Moving with the Times: DP World’s COO Tiemen Meester

Tiemen Meester has, on paper at least, one of the hardest jobs in the world.

As Chief Operating Officer, Ports & Terminals at DP World, one of the largest logistics companies in the world, he has had to navigate the COVID-19 pandemic and unprecedented supply chain disruptions while still having one eye on perhaps his greatest challenge – climate change.

Dutch national Tiemen has sailed those choppy waters and fixed the weakest links in that supply chain. So how did he cope?

“I'm very focused on what I call a positive environment,” says Tiemen, talking exclusively to Business Chief. “Even if results are under pressure or things are not going your way, you need to create an upbeat, positive, fun environment. People need to work through the highs and lows.”

Starting life 51 years ago as a single operation in Dubai’s Port Rashid, DP World is now an integral part of global trade, with 150 companies spanning six continents and revenue of US$17bn in 2002 – with profits rising by 37% and EBITDA hitting US$5bn.

The leading provider of smart logistics solutions is not just an essential part of the worldwide supply chain, it also contributes an incredible 23.8% to Dubai’s GDP.

The very term ‘supply chain’ entered the public consciousness during the COVID-19 pandemic when the status quo of fully-stocked supermarket shelves and next-day delivery of any product imaginable ground to an unexpected and terrifying halt. The chain was broken, shipping containers were in desperately short supply, and then the Suez Canal – one of supply’s great arteries – became blocked. It was the perfect storm, the nightmare scenario. 

“We moved from a world of just-in-time, where everything is about minimising working capital, where there is plenty of capacity and plenty of competition so companies could book last minute and get a great price. That established way of working literally fell apart,” says Tiemen.

“What happened then was panic mode. As long as people could get their goods, then they were happy. I think we learned from that. When it comes to resilience, the first thing that we've all learned is transparency and visibility, because even today a customer can live with a slower transit time, can live with a higher cost, but you need transparency and predictability, because then at least you can plan accordingly.”

Nearshoring and the impact on DP World

Ports & Terminals is one of the four pillars of DP World, alongside Logistics, Marine Services, and Technology. In simple terms, if goods get on a ship, Ports & Terminals handle the containers at both ends of the crossing.

Put another way, an estimated 90% of traded goods are carried by ship. That is a startling statistic, in an industry full of eye-catching numbers. The volume of global seaborne trade has almost tripled since 1990 – in no small part due to the rise of Chinese manufacturing and globalisation.

However, many commentators and politicians have been calling for an end or reduced reliance on such trade, based on the experiences of the pandemic and also growing trade tensions between east and west.

“I think nearshoring is happening but we need to put it into context,” says Tiemen.”If you have a global supply chain and you have production in four countries and decide to nearshore, then that is not going to happen quickly, it's actually very slow.

“But we do see a trend that some production is moving away from China, with the beneficiaries typically being Southeast Asian countries, India, but also Mexico, as a place that feeds into the United States. But it's not overnight. Neither is it a phenomenon where you will see the trade from China actually shrink. It's more that the growth out of China will mature and flatten, while the growth out of Vietnam, Philippines, India will accelerate.”

Tiemen explains that the impact for DP World is knowing where to have the right ports and terminals in locations that may become more significant over time. 

He cites the example of one customer that wants to move some components from China to Mexico but says that process will take three or four years as they need to build a new factory and switch the supply chain.

“It's a lot of work, and what people may also underestimate is that China is very experienced, very competitive and very fast,” says Tiemen. “So, it's not that easy to just switch.”

Transforming DP World’s environmental impact

From electric vehicle fleets in Peru, hydro-electric powered ports in Chile, and a 100% green energy terminal in Belgium – DP World’s ports and terminals across the world are transforming their environmental impact. 

Transport contributes 24% towards global CO2 emissions and shipping accounts for 10% of those. With the UN’s International Maritime Organisation (IMO) aiming to halve carbon emissions from the shipping sector by 2040, ports and terminals are vital partners in helping all businesses in our industry to reach global emission reduction goals.  

“Maybe the biggest subject right now is decarbonisation. It's the single biggest subject outside the constraints and the physical movement of goods,” says Tiemen.

“It needs to happen and so went to our board. We have our vision for 2040 and 2050, and that’s fine, but it’s really what we can do now and what technologies we can deploy now for quick results. 

“For example, marine fuels will take longer to fix, but we can apply electrification, and we can apply what we call green certification – buying green energy from sustainable sources wherever possible, even if it is at a premium. We rolled that out and the board gave us half a billion dollars in terms to deploy these measures.” 

The focus in Ports & Terminals is electrification and Tiemen explains that they are trying to remove the diesel engine where possible. Ironically, one barrier is supply – with electric vehicle manufacturers facing incredible demand.

Over the next five years, DP World will be replacing around 1,100 diesel tractors with electric alternatives. That accounts for almost half of the current global fleet. 

Of course, those electric vehicles will also need power, and Tiemen admits that DP World is “a huge consumer of electricity”, which is why green certification is a crucial step, and why the company is experimenting with cleaner or alternative fuels.

“I'm optimistic that we can significantly reduce emissions over the next five years,” he says. “In all honesty, the challenge will be those countries that haven't got their act together converting their grid to green. 

“There's one African country where we have this problem and so we went in and said, what if we build it? What if we built a green energy park, whether it's solar or wind or offshore? Actually, now there are two African countries that we are looking at doing this.”

Increased efficiency and BOXBAY

As well as converting to clean, green electricity wherever possible, the other way to reduce environmental impact is to increase the efficiency of port and terminal operations. One exciting way that DP World is helping to drive the future of global trade is the revolutionary BOXBAY storage system.

This modular, automated, storage and retrieval system for containers has been tested and proven in Jebel Ali and now (March 2023) the first contract has been signed to implement BOXBAY in South Korea.

Pusan Newport Corporation (PNC) operates one of the main container terminals in Asia and is the tenth largest in the world. BOXBAY will allow it to take efficiency to a whole new level.

It is estimated that this system will save PNC 350,000 unproductive container moves per year, which will improve truck servicing time by as much as 20%. The whole system is autonomous and run by AI.

“We call it the yard, and the yard is all about housekeeping,” explains Tiemen. “It is where the containers are stored, rearranged, and earmarked. BOXBAY is unique in the sense that normally the containers that are in the yard are scattered around, and if you need to find them, you need to sometimes ‘dig’ or rearrange. BOXBAY removes that housekeeping. There is no cleaning up, you can never miss it.”

Because BOXBAY is a vertical solution rather than just horizontal, port and terminal operators require a smaller physical footprint. Tiemen points out that this is a significant way to save money on land or development. Then of course there are the sustainability benefits.

BOXBAY is 100% electrified. It runs on solar panels which can power most of the production, so if you have access to green energy, it is “a fantastic zero CO2 machine”.

“The whole world was watching us when we started this project just two years ago,” says Tiemen. “Everybody was saying it makes sense, but to convert that into a real-world solution is another matter. It took us about 18 months from construction to proving that the concept works. Now have 10-12 interested parties. 

“The first agreement has been signed, and hopefully the second one will be by the year end and then it will accelerate. My guess is that by 2030, you will have 10 or 15 of these BOXBAYs in specific locations where they make the most sense, but it will transform that place.”

Despite all the pressure and disruption of the last few years, Tiemen Meester shows no signs of losing passion for his 30-year career choice. In fact, he says the current transformation means this is an interesting time at DP World.

“I'm an eternal optimist, so when I wake up and the sun shines, I feel great because it's a new day,” says Tiemen. “We are strong enough in DP World to say if things don't work, then we'll pull away from it, or if we feel we can make it work, we'll apply resources and go for it. So it's an optimistic period, for sure.”