, I believe in the last years a lot has been done to smoothen that. Is it still problematic? Yes. Is it better than in the past? Yes. So I think there is definitely progress in that area.
[00:24:10] Speaker A: I'm sure there are so many more verticals we could go into. I really would love to explore all eight and hear your take on those. But looking ahead, if supply chains continue to be designed with this single template, what risks do you think that businesses face over the next few years? I mean we've already seen this year continued external shocks. It doesn't look like this volatility is going away anytime soon, sadly. So what risks do you foresee ahead?
[00:24:40] Speaker B: Well, I think you see that now, and I'm sitting here in Dubai is the impact of geopolitics and the kind of impact on supply chain. And there will be continuous change and our job is to find solutions and we do that continuously.
We make trade flow and that's the thing where we have the capabilities. And I don't believe that this one size fits all is is prevailing. I think there is now. We do have our eight industry verticals, 23 sub verticals, we do have the toolbox and we see that customers need that to be competitive. And our job is actually to make them prevail in a very competitive environment.
And this will include future geopolitical challenges. There will be climate challenges, there will be technology challenges.
And I think that's where our job is, to kind of overcome them.
[00:25:44] Speaker A: I'm just curious, when you're offering customers these very personalized custom supply chains rather than this one size fits all template, is it more expensive for your customers or what is the cost benefit ratio like there?
[00:25:59] Speaker B: Actually it's not because we kind of serving from small customers to very large customers and there might be a customer who use one capability or two or three.
And we do design like in Lego principle, we have a kind of range in our toolbox and we put it together. Actually I believe that the design solution cater more to the customer requirements and make the customer more competitive than trying to go and do it by themselves or go and simply take different parts in different areas.
[00:26:36] Speaker A: Looking forward to the next five, 10 years. What are your priorities as DP World?
[00:26:41] Speaker B: Well, as DP World. We want to be making our customers successful, grow and expand our trade platform and include new services. We are kind of having insurance. We now are looking at stablecoin. So there is, there's new stuff coming up and I think there's also one topic which increasingly becomes crucial is resilience of supply chain. There's so many changes where our customers have to look, oh, where do I source from? Who is my supplier? How will that look like in the future? And it's not so easy because it's a question of capital allocation. You cannot simply shift from today you buy in China, tomorrow you buy in India. There's a lot of complexity behind that.
So we are there to serve the customers and I'm very convinced that we're going to grow with our customers also in the future.
[00:27:33] Speaker A: I really find it so interesting that I think previously it was like speed and efficiency were the number one requirements and now it's also speed, efficiency and resiliency, as you said, is definitely one of the main requirements, I think, for supply chains at the moment. Thank you so much, Bayat, for joining me and for giving me so much information on the DP World trade platform. I feel like we've gone through quite a lot this episode, so I really, really appreciate your time.
[00:27:57] Speaker B: Thank you very much.
[00:27:59] Speaker A: Lovely speak to you. Goodbye.
