The EIC's Supply Chain Case Study Series highlights key EIC Survive and Thrive Insight Report case studies all throughout COP26, highlighting the success stories of the energy sector in decarbonisation and innovative new energy transition technologies.
On Day 12 we look at how Deugro is inspiring logistics innovation for offshore wind.
How is Deugro thriving?
Recognising the benefits of diversification in securing a more sustainable future, Deugro has gone above and beyond for Siemens Gamesa, developing and deploying an innovative offshore wind logistics solution that has not only cut process costs by 18 percent but critically ensured that the handling of sizeable and highly valuable components is safer, more reliable and more efficient.
The challenge
Deugro Group, like many others, was challenged by the volatile nature of the oil and gas industry, yet just five years ago, 70 percent of its business was derived from activities associated with the sector.
With its portfolio leaning too heavily on this segment, the 2014-2016 crisis sparked a decision to better balance its wider offering in order to secure the company’s long term future.
Indeed, this was by no means an easy task. With a history spanning almost a century, Deugro Group had developed a sound yet somewhat entrenched reputation as a one-stop shop for complex logistics services in the oil and gas market, capable of delivering vast quantities of cargo for sector players every year.
The need for change was clear – the company was both struggling to manage the unpredictable peaks and troughs of the oil and gas sector yet had huge potential to overcome such challenges by being situated on the doorstep of the UK’s booming offshore wind sector.
The question was, could it successfully innovate to consolidate its position as a leading offshore supply chain solutions provider in other key regional energy segments?
The solution
Low carbon, sustainable sectors were quickly targeted, yet operationalising these goals was easier said than done.
Enter Siemens Gamesa – a company that Deugro Group already had proven track record with, it now presented a vital opportunity for it to solidify its foundations in these diversified sectors.
The two companies’ relationship spans 15 years, Deugro having previously assisted Siemens Gamesa on cost reduction and efficiency where it had been experiencing challenges in relation to tariff-related pressures.
This was a vital foothold. Not only did Deugro have a strong understanding of Siemens’ footprint in Hull, but it also had productive working relations with the company’s supply chain team in Esberg, Denmark.
Leveraging this cohesion, Deugro proposed plans to assist Siemens in reducing its offshore wind logistics costs.
As a leading wind turbine manufacturer, Siemens Gamesa’s supply chain was highly complex, requiring the movement of huge numbers of significantly large components such as nacelles, towers, and blades – all heavy, all fragile and all highly valuable.
To date, its component handling had been suboptimal. The organisation had built its logistics systems around a risky, time consuming and expensive lift process using a jack-up vessel in Esberg. Not only did this entail the use of overly complicated and inefficient equipment such as cranes, but its lifts could often not be completed under high-wind conditions, resulting in unpredictable delays on its scheduling.
Through collaboration with Deugro, however, Siemens Gamesa’s approach to component handling has been drastically transformed.
The two companies worked in an almost indivisible manner, developing a new transit system between Hull and Esberg centred around specifically designed vessels built with the purpose of minimising risk through the elimination of lifts altogether. In the newly optimised process, trailers are rolled directly onto these bespoke vessels which themselves have been built to maximise overall storage potential for Siemens’ stowage capability towers, nacelles and blades.
It was by no means an easy undertaking. The trailer-based solution was a radical and innovative logistics concept that required two vessels to be designed and built from scratch. Further, as wind turbines and their associated components have continued to increase in size, Siemens Gamesa has committed to modifying Deugro’s ships, editing both their length and width in order to accommodate larger components.
The impact of these efforts cannot be understated. Siemens’ Gamesa has benefited from an 18% reduction in offshore wind supply chain costs as a result of Deugro’s bespoke and innovative solution, while unpredictability has been significantly reduced where cargo no longer needs to leave the ground.
For Deugro on the other hand, the successes have been equally significant. As a result of its efforts, the company secured a five-year extension beyond the initial agreement, consolidating its position as Siemens Gamesa’s long term contract partner for the movement of large components between Esberg and Hull for the foreseeable future.
Indeed, these are fantastic foundations from which the firm can further diversify away from oil and gas. And Deugro isn’t planning on stopping at offshore wind, the company now also marketing its logistics solutions within segments such as cabling, subsea infrastructure and carbon capture, utilisation and storage (CCUS).
Oil and gas activities now account for just 50% of company revenue, and while the Siemens Gamesa contract is the company’s largest in the renewables space, it is a milestone that simply outlines the edge of new horizons for the firm moving forward.
About Deugro
The deugro group is comprised of four independent companies that offer far-reaching competence, experience and know-how in their fields of business: deugro - Project freight forwarding; dship - Global Ocean transportation; dteq - Transport engineering solutions; dhaulage - Specialized transportation assets. Their specialities include Freight services, Logistics solutions, Ocean freight, Vessel chartering, Project cargo, Port captain services, Surveying and supervision, Project consulting e Special equipment. The deugro group redefines the one-stop-shop concept for complex logistics services and unifies the dedication, synergies and competences of all group companies. It stands for entrepreneurial, dynamic, best-in-class service and have a solid reputation for our client-centric and best minds approach. All group companies operate according to the highest QHSES and compliance standards. The deugro group originates from deugro, the first company founded in 1924 in Frankfurt am Main, Germany. Today, the deugro group continues to be a family-owned enterprise with a strong financial foundation.
Read the full EIC Survive and Thrive Insight Report here.