Anchored in Klaipėda, international company addressing future maritime transport challenges

The name of DFDS, a Danish company founded over a hundred and fifty years ago, gained prominence in Lithuania in 2001 when this leading European ferry operator launched an operation in Klaipėda. Actually, Peder Gellert Pedersen, an executive of the company that is celebrating twenty years of its presence in Lithuania, chairman of the board of the Lithuania-based DFDS Seaways and executive vice-president of DFDS A/S in charge of the ferry division says that the Danes were smitten by Klaipėda shortly after Lithuania regained its independence. 

After 20 years and more than 400 million euros worth of investments into its Lithuanian business, DFDS has created one of its Baltic cargo and passenger carriage hubs at the seaport of Klaipėda and is planning further investments into the improvement of its service quality and expansion of its positions. The chairman of the board of DFDS Seaways shared his thoughts about what it was that fascinated the company about Klaipėda, and the challenges DFDS and the entire maritime transport sector will be facing in the near future.

More than just geographic proximity

The chairman of the board of DFDS Seaways says that the company’s first attempts of prospecting for an expansion in Lithuania had predated the privatisation of Lisco, the shipping company of the period, by a lot. He says he himself travelled in the former Soviet Union a lot and saw Lithuania as one of the best directions in which the maritime passenger and cargo transport business could grow already then.

‘Culturally, we feel we are closer to Lithuania than Latvia or Estonia, let alone our geographic proximity. We were equally impressed by education in Lithuania and around the seaport town in particular, where there is a heavy emphasis on seafaring. We work with the Lithuanian Maritime Academy in Klaipėda and with the Klaipėda University that trains our business needs specialists. Truth be told, we have never been disappointed with the Klaipėda-educated personnel who work both off- and on-shore.’

Mr Pedersen admits that the prevalence of dry-land transportation in Lithuania makes Klaipėda a unique town that stands out in its attention to sea and seafaring. Quite possibly, it was Klaipėda residents’ love of the sea that has been the contributing factor number one to the success of the Danish company over the recent decades. The DFDS A/S executive notes he has always felt the support of both the seaport’s colleges and the municipality for DFDS becoming established and gaining a foothold in Lithuania, gathering its team of specialists.

‘The Lithuanians that came to work at our company already had all the necessary knowledge and skills, they did not need a lot of explaining. Besides, many of them already had close and valuable connections with St Petersburg, Odessa, Kaliningrad, other towns and cities in the former Eastern block. Therefore, this experienced team helped us attract specialists from all fields and countries in no time,’ recollects Mr Pedersen.

Therefore, the company still considers Klaipėda its number-one hub of Baltic operations, even after twenty years since DFDS came to Lithuania. In fact, the company also has a presence in Estonia and Latvia. For example, Liepaja is the site of a DFDS logistics hub, and in Estonia, the company operates the Paldiski-Kaplelskar route and has an agreement on cargo shipment to Finland.

No business disruption due to pandemic

In Mr Pedersen’s words, even though some passenger routes have been temporarily suspended and there have been some interruptions in cargo shipments, DFDS has tackled the trial by pandemic splendidly. First of all, this was because DFDS makes most of its income from cargo shipment, which quickly got back into the groove, despite a decline early in the pandemic.

‘Frankly, in the Baltic Sea, we have both managed to maintain the volumes of cargo shipments, and the passenger flows were not declining as much as it could have been predicted. Most passengers travelling by DFDS ferries in the Baltic Sea are people who work in foreign countries, and they continued to travel throughout the pandemic. Of course, there have been months when everything was temporarily on hold, but the movement among the Baltic countries, Sweden, and Germany continued for the better part of the last year. At one point, we were, quite possibly, the only transport corridor between Lithuania and the Western European and Nordic countries. Therefore, despite COVID-19, passenger flows have remained quite substantial,’ says Mr Pedersen.

The executive vice-president of DFDS A/S says that the main challenge that DFDS and the entire maritime transport sector will face in the future is no longer the pandemic but rather environmental protection. With international organisations, consumers, and businesses placing a heavy focus on combating climate change, some important changes are due to the sea. But, of course, the challenge of transforming towards a more sustainable business model weighs on companies such as DFDS more than it does on, say, road transport companies.

Future technology is the way to go

‘Dry-land transportation, and vehicles, in particular, have undergone significant development recently, and zero-emission models are already quite broadly available. You will not see an electric truck very often, but it is becoming prevalent around the corner. Unfortunately, changes in maritime transport are yet not as fast, but we understand it perfectly that unless we take measures to reduce greenhouse gas emissions, DFDS and other ferry companies are at risk of losing their position,’ says Mr Pedersen.

In his words, the company is very serious about its sustainability matters and has set some ambitious goals of reducing CO2 emissions. DFDS expects to purchase its first green vessel by 2025. However, Mr Pedersen would not specify what environment-friendly technologies would be in place at the ferry and only noted that it might not necessarily be fully electric but would not use fossil fuel nonetheless. So, in the words of Mr Pedersen, the new addition to AB DFDS Seaways’ fleet – the first ro-pax ferry to be built in 40 years that will bolster the Baltic routes that enjoy service from Klaipėda – will be the last vessel to feature old-generation technology.

Maritime transport companies are yet to make a uniform decision regarding the fuel that will propel vessels in the foreseeable future. Mr Pedersen says that when it comes to short-distance transportation of passengers and cargo, say, between Dover and Calais, electric ferries are one viable option that could be implemented in the nearest future. Longer distances will most probably require other types of fuel and technology, such as hydrogen or ammonia. However, the DFDS executive allows that one interim solution might be methanol-fuelled engines. ‘We will work until we find the best solution,’ he says.

At the same time, Mr Pedersen reminds us that there is more to sustainable business development than using low-emissions technical solutions. The monitoring and assessment of environmental impact is another important element of the sustainability strategy, and, in addition to the usual financial statements, this year DFDS issued its first environmental, social, and governance report. Furthermore, DFDS places a special emphasis on its working conditions to ensure equal possibilities and inclusion for its employees.

Relations first

‘When you work at sea, creating conditions for gender diversity is not an easy thing to do. Nonetheless, we develop and implement a variety of programmes so that the men and the women who work on our ships could juggle between work and family more easily. Another area that has a lot of our attention is working conditions and safety. It is no secret that working in logistics, and at sea, in particular, is quite hazardous, therefore we continuously try to ensure the maximum level of job safety for our sea-based and on-shore employees,’ Mr Pedersen accentuates.

The executive vice-president believes that DFDS’ aim and ability to focus on people is one of the reasons why there is little room for doubt about the future outlook of this company. Mr Pedersen, who has spent nearly three decades working for the company, says he himself is an excellent case in point that this approach works: his partnership with DFDS continues because the company cares about its people. In addition to business expansion, the company is also concerned about fostering its relations with the employees and the clients.

‘We keep reminding ourselves of one cornerstone principle of DFDS: we move forward to grow. Naturally, therefore, in making any kind of decision, we ask ourselves: Will this be the right thing for all? Not just the company’s shareholders, the seaport of Klaipėda – everyone who may be affected by the decision at hand and its consequences. Quite possibly, this approach has helped DFDS thrive and grow for more than 150 years,’ stresses Peder Gellert Pedersen.