Danish logistics giant DSV is under pressure to rush through a colossal IT integration so its sprawling global computer systems can compete with artificial intelligence (AI)-driven operators that have sent shockwaves through the industry.
The pressure was already on DSV after its €14.3bn (DKK 106.7bn) takeover of Germany’s DB Schenker made it the world’s largest third-party logistics firm last year. The deal lumped it with a heavy financial burden caused by overly complex freight and IT operations spanning 90 countries, and the large debt it raised to pay for it.
The freight market has meanwhile slumped. DSV is rushing to integrate Schenker’s global operations at “unprecedented speed”, to simplify its IT systems, cut its operational cost burden, and to clear a way for it to automate the labour-intensive processes running its €33bn business.
That was even before an AI scare gripped stock market investors in February and logistics share prices dived. Revelations about the potential for AI to transform the labour-intensive logistics sector by automating human jobs emerged as DSV was touring shareholders with a 2025 financial report. CEO Jens Lund celebrated roughly doubling DSV’s head-count by welcoming 85,000 Schenker employees in 90 countries.
The scare was attributed to a claim that the “antiquated, labour-intensive” logistics industry could cut labour and associated IT costs fourfold by replacing the computer systems that help staff run its freight and warehousing networks with AI systems that manage it all intelligently.
It came from a $16m US-Indian AI logistics startup called Algorithm Holdings (Algo), that emerged quickly, signing coveted logistics deals with big brands, starting a pilot with Coca-Cola, launching in the US, and announcing plans for global expansion. It also cited a study that claimed to show how its AI had multiplied productivity in its customer’s logistics by automating jobs.
Its claims came with a thesis that while AI was transforming logistics management from a “labour-intensive, manual process” to a “highly automated, intelligence-led” system, incumbent freight firms were doing little more than digitising old workflows. It said they are using AI to automate operations only one process at a time, when their entire business model needed wholesale re-engineering. This had not come out of nowhere. Algo emerged when Indian software developer SemiCab, whose logistics AI had been made part of an Indo-government scheme to build a national, intelligent freight transport network, was acquired by US investors, introduced to the US market, and shown a way to global expansion.
Fightback
Market watchers called the reaction paranoia when share prices plummeted on the news of Algo’s claims. Nevertheless, by March, with its share price tumbling, DSV executives were impelled to come out and defend its IT integration plans, promising investors it was indeed developing AI to automate labour-intensive business processes, but stating repeatedly that it could reveal no more about its AI plans until 12 May, in its annual strategy brief with shareholders.
Its story was effectively the same as it told shareholders in February: DSV plans to do great things with AI, but to get there, it must first finish one of the largest IT integrations in corporate history, consolidating a complex mish mash of IT systems to create a solid foundation upon which AI automations could be built. Hence, it was rushing to get the integration done, not only to get its business – bloated by the merger – in good financial shape, but to make meaningful AI automation possible.
That was the answer DSV CEO Jens Lund gave when, even before Algo emerged, financial analysts were pressing DSV over the revelation that US road freight broker CH Robinson had used a “fleet” of AI agents, built by a team of 450 software engineers, to increase productivity 40%, cut a 10th of personnel, and push gross profits up a quarter. DSV’s productivity was meanwhile flagging. Lund promised that AI automation would be the next stage of its IT consolidation, and it would cut DSV’s cost of operations “on the scale of billions” of Danish krona. DSV’s share price rose even as he spoke.
Lund’s confidence in DSV’s strategy was undaunted. The measure of success in AI automation was not productivity if it required investment so great that it cost profitability, he told analysts, in answer to CH Robinson’s success. And thousands of IT agents would each bring only incremental gains to logistics. DSV was aiming to build AI at the enterprise scale. That required a solid foundation of data and IT systems, which it is building by consolidating the IT system across the globe following the merger.
He pledged wholesale transformation. DSV would make cost-savings by centralising global operations into automated AI systems. DSV had created “a hardline organisation” to do this.
Bad reputation
“It’s very hard to drive those changes in 90 countries and create a global organisation for that,” Lund told investors. “Many people are reluctant to make those kind of changes, but this is the only way you can capitalise on the technology.”
It is already doing this to automate customs administration for cross-border shipments, where bureaucratic processes keep 5,000 DSV staff filling in forms. The process would be centralised globally, automated, and then provided as a service back to country teams dealing with border processes in its various divisions.
DSV was meanwhile rushing to complete the IT integration so it could apply AI automation to all labour-intensive areas of its business. That involved rapidly consolidating business software systems into single applications in each of its business divisions, it said in its 2025 report. It was merging all data into a single platform upon which the applications would run. Customers would be served by a single portal and their systems would be integrated to its own through a single middleware layer for both API and EDI interfaces, with all running on a consolidated IT infrastructure.
Having appointed country management to do operational and IT integration across the globe after the merger, it began executing it one country at a time, each following an integration cookbook it has developed after doing nearly 20 mergers in some 40 years.
The cookbook includes a 32-stage IT integration plan that has become part of the merger story it tells. Its growth strategy was to do mergers and acquisitions, according to its 2025 report. Its simplified, single data, software application and IT infrastructure was not only necessary for success, but a prerequisite for business re-engineering, and for AI automation. Its disciplined, systemic IT integration plan was necessary to make that happen.
Its tenets made rapid execution possible: central governance, clear accountability and phased execution; managed by teams required to maintain business continuity and safeguard customer relationships.
It is a high-stakes strategy in logistics, where live operations are dependent on systems, said Mark Davis, vice-president of Egremont Group, a business transformation consultancy. The reputation that large IT integrations have for going wrong in any sector is justified, he said.
“Smooth integrations remain the exception rather than the rule,” added Davis.
Even well-run integrations involve difficult trade-offs. But DSV’s integration of €1.5bn Swiss air and sea freight forwarder Panalpina in 2019 was an exemplar: executed methodically, with operational continuity protected before any IT platform consolidation was pushed through. Similar caution accounted for Microsoft’s success integrating LinkedIn, he said. Early consolidation was resisted. Some operational independence was maintained. Decisions followed business needs.
“Weaker integrations attempt to consolidate systems without clarity, underestimate data complexity and allow parallel environments to persist,” said Davis. “Most failures can be traced back to decisions being made in isolation from how the business actually works.”
Track record
Panalpina had been in the middle of moving its global IT systems onto SAP when DSV took over. DSV moved the Swiss operator onto its in-house logistics systems instead. It is doing the same with Schenker, but progress has been complicated, according to its 2025 report.
Its consolidation of Schenker’s contact logistics business has been set back five years. It has been forced to run two business systems in parallel in its air and sea division. Only its road freight division is moving quickly to a single system. It reckons a single data layer is making it viable to run parallel business systems while it works on unifying them.
The integration has meanwhile dragged profits into a trough, Lund admitted in February. DSV is rushing to complete the integration to restore finances that have been undermined by the size of the deal and what DSV portrays as the comparatively worse state of Schenker’s finances, and to repay debt it used to buy the German firm.
The freight market, meanwhile, is suffering a longstanding downturn that, as Stax Consulting put it recently, has made mergers likely as firms become distressed. DSV’s own pre-merger business had been mounting costs for half a decade up to the Schenker deal that doubled its size last year, one analyst said in February.
By year end, it expects to have spent €1.5bn integrating the combined business, for the sake of €1.2bn in permanent cost savings. DSV is counting on the AI automation it does after it completes the IT integration next year to correct the fall in pre-tax profits that preceded it and, Lund admitted in February, revive flagging productivity.
AI-driven competition, high debt, low profit and a flat market are not the only things forcing DSV to rapidly conduct one of the world’s largest IT integrations, its 2025 report said. Under pressure of increasing cyber security threats, it is trying to consolidate its computer systems as soon as possible, because it believes their complexity makes them vulnerable. War has made supply chains more of a target.
DSV said the answer to all of these problems is simplification.