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Success stories
deugro Driving forward with digitalisation, innovation and energy transition
Jasmina Tuncheva, Senior Tender Manager
How is deugro thriving? Recognising the need to evolve in the face of difficult market conditions, deugro has taken significant strides forward on multiple fronts. From collaborating more closely with its clients, carriers and ports to leveraging market intelligence, tailoring client solutions, introducing innovative contract models and pursuing transformative energy transition and digitalisation strategies, the company has futureproofed with a brand-new business model. Having successfully completed more than 200 onshore and offshore wind projects in more than 40 countries since 2003, deugro has established itself as a leading provider of key logistics services to the energy industry. From project planning and preparation to complex transport engineering concepts and the complete logistical handling of turnkey projects, the firm has built a renowned reputation. The challenge Despite deugro’s solid position in the market, even the most robust companies have faced hardship in recent years. While the covid pandemic resulted in global economic and societal hardships that impacted capital investments, environmental and climate change commitments, and the global demand for goods and services, the Russian Invasion of Ukraine then further exacerbated the situation, adding even more uncertainty to global supply chains. The key challenge for deugro stemmed from the fact that
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EIC Survive and Thrive
many of its major clients in the energy industry were used to standard contracting models based on long-term fixed rates, yet servicing these contracts proved to be a major challenge in this highly volatile freight market environment. Some carriers would not honour long term fixed rate contracts nor commit on any rate validity. Obtaining space and equipment availability became a challenged due to the overdemand caused by the pandemic. The solution Given the circumstances, deugro recognised it would soon face significant financial difficulties and the inability to deliver project cargoes on time if it didn’t work to overcome these challenges. In opting to proactively follow all market developments and indices closely, the firm successfully began to negotiate alternative contracting models for the project forwarding industry. These models – including index-based pricing, cost plus options or various hybrid models – ensured deugro could provide the highest standards of service to its clients, even when it was faced with a lack of space and equipment availability, skyrocketing freight rates, port congestions and cancelled sailings. Critically, these models are now allowing its customers to benefit from cost efficiencies and optimise their supply chain costs, especially with the current softening of the freight markets in last few months. At the same time, the firm worked extremely close with its clients on obtaining strategically informative and accurate project outlooks, supporting their planning and consolidation efforts while also looking at alternative modes of transport. In addition to these alternative contracting models,
2023