I N N O VAT I O N
FREIGHT FORWARDING
S U P P LY C H A I N
Revolutionizing The Industry
Over Land & Sea
Exploring E-commerce Value Chain
CONNECTING TRADE PROFESSIONALS WITH INDUSTRY INTELLIGENCE
LOGIPOINT
PIONEERING THE FUTURE OF SAUDI ARABIA’S LOGISTICS INFRASTRUCTURE
Farooq Shaikh CEO of LogiPoint
FEBRUARY 2024
Expertise in the Aerospace Logistics
Origin & Destination Services in
Surface Transportation in
150+ Countries
06 Continents
Aircraft Parts Movement
Engine Movements
AOG Services
Dangerous Goods Handling
Time Critical Movements
Airside Deliveries
24/7 Operations
Multiple Control Towers
Service Cargo
On Board Courier
Charter Logistics
Warehousing and Quality Control
- , KT !Q>=E 2JEPA@ N=> "IEN=PAO 1AHġ #=Tġ A I=EHġ ?KJP=?PĤ=ŃKCEOPE?O ?KI www.HÅVNPZ[PJZ JVT
IN THIS ISSUE
34
27
46
COVER STORY LOGIPOINT – PIONEERING THE FUTURE OF SAUDI ARABIA’S LOGISTICS INFRASTRUCTUR
Navigating Challenges, Building Resilience, and Expanding Horizons
16 AGREEMENT DP WORLD AND GUJARAT STATE SIGN AGREEMENTS TO IMPROVE INDIA’S LOGISTICS DP World will build Gati Shakti Cargo Terminals (GCT), SEZs, multipurpose deep-draft ports, and container terminals in Gujarat 27 INNOVATION
REVOLUTIONIZING THE INDUSTRY Vibha Mehta and Jacques Adam, Co-Founder & Managing Director at LogSquare, discuss everything about LogSquare and how the industry is shaping…
40 CRYSIS THE RIPPLE EFFECT The present Red Sea crisis is a complex issue that has an enormous influence on international trade, environmental protection, and security 42 SOLUTIONS SEEKING ADVANCEMENTS Alain Kaddoum, Managing Director at Savoye Middle East, in a candid chat, speaks with Vibha Mehta on the evolving end-to-end supply chain solutions
51 SUPPLY CHAIN
EXPLORING E-COMMERCE VALUE CHAIN Mohamed Mossaad, CEO of Flextock, highlights the advancements in the e-commerce value chain
46 FREIGHT FORWARDING OVER LAND & SEA Vibha Mehta and Lee I’Ons, President of Kuehne+Nagel for the Middle East and Africa, have a brief conversation about the shifting industry landscape and Kuehne+Nagel’s position in it...
LOGISTICS NEWS ME | FEBRUARY 2024 | 3
Standing at the heart of the V&A Waterfront is a figure that evokes familiarity, comfort, and a sense of adventure – Cape Grace, A Fairmont Managed hotel is a timeless presence. With rooms gazing out onto the harbour, marina, or the majestic silhouette of Table Mountain, this grand hotel feels as if it has always been part of the landscape.
a graceful
ICON www.capegrace.com
CONNECTING TRADE PROFESSIONALS WITH INDUSTRY INTELLIGENCE CEO Wissam Younane wissam@bncpublishing.net CEO Wissam Director Younane wissam@bncpublishing.net Rabih Najm rabih@bncpublishing.net Director Rabih rabih@bncpublishing.net Group Najm Publishing Director Joaquim D'Costa jo@bncpublishing.net Group Publishing Director Joaquim D'Costa jo@bncpublishing.net Editor-in-Chief Vibha Mehta vibha@bncpublishing.net Editor-in-Chief Vibha Mehta Creative Leadvibha@bncpublishing.net Christian Harb chriss@bncpublishing.net Managing Editor Kasun Illankoon Editorial Design kasun@bncpublishing.net Rizaldi Febrian Design Christian MarketingHarb Executive Aaron Joshua Sinanbam aj@bncpublishing.net Marketing Executive Aaron Joshua Sinanbam aj@bncpublishing.net Videographer Alexander Bungas Digital Media Producer Alexander Bungas Images used in Logistics News ME are credited when necessary. Attributed use of copyrighted imagesNews with ME permission. All images not credited courtesy Images used in Logistics are credited when necessary. Attributed Shutterstock. use of copyrighted images with permission. All images not credited courtesy
SUBSCRIBE
subscriptions@bncpublishing.net SUBSCRIBE subscriptions@bncpublishing.net
PO Box 502511 Dubai, United Arab Emirates P +971 4 4200 506 | F +971 4 4200 196 PO Box 502511 Dubai, United Arab Emirates P +971 4 4200 506 | F +971 4 4200 196 For all commercial enquiries, contact jo@bncpublishing.net T +971 50 440 2706 For all commercial enquiries, contact jo@bncpublishing.net All rights reserved © 2023. T +971 50 440 2706
Opinions expressed are solely those of the contributors. rights reserved © 2023. in the MENA region are Logistics News ME and All all subsidiary publications Opinions are those of the officially licensedexpressed exclusively tosolely BNC Publishing incontributors. the MENA region by Logistics News ME and all subsidiary publications in the MENA region are Logistics News ME. officially licensed exclusively to BNC Publishing in the MENA region byor No part of this magazine may be reproduced or transmitted in any form Logistics ME. by any means without writtenNews permission of the publisher. No part of this magazine may be reproduced or transmitted in any form or by anyPrinted meansby without writtenand permission publisher. United Printing Publishingof| the upp.ae Printed by United Printing and Publishing | upp.ae
Shutterstock.
ACCESS FRESH CONTENT DAILY ON OUR WEBSITE!
cbnme.com
6 | LOGISTICS NEWS ME | FEBRUARY 2024 6 | LOGISTICS NEWS ME | JULY 2023
Logistics News ME Logistics News ME In addition to our print edition, we’re bringing you allbringing sorts ofyou industry news on our web we’re all sorts @Logisticsnewsme mediums. forward to interacting @Logisticsnewsme of industryWe’re newslooking on our web with our readers on all offorward our social media and mediums. We’re looking Logistics News ME web platforms. Seeour youreaders on the on web! Logistics News ME to interacting with all of our social media and web logistcsnewsme platforms. See you on the web!
WWW.CBNME.COM WWW.CBNME.COM
LNME
EDITOR’S NOTE
Time Management That's not to say that real-world situations aren't taken into account or treated with empathy, but it's important to remember that we work with multiple clients at once, and if one of them has deadlines, they count on me to meet mine by providing content on time. However, that does have several limitations. Another further concerning parameter is that individuals may try to take advantage of us because we may know them well or are friendly, but unless otherwise, there will be no delay but for a reasonable reason. So why am I expected to, then? Interestingly, any delay forces me to reorganise my workflow, which utterly throws off my ability to manage my time while delivering the work across platforms. Additionally, one can do this when they space out their work with their events, interviews, work trips, and work commitments. So, cheers to those who genuinely value time and time management! On a side note, we are coming to Riyadh next month with our annual KSA Logistics & Transport Awards 2024 on March 4, 2024, at Voco Riyadh. If you still need to nominate, rush fast to do so.
T
ime management is crucial in the industry we work in, and I have realised that much. When I mention that it's vital that I manage my workflow, I also mean that it's essential that those with whom we collaborate meet specific deadlines and requirements.
8 | LOGISTICS NEWS ME | FEBRUARY 2024
Vibha Mehta
Vibha Mehta
Editor-in-Chief vibha@bncpublishing.net
vibhamehta01 @vibhamehta01
WWW.CBNME.COM
The Arocs. Your Reliable Partner for Every Construction Transportation Task. Regardless of whether it is a rigid chassis, concrete mixer or heavy-duty tipper: The Mercedes-Benz Arocs provides an especially robust, resilient vehicle that is optimally prepared for use for any construction haulage challenge. Configure it now to suit your requirements and those of your project.
SAVE UP TO 25%
Until 29 March 2024
BOOK ON FAIRMONT.COM
LNME
REGIONAL NEWS
AN AGREEMENT IS SIGNED BY ETIHAD CARGO, ABU DHABI AIRPORTS, AND ABU DHABI FOOD HUB TO EXPAND AND DIVERSIFY THE FOOD TRADE
A
bu Dhabi, United Arab Emirates: 23 January, 2024: Etihad Cargo, the cargo and logistics arm of Etihad Airways, Abu Dhabi Airports, a vital enabler of the emirate’s aviation sector, and Abu Dhabi Food Hub – KEZAD, the region’s most prominent and first dedicated food wholesale market and logistic hub, have signed a tri-party memorandum of understanding (MoU) to jointly establish a fully compliant and transparent origin-to-destination perishable air corridor known as the ‘Fresh Corridor 2.0’. The initiative will support the diversification of food sources, the development of new trade corridors, and the enhancement of the choice and variety of products available for regional consumers. This MoU sets a framework for Abu Dhabi’s food trade enablers to position the UAE as a key node in global food supply chains. The partners aim to establish a robust
ecosystem for food trading and investment, including advanced infrastructure, access to regional consumer markets, and reliable logistics and connectivity worldwide. The agreement strengthens the integrated offering of Abu Dhabi through collaborative efforts by the three parties that involve an exchange of knowledge and expertise in handling, storage and logistics, food safety, and hygiene as part of the trading process. Furthermore, the partnership is dedicated to addressing the evolving demands of the food trade by liaising with government stakeholders, relevant facilitators, and key contributors from the food ecosystem,
12 | LOGISTICS NEWS ME | FEBRUARY 2024
thus ensuring a seamless transaction. Antonoaldo Neves, Chief Executive Officer, Etihad Airways, said: “Etihad Cargo is committed to the UAE’s National Food Security Strategy 2051 and is proud to be an active partner in the launch of the region’s largest food wholesale market – Abu Dhabi Food Hub at KEZAD. Etihad Cargo customers will benefit from the expanded infrastructure as a strategic hub in the Middle East to the rest of the world.” Elena Sorlini, Managing Director and Interim CEO of Abu Dhabi Airports said: “Our collective proposition to facilitate trade in and out of the UAE will further support the commercial development of the emirate as a global food centre. We are delighted to participate in this MoU along with Etihad Cargo and Abu Dhabi Food Hub. The launch of the Fresh Corridor 2.0 will encourage 2-way food trade between the UAE and the rest of the world, bringing food products into the UAE but also taking our “Made in the UAE” products to the world in a bold step towards diversification and growth of imports and exports”. Suresh Vaidhyanathan, Chief Executive Officer of Abu Dhabi Food Hub, said: “This agreement is a testimony of our commitment to developing and operating the food hub as one of the finest food wholesale markets globally. This collaboration will enhance our multi-modal capabilities as we seek to position the UAE as a regional food value chain leader. We are excited to support the global food players in accessing the regional consumer markets with integrated supply chain solutions, incorporating the most recent technologies, and further being a key enabler in food trade diversification and UAE’s Food Security Agenda. Our vision is to create an unparalleled ecosystem of sellers and buyers worldwide.” This partnership aims to set new standards in commercial and operational excellence within the global food trade. It seeks to offer solutions that meet the industry’s demands and effectively manage the worldwide supply chain and logistics.
WWW.CBNME.COM
REGIONAL NEWS
ALDAR COMMITS AED 1 BILLION TO ADDITIONAL EXPANSION TO UAE’S LOGISTICS REAL ESTATE BUSINESS
Properties, said: “Asset and geographic diversification are core tenets of our growth strategy, and logistics is becoming an important asset class for Aldar. We are experiencing particularly strong demand for high-grade facilities in the UAE, driven by robust intra-regional trade, high-quality infrastructure, and an expanding digital economy. Aldar is well positioned to capitalise on this growth, deploying a unique blend of expertise in development, balance sheet investment, and asset management to create substantial value.”
A
ldar Properties, the leading real estate developer, investor, and asset manager in the UAE, is investing a further AED 1 billion to expand its logistics real estate business in Dubai and Abu Dhabi. Having first entered the logistics sector with the majority acquisition of Abu Dhabi Business Hub (ADBH) in 2022, this new investment includes the acquisition of operational assets as well as the development of ready-to-lease and build-to-suit options in response to strong demand for Grade A logistics facilities.
Growth of the UAE’s logistics sector is supported by substantial investment into transportation and infrastructure, to support diversification of the economy. Aldar is experiencing strong demand to develop a range of logistics facilities, including supply chain and fulfilment warehouses to last-mile centres, in the form of single tenanted facilities and larger scale logistics parks. Tenants are in a wide range of sectors, primarily focusing on third-party logistics (3PL), e-Commerce and retail.
Marking its first logistics acquisition in Dubai, Aldar has bought 7 Central logistics hub and an adjacent plot which once developed will almost double the current gross leasable area (GLA) of 19,000 sqm. The facility, which was sold by Seven Seas Steel Industries LLC, is strategically positioned in one of Dubai’s most established industrial areas, Dubai Investments Park. The company has also created a healthy development pipeline and will build 233,000 sqm of new Grade A logistics facilities across the UAE. This includes single tenanted facilities and logistics parks in Dubai, totalling 200,000 sqm of GLA that will be developed in partnership with established logistics real estate players, and a 33,000 sqm GLA expansion of the company’s premium logistics facility, ADBH in Abu Dhabi. The ADBH warehouse portfolio is fully leased at its current capacity of 132,000 sqm to diverse institutional tenants, including Etihad, Mubadala and Twofour54.
TALAL AL DHIYEBI, Group Chief Executive Officer, Aldar Properties
Talal Al Dhiyebi, Group Chief Executive Officer of Aldar
LOGISTICS NEWS ME | FEBRUARY 2024 | 13
LNME
REGIONAL NEWS
ACQUISITION: DHL GLOBAL FORWARDING COMPLETES TAKING OVER OF DANZAS AEI EMIRATES
D
HL Global Forwarding, the freight specialist arm of the DHL Group, has acquired shares in the Danzas AEI Emirates, with all facilities now rebranded to DHL. The complete integration not only brings a transformation in logo and name but also enhances operational capabilities with the transfer of 1,100 logistics experts and ownership of over 20 facilities. This will result in more efficient and seamless logistics services for customers in the UAE, GCC, and MEA (Middle East and Africa) region. With this integration, DHL Global Forwarding solidifies its position as a market leader in freight forwarding and logistics in Dubai, further accelerating the growth of the logistics business in the MEA region. In 2022, DHL Group generated a revenue of €4,161 million in the region. Amadou Diallo, CEO of DHL Global Forwarding Middle East and Africa, said: “Our integration with Danzas AEI Emirates paves the way for strengthened logistics operations in the GCC and MEA. We are proud to carry the Danzas lineage forward and build on its distinction as the leading logistics provider in
14 | LOGISTICS NEWS ME | FEBRUARY 2024
Dubai and the Northern Emirates. This acquisition will allow us to marry the best of both worlds – DHL’s global expertise with Danzas’s local heritage to foster innovation and sustainability and create value for our customers, employees, and stakeholders. He added: “DHL Global Forwarding has revolutionized the world of logistics through customer-centricity and excellence, and our integration with Danzas will enable us to expand our reach and support the growth of the logistics business in the GCC while enhancing regional competitiveness as an economic hub.” Since its establishment in 1995 as a joint venture between Al Tayer Group and DHL Global Forwarding, Danzas AEI Emirates has played a vital role in developing the region as a global logistics hub. Following the integration, DHL Global Forwarding will own and operate over 20 Danzas’ state-of-the-art facilities across Dubai and the Northern Emirates, with key sites in Jebel Ali Freezone, Dubai World Central (Al Maktoum International Airport), and Dubai Airport Free Zone, including the latest station based in Ras Al Khaimah.
WWW.CBNME.COM
REGIONAL NEWS
FRONT END ANNOUNCES EXCLUSIVE COLLABORATION WITH CRANE+ AT THE 2024 FUTURE MINERALS FORUM
D
Front End Limited Company, a Saudi-owned enterprise that provides advanced products and solutions to the energy, mining, industrial, maritime and logistics sectors, has announced the signing of an exclusive partnership agreement with Crane+ at the Future Minerals Forum in the Kingdom’s capital. This partnership marks a significant shift in the energy and mining sectors in Saudi Arabia and the wider region, indicating a pivotal moment for industry innovation and collaboration. The agreement formalizes Front End’s exclusive role as the primary collaborator for Crane+’s cuttingedge products and services within the dynamic landscape of Saudi Arabia, namely proposing the transformation of industrial and mining and oil and gas operations by incorporating the use of autonomous high payload, long-range drones and trucks. Front End’s growing ecosystem of partner companies demonstrates their commitment to innovation, with this one, in
particular, paving the way towards a promising logistics and critical operations future through the development of next-generation autonomous systems. The partnership aligns with the National Industrial Development and Logistics Program (NIDLP) under Saudi Vision 2030 to position the Kingdom as a leading industrial power and a central global logistics hub. This alignment signifies a significant leap forward in the progression of the mineral-mining industry. The agreement by Front End was one of two that were announced on the second day of the FMF 2024 in Riyadh. Majid Alghaslan, Chairman and CEO of Front End Limited Company, commented, “In announcing our exclusive partnership with Crane+, Front End is reinforcing its key transformational role in the Kingdom and pioneering the autonomy economy. This collaboration marks a significant step in revolutionizing mining, oil
and gas, and logistics sectors with autonomous drones and trucks, aligning with the National Industrial Development and Logistics Program (NIDLP) and Saudi Vision 2030. We aim to make autonomous technology the core of industrial operations, setting new efficiency, safety, and sustainability standards. As we lead this transformative journey, we are not just introducing advanced technology but at the forefront of the global autonomy economy, driving innovation and excellence.” A spokesperson from Crane+ said, “Celebrating our exclusive partnership with Front End at the Future Minerals Forum 2024 marks a significant milestone for Crane+. This collaboration with Front End, a leader in providing advanced energy, mining, industrial and logistics solutions, signifies our shared commitment to excellence, innovation, and transformative advancements. We aim to redefine the landscape of mining and oil and gas operations in Saudi Arabia and the wider region, leveraging cuttingedge autonomous technologies.”
LOGISTICS NEWS ME | FEBRUARY 2024 | 15
LNME
AGREEMENT
DP WORLD AND GUJARAT STATE SIGN AGREEMENTS TO IMPROVE INDIA’S LOGISTICS DP World will build Gati Shakti Cargo Terminals (GCT), SEZs, multipurpose deep-draft ports, and container terminals in Gujarat
16 | LOGISTICS NEWS ME | FEBRUARY 2024
WWW.CBNME.COM
DP WORLD AND GUJARAT STATE SIGN AGREEMENTS TO IMPROVE INDIA’S LOGISTICS
D
P World has signed multiple Memorandums of Understanding (MoUs) worth INR 250 billion (approx. US$3 billion) with the Government of Gujarat, covering the development of new ports, terminals, and economic zones, strengthening its commitment to supporting trade in a growing Indian state. In the presence of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of UAE, and Narendra Modi, Prime Minister of India, DP World Group Chairman and CEO, Sultan Ahmed bin Sulayem, exchanged MoUs around potential investments in Gujarat with Mr M K Das, Additional Chief Secretary, Government of Gujarat, during the Vibrant Gujarat Global Summit 2024 being held in Gandhinagar during January 2024. The MoUs highlight Gujarat’s prowess as a role model of development and the nation’s growth engine while leveraging its logistics and maritime infrastructure. The MoUs underscore DP World’s commitment to facilitating trade in Gujarat by developing the following: • Multi-purpose deep-draft ports in South Gujarat and around the western coast of Gujarat towards Kutch, • Special Economic Zones in Jamnagar and Kutch, • Gati Shakti Cargo Terminals (GCT) and Private Freight Stations at Dahej, Vadodara, Rajkot, Bedi and Morbi DP World has also signed an MoU with the Gujarat Maritime Board to jointly identify opportunities to develop additional ports along the coast of Gujarat. Commenting on the signing of the MoUs, Sultan Ahmed bin Sulayem, Chairman and CEO of DP World Group, said: “We are very committed to India, where we have been operating
for nearly 20 years. In that time, we invested almost $2.5 billion and will invest more in these projects in the next 3 years. The government policies and our experience here give us the confidence to do even more in India. We have been present in Gujarat since 2003 and are proud to have been part of the state’s growth story. We are honoured to continue our partnership in the state by committing to strengthening its logistics and maritime infrastructure to further enable trade in Gujarat.” DP World’s investments in Gujarat include a container terminal in Mundra, along with rail-connected private freight terminals at Ahmedabad and Hazira. This is complemented by cold storage facilities in Surat and Bharuch, freight forwarding offices in Ahmedabad and Gandhidham, and express cargo services across the state. Additionally, DP World ensures global connectivity for businesses in the region by running weekly coastal services via DP World’s Unifeeder Group, linking Mundra, Kandla, and Hazira ports to several international ports. The company recently launched a firstof-its-kind dedicated scheduled Rail Freight Service, ‘SARAL’, connecting traders from south Gujarat, such as Surat, Vapi, Valsad Vadodara, Bharuch, Ankleshwar to the markets in and around North Capital Region (NCR). On 25 August 2023, DP World signed a $510 million concession agreement with the Deendayal Port Authority to develop, operate and maintain a new 2.19 million TEU per year mega-container terminal at Tuna-Tekra in Kandla. On commencement, this greenfield terminal will have state-of-the-art equipment and a 1,100 m berth capable of handling nextgeneration vessels carrying more than 18,000 TEUs.
LOGISTICS NEWS ME | FEBRUARY 2024 | 17
LNME
ANALYSIS
UNIVERSE OF
WAREHOUSE Why do international warehouse automation vendors fail in China?
I
rene Zhang, Senior Analyst – Interact Analysis, joined Interact Analysis in 2022 as one of the warehouse automation industry analysts. She has seven years of experience in industry research and international M&A. Before joining Interact Analysis, Irene worked for a PE firm focusing on investing in global semiconductor companies. She holds a master’s degree in applied economics. Irene is based in the UK office.
Given that China is forecast to account for the most significant revenue growth between 2022 and 2027, it’s more important than ever for automation vendors to understand the market as a whole. Within this insight, we’ll explore why
18 | LOGISTICS NEWS ME | FEBRUARY 2024
international vendors have often failed in China, followed by the four key factors driving the Chinese warehouse automation market. Why do international warehouse automation vendors fail in China? When it comes to China, the elephant in the room is pricing. International warehouse automation vendors are often far more costly than local domestic vendors. However, the answer is a little more nuanced than just cost.
WWW.CBNME.COM
Originally written by Irene Zhang. Edited by Vibha Mehta
The majority of Western warehouse automation vendors that have entered the Chinese market haven’t been successful, and several factors contribute to this failure. Between 2018 and 2022, the share of China’s warehouse automation revenues generated by non-domestic system integrators declined from 40% to 19%. One of the main reasons for this is that international vendors often don’t have a detailed and nuanced understanding of the market structure and the factors driving its growth.
UNIVERSE OF WAREHOUSE
There are several additional factors which result in international warehouse automation vendors struggling in China: • Industry Definitions: In many cases, the Chinese warehouse automation market uses different terminology for equipment and solutions. • Government Subsidies: Many domestic vendors make use of lucrative government subsidies. However, as discussed later, these subsidies aren’t restricted to domestic vendors. • The shift towards mobile automation: While many international warehouse automation vendors focus on fixed automation, we see far greater demand for mobile automation solutions, which domestic vendors often supply. Unpacking the nuances – 4 key factors driving the market To gain a more holistic understanding of the Chinese warehouse automation market, the first thing to understand is what’s driving demand. In most developed countries, the growth of warehouse automation is primarily driven by two key factors: rising labour costs and the expanding e-commerce market. This is partially true for China, although our research often highlights additional elements specific to the country. While labour costs in China have increased in recent years, abundant labour supply in the Chinese market has offset the impact. Based on our research involving 68 warehouse automation suppliers in China and 50 automation end customers, we have identified four key factors driving the development of warehouse automation in China: 1. First and foremost, the significant growth of e-commerce has dramatically accelerated investment in warehouse automation. This expansion is not limited to e-commerce giants
like Taobao, JD.com, and Vipshop, as delivery companies have also made substantial investments in warehouse automation over the past five years. Chinese warehouse automation suppliers such as Wayzim and China Post Technology have experienced rapid growth during this period. 2. The swift development of the new energy industry has also led to significant investments in warehouse automation. Our research shows that warehouse automation investments in the segment have witnessed remarkable growth over the past five years, recording a compound annual growth rate (CAGR) of 22.5%. In 2022, China accounted for over half the global market share of power battery production capacity, with six of the top 10 power battery manufacturers worldwide based in China (Interact Analysis: Li-Ion Battery and Manufacturing Equipment Market Tracker). New energy clients such as BYD and CATL invest heavily in their warehouses. 3. Further localizing the local supply chain allows local Chinese suppliers to lower product prices. On the one hand, this increases the market competitiveness of local companies’ products, and on the other hand, it stimulates customer demand and accelerates the adoption of automation in China. Our research shows that an increasing number of core supply
parts, such as sensors and PLCs, are partly produced locally, and this has led to a reduction in equipment prices, making Chinese customers realize a return on investment in a shorter time. 4. Lastly, Government subsidies have played a role in supporting industry growth. Our analysis found that, on average, 20% of the net profits of domestic vendors came from government subsidies in 2022. The Chinese government’s focus on developing the warehouse automation industry has significantly impacted. Notably, the companies studied were Chinese suppliers, but insights from local experts suggest that international companies operating in China can also access comparable government subsidies on an equal basis. This implies that both domestic and international warehouse automation suppliers in China have the potential to receive government support in the form of grants. Our recently published report on the Chinese warehouse automation market provides a plethora of information and actionable and strategic recommendations for international vendors looking to enter the market. These recommendations range from using local definitions and terminology to focusing on verticals with the least competition from domestic vendors (which we explore in more detail).
LOGISTICS NEWS ME | FEBRUARY 2024 | 19
LNME
TALKING POINT
#2024 SUPPLY CHAIN TRENDS Advancing Automation And Resilience In MENA’s Logistics Sector
T
he core issues facing supply chains in 2023— labour, capacity, and resiliency—aren’t going away in 2024. However, how supply chain leaders address these challenges continues to evolve. The logistics and warehouse automation sector in the MENA region is in a transformational phase, with market estimates projecting a value of $1.6 billion by 2025. Rami Younes, General Manager at Swisslog Middle East, sheds light on some of the most exciting trends to look forward to this year.
RAMI YOUNES, General Manager Swisslog Middle East
Removing Barriers to Automation Smaller and more emerging organisations face the same labour, efficiency, and speed challenges as their larger competitors. Yet, they often need more resources to address these challenges through capital-intensive automation projects, putting them at a competitive disadvantage. In the MENA region, warehouses must keep up with the e-commerce market’s meteoric rise, projected to reach $57 billion by 2026, while remaining cost-effective. In 2024, warehouse operations are adapting to rising customer demands for diverse, fresh, and rapidly delivered goods by
20 | LOGISTICS NEWS ME | FEBRUARY 2024
WWW.CBNME.COM
O r i g i n a l l y w r i t t e n b y R a m i Yo u n e s . Edited by Vibha Mehta.
Moving into the new year, we see organisations finding new ways around barriers to automation, increasing their investments in established technologies, and seeking new levels of efficiency and productivity through supply chain orchestration and artificial intelligence. A closer analysis reveals several noteworthy trends anticipated to shape the landscape in the coming months.
#2024 SUPPLY CHAIN TRENDS
increasingly using robotic arms for carton handling and item-picking tasks. The shift towards next-hour delivery expectations drives the adoption of flexible infrastructure technologies like mobile robotics and automated guided vehicles (AGVs), crucial for levelling the playing field in this dynamic environment. Re-Shoring Refocuses Supply Chains on Pallet Handling After years of industry focus on automating each picking to support growing e-commerce and omnichannel distribution, pallet handling systems will recapture their share of the spotlight in 2024. That’s partly due to the continued momentum around re-shoring, in which manufacturers are re-centring their supply chain to improve resiliency. This is driving the development of high-bay warehouses that support the distribution of palletised products, and that will result in increased investment in pallet handling technologies, particularly crane-based Automated Storage and Retrieval Systems (ASRS). Solutions based on technologies like the Swisslog Vectura crane maximise space utilisation in highbay warehouses and deliver proven reliability over decades of service.
Supply chains already dependent on crane-based ASRS will extend the value of these solutions by investing in lifecycle services that ensure reliability and enable adaptability. AI Expands Beyond Machines Over recent years, machine learning, a subset of AI, has significantly advanced technologies like robotic item picking. The Middle East is known as a futuredriven region and is projected to gain 2% of global AI benefits, amounting to $320 billion. The latest breakthrough in Generative AI fuels self-learning mechanisms in warehouse automation. Initially, automation vendors will likely apply generative AI to their training libraries to streamline custom training development for their customers. These systems gain experience, recognise patterns, anticipate scenarios, and independently enhance knowledge, optimising performance and improving human-machine interactions. An even higher value will be realised as AI works with warehouse software systems to derive insights from the data-rich warehouse environment. Forecasting, slotting, and sequencing processes all stand to benefit. Warehouse sustainability The Middle East is seeing an increased
demand for eco-friendly logistics, aligned with KSA’s Vision 2030 and UAE’s Net-Zero initiatives to reduce carbon emissions. Electric automation technologies, like robotics, are energy-efficient, using as little as 0.1 kW per hour, and can be powered by renewable sources. Swisslog has set a precedent by implementing the first 100% solar-powered warehouse automation system, showcasing the potential for these systems to run on on-site renewable energy. Software Takes Centre Stage As operators increasingly seek to orchestrate people, processes, and technology within the warehouse, their ability to execute this strategy depends on the software that controls their automation systems. Warehouse Management System (WMS) platforms aren’t well positioned to address orchestration challenges as they lack the machine-level view of operations required. That puts the onus on automation integrators to deliver software solutions capable of capturing data at the machine level while providing a holistic view of warehouse operations. Software platforms that provide real-time visibility into the logical and operational level will become even more valuable as AI enables more accurate forecasts and resources can be aligned to execute those forecasts efficiently. Software, more than hardware, then becomes the critical enabler of successful automation, and operators will increasingly seek out solutions with Warehouse Execution Systems (WES), Automation Control Systems (ACS) and WMS functionality integrated with a standard modular platform with a common toolset. In 2024, warehouse automation will have immense potential as the sector taps into innovating with AI, sustainable solutions, and digital integration, tackling key challenges and driving a shift towards more innovative, ecofriendly, and interconnected supply chain systems.
LOGISTICS NEWS ME | FEBRUARY 2024 | 21
LNME
VISION 2030
SAUDI ARABIA’ S DIGITAL PILLAR Technology will be vital to realising the Kingdom’s Vision 2030 ambitions of becoming a world-leading logistics powerhouse.
S
audi Arabia’s Vision 2030 programme seeks to transform the Kingdom into a global logistics powerhouse as it seeks to diversify its economy away from oil. The country aims to maximise the geographical advantage of its strategic position connecting Asia, Europe and Africa and provide cost-effective, transparent, and agile logistics services to streamline operations. In part, those ambitions will be reached through bold infrastructure projects, such as upgrading existing ports and terminals and developing new ones, to quadruple its annual container throughput to 40 million TEU by 2030. Saudi Arabia has also set its sights on enhancing the number and quality of its logistics zones and modern warehouses to meet the growing supply chain demands and boost its international trade credentials.
KUMAR GANESAN, Managing Director, GAC Saudi Arabia
22 | LOGISTICS NEWS ME | FEBRUARY 2024
But, while infrastructure is vital, implementing suitable technology will be just as crucial if Saudi Arabia is to realise its vision. “Logistics in 2024 will be defined by data, diversity, collaboration, and transparency,” says Kumar Ganesan, Managing Director of GAC Saudi Arabia. “To reap the benefits, technology will play an even greater role in the sector, not just in Saudi Arabia but across the entire region.”
WWW.CBNME.COM
SAUDI ARABIA’S DIGITAL PILLAR
“This is where digitalisation comes in. Data analytics tools can offer insights into supply chain performance, identify areas for improvement and optimise data-driven decisions.” With Saudi Arabia’s rising prominence in the global logistics market, operators in the Kingdom who are not adapting their workflows and processes accordingly risk becoming irrelevant and losing out to more forward-thinking competitors.
With its head office in Dammam, GAC Saudi Arabia has a network of operational bases at critical ports across the Kingdom, offering industryleading shipping, logistics and marine services, mainly focusing on the energy, project and offshore sectors. As part of the GAC Group’s global network, it taps into the Group’s freight tracking system and digital solutions to improve operational effectiveness for shore-based logistics, freight forwarding, offshore supply support and more.
part in its Vision 2030 logistics sector: “The integration of real-time tracking systems and so-called ‘Internet of Things’ systems to facilitate better traceability and real-time decision making are now ‘must haves’ for any logistics provider looking to make their mark in Saudi Arabia’s developing logistics sector. Further, growing adoption of Blockchain technology to boost security and trust in logistics processes, particularly for supply chain management, will take those operating in the Kingdom to the next level.”
As Kumar explains, these solutions are vital for logistics providers operating in Saudi Arabia if they are to play a
Digitalisation and adaptability Saudi Arabia has long touted the use of automation, artificial intelligence, robotics and more as a means to allow faster and more efficient connections within the supply chain while also improving the security, transparency, control and efficiency of its importexport process. The rise of digital strategies is a natural evolution of the logistics sector. “The last few years have shown the importance of supply chain resilience and the need for logistics providers to assess and monitor their performance to mitigate any potential risks,” Kumar adds.
Kumar cautions: “End-to-end logistics is complex with multiple aspects and parties involved, especially for projects. The digital transition is a step-bystep process, just like any business change. We need to think about humans and machines in tandem, considering change management and the psychology behind how to make people adapt. There’s little value if we provide a digital tool without considering the human element.” Long-term resilience As Saudi Arabia looks to build its logistics sector as part of Vision 2030, digital solutions will add long-term resilience to supply chains facing geopolitical and inflationary headwinds. “Collaboration and transparency between partners go a long way to promoting a more interconnected and complex supply chain landscape by sharing data and information, building trust and improving endto-end supply chain coordination,” says Kumar. “Building supply chain resilience requires all stakeholders to take ownership of their role and work together to realise and implement improvement methods. This is a core value for us at GAC as we realise there is no room for complacency. The minute we start to feel comfortable, we need to examine what we are doing and how we can build upon or improve that for the benefit of our customers.”
LOGISTICS NEWS ME | FEBRUARY 2024 | 23
LNME
MOBILITY
ECO WAY: REVOLUTIONIZING URBAN MOBILITY
A Fusion of Innovation and Sustainable Transportation in the Heart of Dubai
E
CO WAY is redefining sustainability in Dubai’s urban landscape by introducing CO2-free deliveries. Entrepreneurs such as Ivan Kroshny are revolutionising entire industries with an eco-conscious focus in Dubai, the centre of global innovation. Ivan Kroshny, the founder of Eco Way, aims to spearhead the delivery of environmentally friendly products in line with Dubai’s objective of having zero emissions by 2050. Fueled by CATL NCM lithium batteries, Eco Way’s e-bikes make a positive environmental impact while withstanding Dubai’s harsh weather. “Petrol bikes contribute greatly to air pollution in urban areas,” says Kroshny, underscoring the need for a sustainable solution to motorbikes. Eco Way’s e-bikes stand out for having an exceptional range - they can travel 120–
24 | LOGISTICS NEWS ME | FEBRUARY 2024
130 km on a single charge at 110 km/h speed. The Eco Way outperforms other models on the market, whose bike speeds usually peak at about 50 km/h. This outstanding performance is paired with an innovative charging system. Correspondingly, “Diversification in the world of eco-motorcycles will help accelerate this growth due to Dubai’s active environmental agenda,” Kroshny underlines the importance of diversification in this industry. With the local market’s support, we are happy to move in this direction, where competition will help us grow more quickly. “We are glad that the local market supports us,” Kroshny continues, expressing gratitude for the support from the community. The positive reaction confirms our dedication to supporting Dubai’s sustainability objectives. With its headquarters in Dubai, Eco Way plans to
IVAN KROSHNY, Founder of Eco Way
produce 30,000 electric bikes yearly to replace the same number of motorcycles with gasoline engines. A small motorbike’s CO2 emissions, when driven 100 kilometres, come to an astounding 8.3 kg CO2e. Similarly, the CO2 emissions on a big motorbike would rise even higher to about 13 kg of CO2e. However, it’s crucial to remember that data shows that, on average, electric scooters emit just 0.1 tonnes of CO2 per year. Thus, the switch to 30,000 electric scooters would only produce 3,000 tonnes of CO2 in total yearly emissions, representing a significant 117,000 tonnes reduction in Dubai’s CO2 emissions. Although motorcycles generally produce less carbon dioxide than cars, they release more nitrogen oxides and hydrocarbons, among other pollutants. These substances are harmful to the air quality and the climate.
WWW.CBNME.COM
ECO WAY: REVOLUTIONIZING URBAN MOBILITY
e-commerce and online shopping grow. For last-mile deliveries, e-bikes are a cost-effective and environmentally responsible option, particularly in cities where traffic congestion is a significant issue.
Equipped with GPS tracking, nanorivet technology, and easily replaceable batteries, their innovative e-bikes offer a cleaner and more efficient delivery solution.
expansion. The UAE government is promoting using electric vehicles (EVs) as part of its initiatives to lower carbon dioxide emissions and build a more sustainable future.
Eleven per cent of global pollution is caused by urban transportation. It is important to note that these pollutants severely negatively impact health because they significantly contribute to PAH (Pulmonary Arterial Hypertension). This condition results in dangerous side effects in addition to abnormally high blood pressure in the lungs. Thus, the project will support the UAE’s citizens in maintaining their current health and vitality and raising even healthier future generations.
The increasing need for ‘last mile’ delivery services is one of the main drivers of the growth of the electric bike market in the United Arab Emirates. Delivery businesses are searching for quicker and more effective ways to deliver packages to clients as
A few businesses in the UAE have started offering e-bike delivery services; one such business is Fetchr, which presently delivers short deliveries in Dubai using a fleet of e-bikes. In addition to Amazon, Talabat, Hero, Deliveroo, and Emirates Post Group, several other businesses have indicated interest in partnering with Eco Way and utilising e-bikes for delivery services. In response to a question regarding the significance of using creativity and innovation to combat climate change, Kroshny emphasises the value of cooperation and states, “Climate change is everyone’s fight.” We have a better chance of giving the next generation clean, fresh air if we collaborate more with these large restaurants and delivery services.
Additionally, since electric bikes move more silently than petrol bikes, switching to eco-bikes will lower noise levels. 13 stations, each capable of holding twelve batteries, have been installed, and forty-five electric bikes are currently undergoing testing on public roads. By 2050, the UAE government wants to be carbon neutral. Consequently, the company’s job is to do everything possible to help carry out this plan. Although the e-bike industry in the United Arab Emirates is still in its infancy, there is much room for
LOGISTICS NEWS ME | FEBRUARY 2024 | 25
REVOLUTIONIZING THE INDUSTRY
REVOLUTIONIZING THE INDUSTRY
Vibha Mehta and Jacques Adem, Co-Founder & Managing Director at LogSquare, discuss everything about LogSquare and how the industry is shaping…
Introduction A few years ago, Jacques began his academic career in engineering and earned a master’s degree in engineering management before joining the family business as a ship owner. A fleet of cargo ships that they once owned and managed and was under their control. “Thus, it also has
some relation to logistics. In 2003, I made a professional transfer to Dubai that turned out to be quite beneficial and began my first permanent job,” shares Jacques Adam, Co-Founder & Managing Director at LogSquare. This career also went beyond. In 2008, they decided to establish LogSquare. Since then, he set up an SME and
LOGISTICS NEWS ME | FEBRUARY 2024 | 27
LNME
INNOVATION
with their software solutions, or with their clients. “We are placing much emphasis on the lessons that COVID specifically taught us, which include the value of the supply chain and the significance of technology and digitization. We are modernising every technology, including our network, cloud service capabilities, and internal support services,” adds Jacques.
pursued engineering with a little bit of management. LogSquare On It’s Course LogSquare is an Intralogistics system integrator specialising in automated material handling and storage solutions. Their primary region of influence is MENA, with rare forays into Africa and India. They offer a wide range of options, including automated storage and retrieval, high-speed sorting, conveyance, and transportation. They undoubtedly have a speciality in what they refer to as engineering applications, as they can create their structures. One of these is the tallest rock-supported warehouse in the United Arab Emirates, visible when travelling across three levels. They also pick technology, focusing primarily on robotics, AMRs, and vision software for the last four to five years.
28 | LOGISTICS NEWS ME | FEBRUARY 2024
Digital Transformation The industry, by definition, includes a large portion of the digital realm. Thanks to advancements, the fields in which the sector is improving these days are the technological platforms they use at all levels, both upstream and downstream. Either in their supply chains,
Sustainability You see, everything begins with a vision. One can achieve their goal if they have the idea and the desire to get there. LogSquare has also done so with a modest sustainability experience. Jacques emphasises how they raised awareness and educated themselves on what constitutes sustainability and what aspects may be used for intralogistics. Coordinating with what they undertake, they
JACQUES ADAM, Co-Founder & Managing Director at LogSquare
WWW.CBNME.COM
REVOLUTIONIZING THE INDUSTRY
found many practices that one can participate in and lose out on. “Thus, we focus our efforts upstream, beginning with the products, materials, and emissions. We also regulate our technology providers and specify the practices that go into new technologies, even basic drives and motors that reduce power consumption and electricity packaging,” says Jacques. Moving on to the second phase, they must determine how to further this downstream, where they will undoubtedly need to rely on business partners with a more constrained reach. However, he is confident that some of these partners are ahead of them in the industry. And they will value any modest counsel or issue they bring up. Industry Focus They often work with various industries and markets as
system integrators. Recently, LogSquare has serviced food and beverage, automotive, FMCG, retail, and e-commerce companies, all of whom adhere to their philosophy of ‘integrity.’ “We, therefore, aim to achieve this. Working closely with our business partners, we develop solutions that meet their objectives and are unquestionably within our areas of specialisation. We also make sure that the solutions provide a fair return on investment and enhance the value of the business and its operations,” indicates Jacques. E-commerce Transparency Customer expectations have been the primary driver of LogSquare’s growth, particularly in the last three or four years, whether in the retail industry or the business-to-consumer (B2C) space. It is necessary to meet or exceed the expectations
of the client. As a result, technology investment is required of everybody. “We live in a region with a surplus of labour. It’s not lacking. It’s a sign of the company’s maturity and growth when you realise hiring many workers won’t accomplish the goal. The sequence is reversed. It all boils down to giving your core group and devoted workforce the tools they need to accomplish more, “ Jacques says. Automation is coming into play. Technology is present throughout the supply chain and is not restricted to the domain or spectrum that LogSquare serves. To complete the definition of fulfilment, a material or piece of information must be transferred digitally and quickly. As a result, they are all connected. Jacques strongly focuses on the need for transparency across the supply chain to try and meet the evertougher-to-meet client demands. Expansion Plans Without a doubt, as a learning organisation, they will keep expanding and adding new products and solutions to our lineup,” Jacques responds. “We’re working on many solutions in our test lab; we’re trying to promote them and see their viability.” They are also expanding geographically, particularly in Saudi Arabia. Their KSA setup is in progress, as COVID caused a delay. However, Jacques is anticipating making a big announcement soon.
LOGISTICS NEWS ME | FEBRUARY 2024 | 29
LNME
FREIGHT FORWARDING
SPEARHEADED AHEAD In conversation with Axel Herzhauser, who is appointed as the new Global Managing Director of WeFreight
I
n November last year, WeFreight named Axel Herzhauser its new Global Managing Director. Axel will be based in Dubai, United Arab Emirates. The skills required to advance WeFreight’s growth further as a provider of logistics and freight forwarding services are provided by Axel’s broad industry expertise and leadership talents. He will closely collaborate to fortify the WeFreight worldwide network and keep advancing the company’s dedication to excellence in all facets of operations.
30 | LOGISTICS NEWS ME | FEBRUARY 2024
Can you walk us through your experience in the industry so far? I have had extensive experience in the logistics and supply chain industry across diverse roles and regions. Before joining WeFreight, I was the Regional Managing Director for the Middle East and Africa at CEVA Logistics. I have also had stints at Ingram Micro and Teleplan. I deepened my expertise in logistics and transportation at DB Schenker, Exel/DHL and Logwin. My international experience across Europe, North America, Asia, and
the Middle East has broadened my horizons and given me a global perspective on logistics operations and market dynamics. How does it feel to take this new position at WeFreight? And what are your plans for the company? It’s a new challenge for me. I am happy to be part of a dynamic and innovative freight forwarding and logistics team. WeFreight has already established a strong presence, and I am honoured to lead its expansion and reinforce its market presence. My focus at WeFreight is to drive the business
WWW.CBNME.COM
SPEARHEADED AHEAD
to a new level, focus on business development and enhance operations and market strategy. We aim to enhance our global network, innovate in customer service and operational efficiency, and accelerate our international freight and logistics market growth. At the same time, we’ll remain dedicated to meeting our customers’ requirements and providing quality service. What are some of the services that WeFreight offer? WeFreight offers diverse logistics services, including ocean, air, and road freight, with options like full container, less-than-container, and full truckload. We specialise in customs clearance, cargo insurance, and handling special cargo such as reefer, hazardous, and oversized goods. WeFreight provides comprehensive
warehousing, project freight services, and tailored solutions for automotive, food, and industrial products. Our seaair cargo services and exclusive shipping and airline agreements ensure efficient and flexible logistics solutions. Our integrated single-solution approach sets us apart, capable of addressing all our customers’ logistics needs. Our global shared services infrastructure is a game-changer in this aspect. It’s like having an extensive, well-oiled machine that manages back-end operations, finance, documentation, and more – ready for you to ‘plug and play’. What are some of the biggest challenges and opportunities in the Middle East logistics market? In the Middle East logistics market, significant challenges include: • meeting the growing demand for timely and secure deliveries, • rising transportation and labour costs, • management of complex supply chains and • addressing a shortage of skilled labour.
AXEL HERZHAUSER, Managing Director, WeFreight
However, companies have promising opportunities to excel by embracing automation and digitalization to streamline operations, enhancing customer service to meet rising expectations, optimizing supply chains for efficiency, and adopting sustainable practices. In addition, the market for logistics services remains strong across much
of the Middle East, driven by growth and investment in Saudi Arabia. How do you differentiate yourself from your competitors in the region? We focus exclusively on serving emerging markets. Our services are personalised to meet our customers’ unique needs and demands. We have set ourselves apart by strongly emphasising digital innovation as our strategy. Our approach centres on integrating state-of-the-art technology into every aspect of our operations, streamlining processes and keeping us at the forefront of a rapidly evolving industry. Our use of CargoWise One, a leading-edge transportation management technology, is a significant differentiator. This platform grants our global network unparalleled visibility and seamless access to crucial shipment data, ensuring efficiency and transparency in our operations. What role do you see technology playing in the future of logistics? Technology is the cornerstone of the future of logistics. Integrating advanced technologies such as AI, IoT, and blockchain revolutionise supply chain management. AI and machine learning enable more accurate forecasting and better resource allocation, thus improving efficiency and reducing costs. IoT provides real-time tracking of shipments, enhancing transparency and enabling proactive management of potential delays or issues. Moreover, automation and robotics are streamlining warehouse operations, making them faster and reducing human error.
LOGISTICS NEWS ME | FEBRUARY 2024 | 31
LNME
LAUNCH
DHL SUPPLY CHAIN AND ARAMCO LAUNCH ASMO ASMO (Advanced Supply Management Operations) will be a new procurement and logistics services hub in Saudi Arabia
T
he world’s top integrated energy and chemical company, Aramco, and the world’s top contract logistics provider, DHL Supply Chain, have partnered to create ASMO (Advanced Supply Management Operations), a new hub for logistics and procurement services in Saudi Arabia. Mr. Salem Al Huraish, Chairman of ASMO, commented: “We have formed ASMO, with the vision to establish sustainable solutions for the modern supply chain challenges we all face. In forming this strategically powerful alliance, which harnesses Aramco’s energy ecosystem and DHL’s logistics expertise, we are intent on creating value by driving efficiencies and enhancing the reliability of supplies, making them less vulnerable to disruptions, while focusing on sustainability and lowering carbon emissions.” Mr. Wail Al Jaafari, Aramco Executive Vice President of Technical Services, said: “This is an exciting day for Aramco, for DHL, and for everyone working to build a brighter future for our region. We’re launching ASMO with an ambitious vision for it to become a market leader in Saudi Arabia and the wider MENA region offering world class, comprehensive, end-to-end supply chain services that would create value for its customers and enhance the resilience of their supply chain. ASMO will not only work on advancing the economic interests of Aramco and DHL, but it plans to also help accelerate growth across the industrial sector of Saudi Arabia and the MENA region, while supporting the Kingdom’s 2030 vision of becoming a global logistics hub.” 32 | LOGISTICS NEWS ME | FEBRUARY 2024
Mr. Oscar de Bok, DHL Supply Chain CEO, emphasized the transformative power of the joint venture: “By uniting the expertise of DHL Supply Chain and Aramco in this new joint venture we aim to break free from traditional procurement and logistics constraints, responding to the evolving dynamics of global supply chains. ASMO is the region’s first hub providing a comprehensive and integrated endto-end supply chain service offering for businesses in the energy, chemical and industrial sectors. ASMO plans to redefine the way these companies will procure, store and transport goods and services within, to and from Saudi Arabia and the wider MENA region, seeking to drive efficiencies, cost savings and economies of scale.” ASMO is envisioned to meet the growing demand for more sustainable and efficient supply chain services in Saudi Arabia, while at the same time reflecting the expanding market potential of the region as a global trade gateway for the energy, chemical, and industrial sectors. Digital technologies are fundamental to ASMO, which plans to integrate advancements in automation and collaborative robotics, Artificial Intelligence (AI), Data Analytics, and Blockchain. In a
world challenged by supply shortages, logistics disruptions, and rising costs, ASMO is poised to emerge as a regional supply chain hub, covering supply chain services from procurement to logistics, warehousing, and even a B2B e-marketplace for customers. Sustainability will be a core principle. The measures ASMO is implementing across supply chain operations seek to advance circular practices in the economy. ASMO aims to drive efficiencies across the supply chain while delivering savings, with its approach generating value to customers as well as Saudi Arabia. Combining Aramco’s procurement expertise and DHL’s supply chain potentially allows ASMO to offer the lowest cost of procurement, enabling growth for the energy, chemical and industrial sectors. It will connect suppliers and customers through its brokerage model, reducing the need for inventory holding and reducing costs. Delivering cost savings through optimized procurement, logistics, and inventory, ASMO aims to enhance service levels in procurement and supply chain management, allowing customers to focus on core business activities by alleviating operational burdens. WWW.CBNME.COM
2024 MARCH 4TH | VOCO, RIYADH |
RECOGNIZING INDIVIDUAL EXCELLENCE, CORPORATE STRENGTHS, AND PROJECT SUCCESS
FOR NOMINATIONS VIBHA MEHTA +971 58 6314145 vibha@bncpublishing.net Gold Partner
FOR SPONSORSHIP OPPORTUNITIES JOAQUIM D’COSTA +971 50 440 2706 jo@bncpublishing.net
LOGISTICS NEWS ME
@LOGISTICSNEWSME
LOGISTICS NEWS ME
WWW.CBNME.COM
LNME
COVER
LOGIPOINT PIONEERING THE FUTURE OF SAUDI ARABIA’S LOGISTICS INFRASTRUCTURE Navigating Challenges, Building Resilience, and Expanding Horizons
34 | LOGISTICS NEWS ME | FEBRUARY 2024
WWW.CBNME.COM
LOGIPOINT – PIONEERING THE FUTURE OF SAUDI ARABIA’S LOGISTICS INFRASTRUCTURE
T
he global logistics landscape has to evolve constantly and rapidly to keep pace with a seemingly constant stream of disruptions. Sometimes, these disruptions are anticipated and celebrated, like those which come from innovation and technological breakthroughs. At others, seismic shifts in geopolitical realities and unforeseen Black Swan events usher in disruptions that force businesses to rethink and reimagine their plans in real-time or risk being eliminated from the game. In the face of recent disruptions in the Red Sea, the Jeddah-based Logistics Real Estate Company LogiPoint has emerged as a crucial player in steering the Kingdom of Saudi Arabia’s logistics landscape towards a future marked by resilience, elasticity and sustainability. Navigating Troubled Waters: Adapting Swiftly to the Red Sea Crisis The Red Sea crisis, triggered by security concerns, sent shockwaves through the global shipping industry. LogiPoint responded with agility, actively collaborating with stakeholders and clients to introduce an alternative corridor, a bonded land bridge connecting the Eastern and Western shores for international shipments and help minimize disruptions. The company’s commitment to finding alternative solutions underscores its pivotal role in maintaining trade flow amidst challenging circumstances. It focuses yet again on the strategic importance that LogiPoint has gained in building an infrastructure of speed and resilience in the region. Unveiling LogiPoint: Transforming the Landscape of Logistics in Saudi Arabia In the rapidly transforming world of Middle East logistics, LogiPoint stands tall, redefining the narrative with a commitment to sustainability, resilience, and innovation. A trailblazer in the Kingdom’s logistics real estate sector, LogiPoint has been instrumental in shaping the logistics landscape of Saudi Arabia. In this exclusive cover story, we delve into the rich history, transformative initiatives, and forwardlooking ethos of LogiPoint, exploring the insights shared by its visionary CEO, Farooq Shaikh.
Pioneering a Legacy: LogiPoint’s Evolution and Milestones Established in 1999, LogiPoint emerged as one of Saudi Arabia’s first and largest Bonded and Re-Export Zones (BRZ). In its nascent years, the company faced the challenge of introducing a novel concept to an industry unfamiliar with the potential of bonded zones. Farooq Shaikh, the CEO of LogiPoint, reminisces, “We spent the first few years collaborating with regulatory bodies to design and implement innovative solutions, intuitive processes, and cutting-edge infrastructure that brought the benefits of a BRZ to our clients.” Over the years, LogiPoint’s persistence in building logistics infrastructure has yielded remarkable results. The BRZ has transformed into a multi-award-winning logistics centre within the Jeddah Islamic Port, serving a
LOGISTICS NEWS ME | FEBRUARY 2024 | 35
LNME
COVER
comprehensive training programs. By investing in internal and external training, including online courses from international trainers and platforms like LinkedIn and Coursera, LogiPoint ensures that its team remains at the forefront of industry trends and expertise. Safety First: Ensuring the Integrity of Operations and Workforce Well-being With a remarkable safety record of zero accidents in its logistics warehouses, LogiPoint prioritizes the well-being of its employees and the integrity of its operations. This commitment to safety not only safeguards the workforce but also enhances the reliability and trustworthiness of the company in the eyes of its clients.
"Inauguration of another state-of-the-art facility: Ushering in esteemed guests," says Ghazanfar Khan, CCO, LogiPoint
diverse clientele locally and internationally. This journey, marked by resilience and operational agility, has positioned LogiPoint as a critical player in the logistics real estate sector. Investing in Human Capital: Nurturing Expertise for Resilience LogiPoint’s success is intricately tied to its workforce, boasting a team of over 200 employees. The company pays a premium on continuous upskilling, as evident in its
36 | LOGISTICS NEWS ME | FEBRUARY 2024
Infrastructure Development: Building the Foundations for Tomorrow’s Logistics The jewel in LogiPoint’s crown for 2023 is the completion and inauguration of twin state-of-the-art warehousing facilities. Warehouse Village 5, a sprawling 35,000 SQM multi-purpose facility, sets new standards in handling temperaturecontrolled cargo, including a dedicated pharmaceutical zone—a first for the kingdom. Simultaneously, a 25,000 SQM Built-to-Suit facility was delivered to the renowned 3PL and express delivery company Aramex, solidifying LogiPoint’s strategic role in enabling its clients’ growth. Innovative Solutions and Expansion: Evolving to Meet Market Demands LogiPoint introduced Warehouse Village 5 to address the Saudi market’s need for a sophisticated bonded warehousing facility. Additionally, the company launched a new Value Added Services Facility, expanding its offerings and catering to previously untapped market segments. Geographically, LogiPoint expanded its footprint in the Central Western region of Saudi Arabia, with further expansion discussions underway.
WWW.CBNME.COM
LOGIPOINT – PIONEERING THE FUTURE OF SAUDI ARABIA’S LOGISTICS INFRASTRUCTURE
Notably, the company made significant inroads into the Pharmaceutical sector and the Cold Chain segment, leveraging the capabilities of Warehouse Village 5. Leadership Vision: Shaping the Future with Farooq Shaikh At the helm of LogiPoint is Farooq Shaikh, a 25-year industry veteran who has been the CEO at LogiPoint for over five years. Farooq’s visionary strategies, centring on customer satisfaction, employee development, and sustainable practices, have propelled LogiPoint to the forefront of the Saudi Arabian logistics landscape. His emphasis on merit, process, and systems and a C-level team of industry leaders have fostered a culture of collaboration and innovation. Financial Performance and Future Outlook: Sustaining Growth and Vision LogiPoint is on track to exceed its financial targets for 2023. High occupancy rates, new facilities, and successes in niche segments have expanded market share and ensured consistent revenue growth. With plans to further expand its footprint and contribute to developing Saudi Arabia’s logistics infrastructure, LogiPoint is poised for a promising future.
Inauguration of another state-of-the-art facility: Ushering in esteemed guests
Navigating ESG Commitments: LogiPoint’s Vision for Sustainable Logistics LogiPoint’s commitment to environmental, social, and governance (ESG) factors is not merely a corporate checkbox but a fundamental value embedded in its DNA. Farooq Shaikh, reflecting on LogiPoint’s approach to ESG, states, “Our seriousness towards ESG is evident in how we have treated the components of Environment, Social Inclusion, and Governance separately in adapting our governance structures.” The company’s focus on environmental protection is particularly noteworthy. LogiPoint has embraced green technologies in its latest buildings, incorporating renewable resources for energy, water conservation, and waste elimination. “We are racing
against time to minimize the damage done to the planet by climate change. As a logistics company, we recognize our responsibility to shift to green technologies and environmentally responsible practices,” notes Farooq. Empowering Saudi Women Workforce: A Commitment to Inclusion LogiPoint has charted a course of empowerment for Saudi women in the workforce in an industry often dominated by male-centric narratives. Farooq Shaikh proudly shares, “We are among the first organizations in the Kingdom’s supply chain and logistics industry to tap into the rich and diverse talent pool of Saudi women.” Despite logistics being perceived as a male-dominated segment, LogiPoint
LOGISTICS NEWS ME | FEBRUARY 2024 | 37
LNME
COVER
Three basic commitments: Our Customer, Our People, and Our Environment
has consciously worked towards breaking stereotypes, inducting female talent across various departments. The commitment goes beyond tokenism, as the company provides a safe and inclusive work environment, ensuring opportunities for professional growth through training and defining clear career paths. Aligning with Vision 2030: LogiPoint’s Strategic Partnerships As Saudi Arabia undergoes a transformative phase with Vision 2030, LogiPoint naturally aligns with the Kingdom’s ambitious goals. The GSCRI (Global Supply Chain Resilience
38 | LOGISTICS NEWS ME | FEBRUARY 2024
Initiative), unveiled by Crown Prince Mohammed bin Salman, resonates with LogiPoint’s core values of resilience, elasticity, and agility. Farooq emphasizes, “Vision 2030 is pivotal in expediting our transformation into a global logistics hub. It is a matter of privilege and pride that we find ourselves historically aligned with this vision.” LogiPoint’s strategic partnerships, particularly with Mawani on two new warehousing complexes in Jeddah Islamic Port, underline the company’s commitment to shared economic development goals and global logistics prominence.
Transformative Initiatives: Jeddah Logistics Park and Jeddah Logistics Hub Looking towards the future, LogiPoint has strategically invested in transformative initiatives, such as Jeddah Logistics Park (JLP) and Jeddah Logistics Hub (JLH). Positioned near Khumrah, south of Jeddah, JLP is designed to be a multipurpose logistics area, offering state-of-the-art warehouse facilities and opportunities for light industrial units. JLH, a BOT (build, operate & transfer) project in collaboration with the Saudi Industrial Cities Authority (Modon), aims to streamline logistics operations for enterprises within Modon 1.
WWW.CBNME.COM
LOGIPOINT – PIONEERING THE FUTURE OF SAUDI ARABIA’S LOGISTICS INFRASTRUCTURE
Farooq emphasizes, “The future of logistics lies in the seamless integration of AI and ML. Understanding the importance of predictive analytics, demand forecasting, and intelligent automation, we are committed to staying ahead of the curve. LogiPoint invests substantially in AI-driven solutions to optimize routes, streamline warehouse operations, and enhance overall supply chain visibility.”
LogiPoint CCO, Ghazanfar Khan, believes JLH and JLP bring a high level of sophistication to the Jeddah Logistics Landscape: “The Jeddah Logistics Hub is a self-contained logistics eco-system, a value creation platform enabling our clients to achieve ambitious targets in speed, efficiency, and operational excellence in the supply chain.”
LogiPoint embraces cutting-edge technologies to spearhead this transformation in an era where data-driven insights drive decisionmaking.
Conclusion: Leading the Charge Towards a Sustainable Logistics Future In conclusion, LogiPoint emerges not just as a logistics real estate company but as a harbinger of positive change in Saudi Arabia’s logistics sector. Through visionary leadership, strategic partnerships, and a commitment to sustainable practices, LogiPoint is not merely navigating the complexities of global logistics but actively shaping the landscape. As the company continues to evolve, it remains a beacon of innovation and resilience, contributing significantly to the Kingdom’s journey towards becoming a global logistics hub.
AI and ML in Logistics: Shaping the Future of Supply Chain Dynamics As the global logistics landscape undergoes a paradigm shift towards digitization and automation, LogiPoint recognizes the pivotal role of Artificial Intelligence (AI) and Machine Learning (ML) in enhancing operational efficiency and supply chain management.
LOGISTICS NEWS ME | FEBRUARY 2024 | 39
LNME
CRISIS
THE RIPPLE
EFFECT
The present Red Sea crisis is a complex issue that has an enormous influence on international trade, environmental protection, and security
T
he region’s overlapping security, political, and economic issues are reflected in the Red Sea Crisis, which has the potential to worsen and have an impact on the entire region or possibly the world. In order to improve peace and security in the region, efforts to solve these issues frequently require international intervention, security cooperation, and diplomatic measures. Because of the recent Houthi attacks, which disrupted shipping routes and raised safety issues, many ships were forced to take a longer route around the Cape of Good Hope instead of passing through the Bab el-Mandeb Strait. This increased cost because insurance premiums for ships passing through the Red Sea increased as a consequence of greater safety risk, further driving up overall transportation costs.
PATRICK LEPPERHOFF , Principal of INVERTO
40 | LOGISTICS NEWS ME | FEBRUARY 2024
As a ripple effect, the already-tight global supply networks are being severely strained by the Red Sea
WWW.CBNME.COM
THE RIPPLE EFFECT
situation. To lessen the effects, companies are searching for other routes, investigating nearshoring and reshoring possibilities, and modifying their planning and inventory control procedures. Although the full impact of the crisis on the world economy is still unknown, it is probably going to take some time to unfold. To understand better, One of Europe’s top experts in supply chain management and strategic procurement is INVERTO, an international management consulting firm. The company helps businesses digitalize their procurement processes and assists them from strategy formulation to implementation. As a division of the Boston Consulting Group, INVERTO helps clients create robust supply chains that satisfy sustainability standards by locating and maximising opportunities for process optimisation and cost
reduction. Here, Patrick Lepperhoff, Principal at INVERTO and supply chain management expert offers his thoughts on the subject… What’s the latest issue for manufacturers and retailers from the Red Sea crisis? We are continuing to see freight carriers using the crisis to increase their profit margins. Whilst insurance, fuel and other costs have increased the rates they are charging include pretty clear margin increases. Importers need to be live to that, keep an eye on market rates for shipping and be prepared to negotiate or shop around. War risk insurance for vessels using the Red Sea has increased substantially. Has industry been caught off guard by the Red Sea crisis? The contingency planning that businesses have undertaken means that the situation is far less chaotic than it could have been. A lot of lessons were learnt from the supply chain problems caused by COVID and the “Ever Given” Suez crisis. Which industries are more heavily impacted? The struggle at the moment is with the increase in costs rather than a lack of availability of shipping capacity but there are some exceptions. The petrochemicals industry is very reliant on the oil shipments that normally go through the Suez Canal. The fashion industry has a very high seasonality. Retailers should be receiving their summer clothing lines about now and delivery delays are causing them
difficulties. Electronics, furniture and DIY goods will be impacted. What about food prices? A number of car manufacturers have already gone on the record explaining that they have already got through their stock of components. Wine deliveries from Australia and New Zealand will be impacted and some foodstuffs like coconut milk, exotic fruits and spices may face delays. Overall, a low percentage of UK food travels the impacted route, so there are no concerns over food security. However, the increase in oil & gas prices will have a knock-on impact for food manufacturers. Why can’t industry just keep higher levels of stock? The ability to increase inventory levels depends on your profit margins. Lower margins make it more difficult to keep higher stock levels, as this comes at an extra cost. Shifting too far away from ‘just in time’ is not practical for many industries without damaging profitability.
LOGISTICS NEWS ME | FEBRUARY 2024 | 41
LNME
SOLUTIONS
SEEKING
ADVANCEMENTS Alain Kaddoum, Managing Director at Savoye Middle East, in a candid chat, speaks with Vibha Mehta on the evolving end-to-end supply chain solutions.
B
usinesses may optimise their supply chains for greater effectiveness, efficiency, and customer service by working with Savoye, which offers various hardware, software, and consulting services. Logistics solutions and supply chain management are among Savoye’s fields of expertise. They provide multiple benefits and technology to help companies cut expenses, increase productivity, and optimise supply chain processes. Here is what Alain Kaddoum, Managing Director at Savoye Middle East, has to share… What are the key trends that are shaping the supply chain industry? Significant trends influencing the supply chain sector are the shift towards digitalisation, the growing importance of resilience and risk management, sustainability programs, and rising e-commerce demands. Data analytics, the adoption of automation and robotics, the need for supply chain visibility and, personalisation and customisation to keep up with changing customer expectations are all revolutionising supply chain operations. How can Savoye help businesses meet the challenges of the future supply chain? Significant disruptions to the supply chain industry are anticipated in 2024, which can lead to a ripple effect across several sectors. Businesses must adopt technologically
42 | LOGISTICS NEWS ME | FEBRUARY 2024
ALAIN KADDOUM, Managing Director at Savoye Middle East
advanced processes to tackle these concerns and drive positive outcomes. Savoye, as a leading technology provider for the supply chain sector, offers a comprehensive suite of solutions designed to meet the industry’s evolving challenges. KWEST, Savoye’s Warehouse Execution System (WES), launched in 2023, combines 30 years of automation expertise with advanced data science algorithms to orchestrate coordination across automated and robotic systems. Our diverse portfolio includes X-PTS automated goods-to-person picking and storage systems that can be combined with ACR or AMR robotic solutions, best-in-class INTELIS, automated packing machines, elevating management and operational excellence. The company’s state-of-the-art Warehouse Management System (WMS) and Order Management System (OMS) streamline ordering processes and enhance inventory accuracy, all while maximising customer satisfaction. By combining warehouse and transport management, the company’s ODATiO software further optimises logistics processes, lowers errors, and saves time.
WWW.CBNME.COM
BEHIND THE SCENES
Additionally, it prioritises sustainability by providing environmentally friendly transport management solutions and enables businesses to develop and modify management practices independently according to shifting requirements. Savoye also improves order fulfilment efficiency by 30 per cent, reduces errors by 15 per cent, and raises overall quality with its cuttingedge ODATiO 3MS solution – which includes WMS, OMS, and Transport Management System – seamlessly integrates with automation technology or manual warehouses. With significant investments in research and development, Savoye positions itself as a strategic partner in achieving customers’ goals, enabling it to incorporate the latest AI and IoT innovations into software upgrades. What are the key opportunities you see in the UAE market? The logistics market in the UAE includes a diverse set of players who offer a variety of logistics and warehousing services, with the majority of these
services based in Dubai. Owing to this heightened pace of activity in the manufacturing and industrial domains, the sector is exhibiting significant growth. In response to this surge, businesses increasingly turn to third-party logistics (3PL) and adopt new technologies. The UAE’s strategic positioning as a re-export and multi-modal transit hub has also played an integral part in the market’s recent expansion. Additional sectors, including value-added services, e-commerce deliveries, and the 3PL market, further contribute to the industry’s success. Savoye remains a crucial player in this fast-paced environment by offering cutting-edge solutions that are customised to meet the industry’s evolving demands. How do you see the relationship between the UAE and India impacting the supply chain industry? The UAE and India’s solid economic ties significantly impact the supply chain industry. India is a significant trading partner of the UAE, allowing for a steady flow of goods between the two countries. With the UAE acting as a critical transit point for Indian goods, this relationship improves supply chain connectivity, fosters trade, and influences logistics strategies. This mutually beneficial relationship is further strengthened by joint initiatives and investments, which have a favourable effect on the supply chain dynamics in both nations. Additionally, it is anticipated that the India-UAE CEPA, which promotes trade by eliminating duties on more than 97 per cent of its tariff lines – which, in value terms, account for 100 per cent of Indian exports to the UAE –
LOGISTICS NEWS ME | FEBRUARY 2024 | 43
LNME
SOLUTIONS
solutions, tailored for optimising shipment packaging, contribute to a significant reduction of up to 40 per cent in overall logistics shipping emissions. The company’s JIVARO packing machine further enhances sustainability efforts by adjusting carton size based on content, resulting in fewer shipments and reduced transportation expenses, thereby helping companies operate efficiently and sustainably.
will accelerate the growth of bilateral non-oil trade to USD 100 billion annually—services exchange to USD 15 billion in five years. What is your take on sustainability? How is it shaping the logistics and supply chain industry? Today, sustainability is widely recognised as necessary across all industries, particularly in this sector. In addition to preserving the environment, it also helps meet the needs of modern consumers, which will increase business revenues and profitability and strengthen the brand. Sustainability in logistics begins with the adoption of a green supply chain
44 | LOGISTICS NEWS ME | FEBRUARY 2024
management approach, which entails integrating eco-friendly practices across each stage of the supply chain. Savoye’s ODATiO software exemplifies this commitment by prioritising sustainability through eco-friendly transport management solutions, assisting businesses in reducing their environmental impact. Moreover, our software
How would you differentiate UAE and KSA markets for Savoye’s operations? As previously stated, the UAE is a well-established supply chain and logistics market, especially with Dubai serving as a trade hub, renowned for its business-friendly policies and free trade zones that promote international trade. Saudi Arabia is a more extensive and populous market with significant growth opportunities, mainly through its Vision 2030 initiatives and the upcoming Expo 2030. This, combined with the growing interest in technology adoption and modernisation initiatives, makes Saudi Arabia a promising market.
WWW.CBNME.COM
LOGISTICS NEWS ME | FEBRUARY 2024 | 45
LNME
FREIGHT FORWARDING
OVER LAND & SEA
Vibha Mehta and Lee I’Ons, President of Kuehne+Nagel for the Middle East and Africa, have a brief conversation about the shifting industry landscape and Kuehne+Nagel’s position in it...
46 | LOGISTICS NEWS ME | FEBRUARY 2024
WWW.CBNME.COM
OVER LAND & SEA
are the characteristics of e-commerce: fast and reliable product accessibility in a snap of a finger, and their job is to make it happen. “We constantly audit our processes and procedures, mitigating risks and ensuring the most efficient flow,” says Lee I’Ons, President of Kuehne+Nagel.” “We emphasize transparency, visibility, and secure data processing for our customers to easily track their shipments and provide the best service to their end customers.” Whatever they do, they do with sustainability in mind. Kuehne+Nagel actively paves the way to decarbonizing the logistics industry. The target is to reduce our CO2 emissions by 33% by 2030, and they aligned with the Science Based Targets (SBTi) initiative, a program that provides a clearly defined path to reduce emissions in line with Paris Agreement goals and to limit global warming to 1.5°C above pre-industrial levels. The customers are also looking for more sustainable solutions, and they offer a range of innovative options to reduce the carbon footprint in the supply chain, such as Book & Claim, an insetting solution for road, sea, and air logistics customers who purchase
T
he logistics industry evolves at the most rapid pace. How Kuehne+Nagel conducted business ten, five, or even a year ago may differ entirely from today’s market demands, and they constantly adapt to meet the most ambitious requirements. Thanks to instant purchase and payment options, customers expect product delivery almost instantly, creating pressure for the industry to work faster and more efficiently. These
LOGISTICS NEWS ME | FEBRUARY 2024 | 47
LNME
FREIGHT FORWARDING
Hydrotreated Vegetable Oil (HVO), maritime biofuels, or SAF to limit transport emissions. By engaging all stakeholders of the supply chain industry, they can achieve the impact they aim for. Regional Economic Development And Diversification At Kuehne+Nagel, they understand that education is the most powerful tool to develop and attract young talents – the future generation of the workforce, to embrace the everchanging world. “We have partnered with several universities across the Middle East to engage in various programs, such as internships and mentoring,” shares Lee. They aim to provide the students with reallife experience and allow them access to a company operating on a global scale. For example, their cooperation with Zayed University in Abu Dhabi included mentorship programs for first-year students, during which they were tasked with providing solutions to challenges in sustainable operations, such as waste reduction and drives to reduce CO2 emissions. Lee continues, “In Dubai, we recently hosted MBA Program students from Hong Kong University keen on learning more about the supply chain and warehousing industry. Similar initiatives are taken in other countries to promote the logistics industry and support students learning in a real-life environment.”
48 | LOGISTICS NEWS ME | FEBRUARY 2024
LEE I'ONS, President of Kuehne+Nagel for the Middle East and Africa
Partnerships Their Roadmap 2026, leading them to Vision 2030, supports the ambitious expansion plans of geographical and service range. Creating the right partnership is one of their focus points. “Recently, in Saudi Arabia, we partnered with Tamer Logistics to provide contract logistics and supplement the freight forwarding activities that Kuehne+Nagel already provides in the country,” explains Lee. Additionally, last year, they
acquired Morgan Cargo, a leading South African, UK, and Kenyan freight forwarder specializing in transporting and handling perishable goods. The partnership is an excellent example of expansion that supports the geographical growth and their growth regarding local expertise and experience. “We are actively looking for the right partnerships, a natural fit that will foster our plans and Vision 2030. Each partnership, however, requires an in-depth audit
WWW.CBNME.COM
OVER LAND & SEA
crucial element in generating green hydrogen and producing clean energy for the local communities. Technology and innovation develop almost daily and must be used to maximise efficiency, minimizing the environmental impact. The industry can change. Its resilience and adaptability to adverse conditions have been tested during COVID-19, yet the stakeholders responded to the disruptions with agility and flexibility. Similarly, recent political unrest led to fast adaptations to support the trade and end customers.
to ensure a complete alignment in terms of business goals, operational processes, and the culture of inclusivity and diversity,” highlights Lee. Forecast The supply chain industry’s biggest challenge is the need for sustainable solutions and decarbonization of the entire industry. An estimated 8% of global emissions are caused by trade-related freight transport, and if logistics sites are also considered, this could be even as high as 11% of global emissions.
positive change, such as renewable energy projects,” comments Lee. The recent examples include the delivery of 190 wind turbine generators and 67 tower sets to the Kingdom of Saudi Arabia from China for the local wind farm set to produce renewable energy. In South Africa, Kuehne+Nagel transports wind turbines to the Northern and Eastern Cape, where they will be a
Additionally, e-commerce is a driving force for the industry, demanding forwarders and handlers to deliver faster but cheaper. End customers expect the products to be available right here, right now, and with the estimated market volume of US$50 billion by 2050 in the Middle East alone, the market share becomes value to grab. “The increased trade requires stateof-the-art infrastructure able to process the volumes. Investments in inadequate infrastructure are necessary to secure the trade flow, particularly in developing countries and regions,” concludes Lee.
Freight transportation may be one of the most challenging economic activities to decarbonize due to its heavy reliance on fossil fuels, but also because the demand for freight transport is predicted to rise further. “At Kuehne+Nagel, we recognised the challenge and continue working on tools to provide sustainable logistics, such as Book and Claim. We focus on projects that bring
LOGISTICS NEWS ME | FEBRUARY 2024 | 49
Visit us at BBME - Dubai Booth Stand: E24
Sustainable logistics for a brighter future Almajdouie Logistics serves diverse industries, including petrochemical, oil & gas, utilities, FMCG, retail, and automotive. With 50+ years of quality and reliability, it exceeds customers’ expectations. Specializing in project logistics, Almajdouie deploys extensive assets, including a 1,100-ton gantry crane, conventional trailer axles, SPMTs, and lowbed trailers for transporting oversized cargo. Serving Saudi Arabia, Middle East, and Far East megaprojects, it supports sustainability through national renewable energy initiatives like Dumat Al Jandal wind farm and Sakaka Solar PV plant, shaping a cleaner future.
Transportation
Freight Forwarding
Contact us
Customs Clearance
Warehousing
Terminal Handling
www.mlc.sa
Projects Logistics
EXPLORING E-COMMERCE VALUE CHAIN
EXPLORING
E-COMMERCE VALUE CHAIN
MOHAMED MOSSAAD, CEO of Flextock
Mohamed Mossaad, CEO of Flextock, highlights the advancements in the e-commerce value chain foot forward to develop and offer tech-driven solutions in the mobility industry…
U
Operating in the Middle East and Africa (MEA), Flextock is an e-commerce enabler. Since its founding in January 2021, the business has proliferated, with one notable achievement being a tenfold increase in net revenue year over year after entering Saudi Arabia. With the use of technology and scope, Flextock has carefully chosen to buy hundreds of retailers and is presently shipping thousands of orders every day.
The company provides e-commerce merchants with an innovative three-in-one service that includes sales, logistics, and fintech solutions. In contrast to rivals, Flextock combines all three, giving retailers unmatched empowerment. Flextock places a high value on providing a better merchant experience while staying cost-effective, from effective order fulfilment and last-mile logistics to various sales channels and financial solutions. Here, Mohamed
LOGISTICS NEWS ME | FEBRUARY 2024 | 51
LNME
SUPPLY CHAIN
is built around adopting flexibility for our merchants’ benefit. We demonstrate this by addressing inefficiencies across the entire e-commerce value chain as a fundamental principle to leverage our competitive edge - adjusting to the ever-evolving e-commerce landscape and constantly dominating modern logistics in the Middle East and North Africa.
In what ways has Flextock responded to the dynamic logistics environment in the Middle East, encompassing e-commerce and sustainability trends? Globally, the world of e-commerce has transformed significantly over recent years. The use case for shifting from traditional brick-andmortar to online has been evident, and COVID-19 only accelerated the world’s understanding of why this once futuristic vision has become our current reality. Flextock, as our name indicates,
52 | LOGISTICS NEWS ME | FEBRUARY 2024
With MENA’s e-commerce sector growing at an annual rate of 25%, we are seizing the opportunity to capitalize on this growth projection by analyzing and identifying regional market gaps. This approach has been integral in our success and is a driving force behind milestones such as tripling digital sales growth in the Kingdom of Saudi Arabia (KSA) in Q4 of 2023. This is a crucial market for us, Egypt, the UAE, and MENA as a whole; tackling the challenges of 2024, we are actively exploring avenues that will allow us to grow in unison with the needs of a modern and future-proof market. What unique value propositions and sector-specific solutions does Flextock offer compared to competitors? Like many companies today, we have our eyes set on innovation. However, what differentiates us from our competitors is our ability to leverage technology to deliver a unique three-in-one service that combines logistics, sales and fintech solutions - an unparalleled market offering. Several competitors specialize in one or two of these
aspects, but we stand out as a pioneering entity with what we can achieve and provide because of this robust service offering. This distinctive approach empowers our merchants in ways that have never been explored, where we have witnessed merchant sales double in the last 12 months of operations alone. How are you using innovation and technology to improve the effectiveness and transparency of your services? The digital logistics market was valued at $18.01 billion at the top of this decade and is expected to reach $77.52 billion with a compound annual growth rate of 17.04% by 2030 on the heels of several factors, including continuous industry innovation and technological advancements. This aligns with our ethos, as our commitment to advancing the regional e-commerce landscape is rooted in strategically employing innovation and technology to enhance the effectiveness and transparency of all our services. By integrating cutting-edge solutions such as artificial intelligence (AI), we have effectively streamlined the logistics process that is fulfilment and delivery by building a practice approach that predicts and highlights any problem that we might face before it happens, as well as the ability to give merchants insights about inventory management recommendations on Stock Keeping Unit (SKU) velocity and advanced predictive analytics of the merchant data. What are your main opportunities and problems in the Middle Eastern logistics industry? The MENA region’s logistics industry presents both promising opportunities and notable
WWW.CBNME.COM
EXPLORING E-COMMERCE VALUE CHAIN
challenges. Positively, the region has been experiencing drastic growth as the e-commerce market’s population is increasingly becoming tech-savvy, and we can see that reflected by a surge in the increase of online shopping. This will continue to be the case as the e-commerce sector is expected to grow to reach a market value of $50 billion in 2025, presenting us with various opportunities for regional market expansion. Merchants often need more dependable e-commerce operations handling partners, resulting in a subpar experience. The details and complexities of managing orders, handling inventory, and ensuring deliveries are received on time become a tedious task when operational support is lacking. The direct consequence is a ripple effect that reaches the end consumer, leading to dissatisfaction, lack of trust, and a tarnished brand image. Recognizing these pain points, our strategic approach harnesses the power of technology to streamline efficiency throughout every aspect of our operations. By deploying advanced tools, our merchants are empowered to overcome obstacles presented by unreliable partners, translating to a customercentric approach where seamless transactions and swift deliveries are the norm.
stack tailored to facilitate effortless transactions. Since our success is linked to our customers and merchants, our goal is to empower them by expanding their reach at the simple click of a button - eliminating the complexities associated with international sales and bringing in a new market of accessibility and growth for e-commerce in the region. How is Flextock contributing to building a more sustainable and environmentally conscious logistics ecosystem in the region? The logistics sector is responsible for 8% of global emissions (11% if warehouses and ports are included), making it one of the most carbon-intensive industries. Our approach accordingly accounts for an environmentally conscious ecosystem that actively reduces regional emissions. In our fulfilment centres, we prioritize initiatives that reduce packaging material and promote recycling. Leveraging technology, we streamline processes to minimize merchandise waste to contribute to a more eco-friendly and sustainable approach for our merchants. We also explore partnerships with lastmile companies using electric vehicle (EV) fleets. The goal is to reduce emissions associated with the delivery process, aligning with our broader purpose of adopting a greener and more sustainable e-commerce practice. We aim
to lead the region in environmentally conscious practices within the industry, and the integration of these strategic initiatives highlights our role as a responsible entity in the logistics sector, enabling us to meaningfully contribute to the region via an environmentally conscious business model. Can you elaborate on your capabilities in cold chain logistics, cross-border trade, or project cargo handling? In the world of logistics, our capabilities extend across numerous specialized domains. As for cross-border trade, our expertise lies in navigating complex regional regulations and customs procedures to optimize supply chain networks that result in seamless global operations. By optimizing our supply chain networks, we ensure compliance and position ourselves strategically with our e-commerce partners to capitalize on flourishing market opportunities. We prioritize staying informed about evolving trends and opportunities rather than solely focusing on regulations. This dedication lets us provide e-commerce merchants in Egypt, for example, with reliable guidance for expanding their operations into critical markets such as the KSA and the UAE. Reinforcing our role as a trusted partner, we empower businesses to navigate the challenges of cross-border e-commerce, facilitating growth and success in the evolving marketplace.
Moreover, the need for a resilient infrastructure for streamlining cross-border e-commerce intensifies the challenges merchants face venturing into international markets. Therefore, we are developing a technology
LOGISTICS NEWS ME | FEBRUARY 2024 | 53
Gold Partner
| FEBRUARY 26TH | Habtoor Palace Dubai Recognising the achievements of the real estate giants in the Middle East! FOR NOMINATIONS VIBHA MEHTA +971 58 6314145 vibha@bncpublishing.net
FOR SPONSORSHIP OPPORTUNITIES JOAQUIM D’COSTA +971 50 440 2706 jo@bncpublishing.net
FACEBOOK.COM/CBNME
@CBNME
CONSTRUCTION BUSINESS NEWS ME
WWW.CBNME.COM
Drive the new way. New IVECO T-Way: high productivity and safety on off-road terrains With a complete line-up of AWD and PWD versions and the the 16-speed HI-TRONIX automated gearbox, the IVECO T-Way features a host of functionalities such as Rocking Mode, Off-road Mode, Creeping Mode and 4 reverse gears to tackle with ease the toughest off-road conditions. The new architecture of the EBS system, combined with disc brakes on all wheels, greatly improves the vehicle’s performance and the driver’s safety in the most demanding applications. New IVECO S-Way: high technology and efficiency for on-road missions The new IVECO S-Way, with a completely redesigned and reinforced cab, offers a wide choice of Euro III/V diesel engines, a delivering class-leading power from 360 HP to 560 HP Euro III / 570 HP Euro V and superior fuel-saving devices, such as anti-idling feature, Ecoswitch, Ecoroll and Smart Alternator, 12-speed HI-TRONIX automated transmission with the most advanced technology in its category, electronic clutch and best-in-class torque-to-weight ratio.