“It doesn’t make sense to in-house - don’t you know what happened to DHL?”

That has been one of the main bull points on the WiseTech (WTC.AX) / CargoWise investment thesis for the better part of the last decade (referring to an aborted IT in-housing project at DHL that culminated in a ~EUR350m writedown). The view was broadly that for the big forwarders TMS technology is better outsourced and CargoWise is the clear leader in its category.

Well, that was a decade ago… now enter DSV.

In today’s Capital Markets presentation DSV directly spelled out they are migrating to TANGO from CargoWise.  

The rationale: They are moving from off-the-shelf to owned core systems.  “…long-term ownership is cheaper, faster and more resilient than off-the-shelf solutions – and reducing dependencies on third-party providers”.  DSV is expecting long term productivity gains and ‘significant’ cost improvement.

The timing: Upgrade of the system in 2026, and roll out starting 2027. ~25% volumes currently on TANGO.

The writing has been on the wall for this for a few months but rewind to last year and the Schenker acquisition was viewed by the investment market as a bull point for WiseTech as CargoWise was thought to pick up those acquired volumes. The about-face was buried in SaaSpocalypse from a share price perspective but surely not helpful.  

Consensus WiseTech numbers look to mostly have DSV revenue still in, and there’s an adage ‘downgrades are never fully priced in’ (I find this particularly true in Australia). But that said,  WiseTech has underperformed the Australian Technology Index since the early February DSV earnings call when they first publicly introduced this risk, and again back to that SaaS sell-off doing the heavy lifting.

(emphasis on large…mid tier and lower is a different conversation)

This feels like a pretty specific case.  DSV/Schenker combined have huge scale, a decent alternative in TANGO (mixed views here but by most accounts it got better over the years), and an overarching ambitious technology simplification plan across the company.  

Have another view here?  Definitely DM/email me or comment below, would love to hear.  Although surely others will be watching how this goes for DSV.  

DKK 9 billion of additional productivity improvements expected by 2030.  

Of which, DKK 6 billion from AI and technology (including leveraging AI and migrating to TANGO and STAR).

The remaining DKK 3 billion from network optimisation (including further consolidation of physical infrastructure).

The core strategy is consolidating TMS/WMS/ERP systems globally to create scalability, transparency and AI-readiness, including migration to TANGO (Air & Sea), STAR (Road) and fewer WMS platforms in Contract Logistics.

Owning core platforms internally will be cheaper, faster and more resilient than relying on third-party software. Schenker added best-in-class systems including STAR, TANGO and Bitergo, creating the foundation for further consolidation, optimisation and AI-driven productivity gains.

This follows an existing trend with 6k closed business applications and 50 closed data centres since 2016.  DSV is further targeting reducing its 2k business applications to ~1200 towards 2028 and further combining data centres and cloud.  

“1x design, +10,000x usage”, with centralised governance and reusable AI capabilities via the “AI Factory” (essentially a scalable enterprise platform for deploying AI consistently across the organisation).

Lots of AI use cases flagged:

A single platform deployed globally and natively in every market.

Export module efficiency gains of 25–35%, import module gains of 30–60%.  

As of March 2026 47% of global DSV customs volume onboarded with full rollout targeted by end-2026.

Plans to optimise terminals (eg reducing terminal footprint from >400 to 280), reduce Collection & Distribution exposure, better linehaul utilisation and consolidating Contract Logistics footprint (consolidation affecting over 2 million sqm by 2027).

….servicing the offshore wind industry and remote data centres.

No change to the DKK 9 billion synergy target.

Around 45% of the integration was completed by Q1 2026 and path to completion by end of 2026. Full financial impact of DKK 9 billion in 2027.

Accumulated financial impact in 2026 of around DKK 5 billion, with synergies

weighted towards the second half of the year.

99% of largest global customers retained.

The targets introduced by DSV suggest material improvements in profitability (see table below). The biggest drivers are the Schenker synergies and productivity improvements (DKK 9 billion each) detailed above.  

Some underlying assumptions are:

*Conversion ratio: EBIT before special items in % of gross profit. ROIC (before tax): Return on invested capital before tax.

Acquisitions temporarily dilute margins, followed by higher margin levels post-integration

M&A remains a focus.  In a fragmented market, DSV believe they are in ‘pole position’.

I don’t recall ever seeing so much uncertainty in future numbers for WiseTech.

WiseTech has talked to this revenue growth build to unpack its past half decade.  Of course there has been delta around this period-to-period and with M&A lumpiness, but it is a fairly straightforward build.

But looking forward…

Does WiseTech shed smaller and mid-market customers (disgruntled on price amongst other things)?  What does the slope of the DSV run-off look like in revenue (and operating de-leverage) terms?  Could another large forwarder leave?  

That’s just on CargoWise.  Perhaps just as many moving parts on e2open (which had been weak pre acquisition).  Can that business be turned around under WiseTech ownership, and could a combined entity drive revenue synergies? The early feedback I’ve had on that one is that on paper there are really good cross-ownership opportunities but in practice there is some scepticism.

And in the bull camp can WiseTech layer on AI tools to drive revenue upside?  Plus they have some product growth opportunities they are excited about (eg Container Transport Optimisation).  

All for subsequent posts (as always DM or email me if you want to chat on any of this).  But for now, this is what consensus looks like.

Note in the numbers above FY26 has the uplift from the e2open acquisition.  FY27 annualises one additional month of the transaction and FY28 is clean from a growth perspective.  

Disclaimer: Informational content only — not investment research, advice, or a recommendation. Any estimates, expectations, forecasts, etc are either from management or consensus expectations as indicated.

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