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2019 Review A look back at the industry p28

SPECIAL EDITION

A CBM MEDIA GROUP PUBLICATION

All the highlights from the TLME Awards p12

News Round up of the latest developments p57

THE TEAM THAT MAKES IT HAPPEN Going above industry requirements to manifest the innovation and drive that powers the logistics sector & supports the greatest show on earth

TRANSPORTANDLOGISTICSME.COM | EDITION 2 - WINTER/SPRING 2020

From International to Local Knauf feature


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Why is the CargoX platform the most awarded and recognized platform in the industry?

The CargoX platform makes life much easier, as we finally have all the documents archived and document transactions visible in one place. Leif Arne Strømmen, VP of Innovation, G2 Ocean


A year and a half ago we built a platform that powered the transfer of the first blockchain-based Bill of Lading in history, namely from China to Europe in a matter of seconds. It was a monumental day to remember, one that changed how shipping has been done for centuries, driving the industry into a new era. Since then CargoX’s propriety Blockchain Document Transaction System (BDTS) has evolved into a blockchain platform on which you can send and transfer ownership of all kinds of documents, including Documents of Title. Along our journey we have been successful enough to have collected six prestigious accolades.

Below you will find just some of the reasons why: Decentralized. No central repository that could crash. Trustful. The blockchain records a hash of every document, utterly preventing document tampering. Independent. We do not mandate a specific usage case or scenario. It is easy to integrate into existing company workflows and infrastructure, so companies can transfer what they need. Neutral and open. Documents can be accessed and transferred only by their current owners (who are the only ones with a private key). Not even CargoX has access to your documents and it cannot interfere with the transfer. Private data remains private. All the private document and customer information is encrypted and it is not stored on the public blockchain at all. Your trade secrets, confidential documents, and the identities of companies using the system are hidden from the public. Your first association when hearing the word 'document' is probably a printed or handwritten piece of paper. Documents as such have evolved with the CargoX platform and they finally progressed into the 21st century. On the CargoX platform documents are stored digitally from the very beginning until they are archived. You can create, transfer, or use these documents as proof of ownership. They exist in theirs digital form on the network. The only way to see documents is on the screen. If you want to physically touch a document, you have to print it – although paper documents can be lost, counterfeited, copied, or even just delivered too late.

Compared to original paper documents, digital authentic documents are: Faster. Documents can be transferred instantly, instead of taking days. Secure. Documents cannot be stolen, lost, or tampered with. Inexpensive. Our digital courier service comes at a fraction of the cost of traditional transfers. Interoperable. You can integrate CargoX directly into your backend systems, eliminating problems associated with redundant data entry. Full audit log. An exact record of all transactions, timestamped and verified by thousands of computers worldwide. Immutable. Nobody -- neither CargoX nor any other entity -- can change document data.

Visit www.cargox.io


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Introduction

W

elcome to this special edition of Transport & Logistics Middle East, a celebration issue marking our recent TLME Awards 2019 and looking to a new decade with hope, vision and positivity. The global transport and logistics sector has seen a great wave of change over the last decade, with digitalization marking new ways of doing business and threatening to change the way we conceive of the sector, the jobs within it and the business strategies we implement. Because of this, the sector has seen a raft of new entrants from the computing and technology fields, most significantly regarding AI and machine learning. Yet as the adage goes, ‘making changes in the supply chain is like making changes to an aeroplane while it’s already flying,’ the implication being it’s exceptionally hard to make major changes safely without affecting the trajectory of the operation. Further still, many in the supply chain have approached this inevitable change with trepidation, furthering the ‘conservative’ reputation of logistics, yet thankfully, some have not. Some visionaries, forward-thinking organizations and individuals have been willing to try new things, to take chances and to develop new technologies within new business models – it is so the case that much of this innovation has been within the Middle East. This leads us to the core purpose of this magazine and of the TLME Excellence Awards – to recognise, illuminate and celebrate the work that is being done to take our sector to the next level. To provide a platform for the innovators, the risk-takers and the hard workers who are creating new realities for business and commerce. The developments in the supply chain equal developments in the global sphere, so our industry has a major role to play in the development of our world, which is another reason the Middle East has become a powerful global region. You would be hard pressed to find a more dynamic area with the willingness to invest, drive to be the best and openness to new ideas. This attitude is giving the Middle East, most notably the UAE and Saudi Arabia, a new reputation. This reputation is powered by the cutting-edge technology and leadership evidenced by companies such as DP World and Dubai Airports, while Saudi Arabia looks set to be the first Hyperloop ready nation on earth. And that’s not even to mention the 5G-readiness both the UAE and Saudi are prepped for in 2020. This edition takes you on a journey through logistics in the Middle East, we have features from leading names in the region and the sector, as well as industry insights that give you a clear, concise and actionable lowdown on the key trends for the new decade. The edition also features a review of our TLME Excellence Awards 2019, highlighting the class and splendour of a very special evening with some amazing names and huge awards won. I do hope you enjoy reading this edition. Remember to keep your eyes peeled for all the latest news on the TLME website, as well as for some rather large announcements to be made soon regarding our plans for 2020.

EDITORIAL editorial@cbmmediagroup.com Editor Sunil Thakur Head of Editorial Richard Joy Head of Design Steven Castelluccia COMMERCIAL Publisher & CEO Sam Khan sam.khan@cbmmediagroup.com Marketing & Event Manager Nour Hassan events@cbmmediagroup.com PRODUCTION Printers Masar Printing and Publishing Co All material is strictly copyright and rights are reserved. Reproduction in whole or in part without written permission from the publishers is prohibited. CBM Mediagroup does not accept responsibility for omissions or errors.

Yours Sincerely Richard Joy, Head of Editorial, Transport & Logistics Middle East 6

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CBM Mediagroup Lamborghini Dubai Building 2nd Floor, Sheikh Zayed Road, Dubai, UAE, PO Box 191222

Licensed by Fujairah Culture & Media Authority


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FROM THE CEO

Welcome to our end of year review that showcases our fantastic Excellence Awards 2019 and offers you an insight into what to expect for 2020.

I

t’s been a pleasure for me to be deeply involved in the Middle East supply chain in 2019, is there really anywhere else with the same level of investment and dynamism than here? If there is, I’d like to know, as the reason I created TLME in Dubai was because, after working internationally, I saw the Middle East actively doing what other regions were theorising. Whether it was automation at Jebel Ali Port, nextgeneration technology at DXB or hyperloop being built in the UAE and Saudi, wherever I looked making futuristic innovation a reality seemed to be the order of the day. 2020 looks to be the year when all of that sowing can be reaped, with the launch of the aforementioned hyperloop slated for 2020, along with 5G and an array of supply chain-based innovations. We certainly live in exciting times. This is one of the core reasons why I started the TLME Excellence Awards,

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to recognise, emphasise and celebrate the fantastic work we’re seeing in the region and push the innovators onto the global stage. This edition offers you an insight into who these winners are, as well as offering a holistic round up of the transport and logistics sector, with extra insight into what to expect for 2020. Before I leave you to enjoy this edition, I’d like to say a special thank you to those who attended the Excellence Awards for making it such a special evening, as well as those companies who I’ve worked closely with TLME’s inception, who I’ve been able to share a vision with. There are almost too many people for me to thank, but I would like to say a special thank you to DP World, Dubai Airports Cargo Police, Knauf M.E., Dubai Airports, and CargoX. Sam Khan CEO Transport & Logistics Middle East (TLME)


Contents 28

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12 06 08

From the CEO

12 2019 Excellence Awards Review

28 32 34 38 40

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REVIEW & OUTLOOK

From the Editor

Shipping Air Transport

NEWS ROUND-UP

The Future of Logistics Technology in the Supply Chain

Knauf Feature:

From International to Local

58 60 62 64 66

Q&A Shipa Freight Global Issues Air Cargo Sea Cargo Logistics


ARROW-CIRCLE-RIGHT-PRIMARYT he UAE Federal Transport Authority (FTA) scooped the first prize of the year

Awards review Transport & Logistics Middle East celebrated the second edition of the TLME Excellence Awards in style in a star-studded evening held at the Roda Al Bustan Hotel in Dubai, UAE.

T

ransport & Logistics Middle East celebrated the second edition of the TLME Excellence Awards in style in a star-studded evening held at the Roda Al Bustan Hotel in Dubai, UAE. The event was of special note as it saw TLME utilise a public voting system that garnered millions of international votes to choose winners as if it were a “presidential election” – a first for a supply chain-based event in the Middle East region. In total, 36 Awards were given out, covering the 4 key areas: • • • •

Special Recognition Awards Technology Awards Air & Shipping Awards Logistics Awards

TLME CEO Sam Khan said: “It was amazing to host 12

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the second annual TLME Awards and see it grow so rapidly, the evening took a great deal of planning and work so I was delighted to see it run smoothly on the night. “Our public voting system worked brilliantly and we garnered millions of votes from our international audience, seeing winners chosen by their peers and being picked on merit, which was really fantastic. “I founded TLME because of my experience in media and the supply chain, and having worked internationally, I knew there was something special about the Middle East region. “Perhaps that’s because it’s willing to challenge operational norms and bring the future to us here today, yet whatever the reason it is clear there is dynamism in this region and it was a pleasure to recognise the finest of that at the Excellence Awards.”

I founded TLME because of my experience in media and the supply chain, and having worked internationally, I knew there was something special about the Middle East region”


Arrow-circle-left-primaryT he second award saw DP World’s H.E. Sultan Ahmed bin Sulayem recognized for his invaluable contributions to the UAE and global trade. The Lifetime Achievement Award 2019 was collected by Shahab Al Jassmi, Director for Ports and Terminals UAE Region on behalf of H.E. Sultan Ahmed bin Sulayem

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3.Transport & Logistics Authority of the Year 2019 NOMINEES • • •

Dubai Airports Cargo Police Sharjah Airport Cargo Police Abu Dhabi Airport Cargo Police star WINNER star

Dubai Airports Cargo Police DXB & Dubai Airports Cargo Police DWC

2 Arrow-Circle-Down-PrimaryD ubai Police won the Special Recognition award for Transport & Logistics Authority of the Year 2019

SPECIAL RECOGNITION AWARDS

Nominees:

1.Government Agency in Logistics 2019

• • •

NOMINEES • • •

The Federal Customs Authority The Federal Transport Authority Manafth star WINNER star

Federal Transport Authority (FTA)

4.Global Pioneers in Aviation Award 2019 UAE General Civil Aviation Authority Emirates General Authority of Civil Aviation of Saudi Arabia star WINNER star

UAE General Civil Aviation Authority 3 4

2.Lifetime Achievement Award 2019 Nominees • • • •

H.E. Sultan Ahmed bin Sulayem, DP World Fadi Ghandour, Wamda Group Paul Griffiths, Dubai Airports Gary Chapman, dnata star WINNER star

H.E. Sultan Ahmed bin Sulayem, DP World

Arrow-circle-up-primaryT he UAE General Civil Aviation Authority take home Global Pioneers in Aviation 2019

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ARROW-CIRCLE-RIGHT-PRIMARYD P World wins award for Global Trade Enabler of the Year 2019

5.Global Trade Enabler of the Year 2019

Arrow-Circle-Down-PrimaryT he prestigious Made in UAE award was collected by Bassel Al Nahlaoui, Careem’s Managing Director for Gulf region and Pakistan

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Nominees • • • •

GOTRA Trading DP World DSV Panalpina FedEx star WINNER star

DP World, UAE Region

6.Made in UAE Nominees • • • •

Fetchr Careem Conares Smart Dubai star WINNER star

Careem

7.Manufacturer of the Year 2019 Nominees • • • •

6 ARROW-CIRCLE-RIGHT-PRIMARYM anufacturer of the Year 2019 was received by Managing Director Knauf Middle East and India, Amer Bin Ahmed.

SABIC Emirates Global Aluminium Knauf M.E. RAK Ceramics star WINNER star

Knauf M.E.

8.Influencer of the Year 2019 Nominees • • •

Faisal M. Al-Mulla, Dubai Airports Bernd Leo Struck, dnata Cargo Nadia Abdul Aziz, NAFL star WINNER star

Faisal M. Al-Mulla, Dubai Airports

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9.Award for Promotion of Gender Equality 2019 Nominees • • • •

flynas Hutchison Ports Dammam Uber KSA FedEx star WINNER star

Hutchison Ports Dammam

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Arrow-circle-left-primaryS hipa wins the Logistics Technology Platform of the Year 2019 collected by Hemang Kapur, VP – Commercial Arrow-Circle-Down-PrimaryT he Leading Safety Vehicles Provider 2019 Award went to Inkas Vehicles LLC Vehicles LLC

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8 Arrow-circle-up-primaryI nfluencer of the Year 2019 went to Faisal M. Al-Mulla, Director of Cargo Business Management, Dubai Airports

Arrow-Circle-Down-PrimaryS ERCO Middle East bags the Transport Solution Provider of the Year 2019

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10 Arrow-circle-left-primaryCEO of Hutchinson Ports Dammam, Jay New, with the Award for Promotion of Gender Equality 2019 Arrow-Circle-Down-PrimaryC EO of IQ Fulfillment, Fadi Amoudi, receives the Digital Innovation of the Year 2019 award

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TECHNOLOGY AWARDS

10. Transport Solution Provider of the Year 2019 Nominees • • •

SERCO Global Shipping & Logistics DHL

12. Logistics Technology Platform of the Year 2019 Nominees • • • •

Shipa Freightos Saloodo Trukkin star WINNER star

Shipa

star WINNER star

SERCO Middle East

11. Digital Innovation of the Year 2019 Nominees • • • •

Saloodo, DHL FarEye Unitechnik IQ Fulfillment

13. Leading Safety Vehicles Provider 2019 Nominees • • • •

Harrow Armoured Vehicles INKAS VEHICLES LLC Motofac Special Vehicles Mercedes Benz Trucks star WINNER star

INKAS VEHICLES LLC

star WINNER star

IQ Fulfillment TRANSPORTANDLOGISTICSME.COM

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14.Cargo Security Solutions Provider of the Year 2019 Nominees • • • •

GlobeTracker Roamworks Tenacent SA Lyngsoe Systems star WINNER star

Roamworks Arrow-circle-up-primaryR oamworks bagged the Cargo Security Solutions Provider of the Year 2019 Award

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15. Smart Logistics Automation & Robotics Technologies Provider 2019 Nominees • • • •

SwissLog Exactus Systems Huawei Enterprise IQ Robotics star WINNER star

IQ Robotics

Arrow-circle-up-primaryI Q Robotics’ Fadi Amoudi on stage once again to receive the Smart Logistics Automation & Robotics Technologies Provider 2019 Award

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16. Blockchain Innovation of the Year 2019 Nominees • • • •

TradeLens (IBM/Maersk) CargoX – Smart B/L SilSal – Maqta Gateway Further Network star WINNER star

CargoX

Arrow-circle-up-primaryB lockchain Innovation of the Year 2019 went to CargoX

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17. Innovator of the Year 2019 Nominees • • • •

BOXBAY Dubai South AirLink International UAE International Freight & Logistics star WINNER star

Arrow-circle-up-primaryD ubai South recognized for its pioneering efforts with Innovator of the Year 2019 Award 16

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Dubai South


Arrow-Circle-Down-PrimaryC EO and Co-founder of Fero.ai, Abhinav Chaudhary, collects the Artificial Intelligence Award 2019

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Arrow-Circle-Down-PrimaryW ish.com wins the e-Commerce Platform of the Year 2019 Award collected by Dominik Kolesnik, Head of Business Development

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18. Artificial Intelligence Award 2019

19. E-Commerce Platform of the Year 2019

Nominees • • •

Aramex – AI-Based Route Optimization Fero – AI enabled voice agent for logistics Dubai RTA – AI Chat

20. Pioneer Award for Excellence in Cloud Enterprise 2019

Nominees • • • •

Alibaba Amazon Holisol Wish.com

Nominees • • • •

Fero.Ai

Nominees • • •

star WINNER star

star WINNER star

star WINNER star

Microsoft SAP Oracle Infor

21. Autonomous Vehicles Technology Provider of the Year 2019

SAP

Wish.com

Sea Machines & Robotics Maersk DG World FedEx & DEKA Development & Research NOON (Last Mile Delivery) star WINNER star

DG World

Arrow-Circle-Down-PrimaryT he Pioneer Award for Excellence in Cloud Enterprise 2019 was won by industry leader SAP

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Arrow-circle-up-primaryD G World wins Autonomous Vehicles Technology Provider of the Year 2019


Leading the way in Asset Intelligence


Arrow-circle-left-primaryA bu Dhabi Terminals (Khalifa Container Terminal) wins Terminal of the Year 2019 Award Arrow-Circle-Down-PrimaryM SC wins the big Shipping Line of the Year 2019 Award

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25. Terminal of the Year 2019

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Nominees • • • • •

Jebel Ali CT3 Suez Container Terminal Khalifa Port Container Terminal Port of Salalah Container Terminal Khorfakkan Container Terminal star WINNER star

Khalifa Port Container Terminal – Abu Dhabi Terminals SEA FREIGHT AWARDS

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26. Outstanding Performance in Maritime Services 2019

22. Shipping Line of the Year 2019 Nominees • • • • •

Nominees

Maersk Evergreen COSCO CMA CGM MSC

• • • •

star WINNER star

MSC

Topaz Energy & Marine CS Maritime DMCC Middle East Maritime Consultants Zara Maritime star WINNER star

Arrow-circle-up-primaryC argoX adds to its haul with the award for the Most Innovative Solution 2019

CS Maritime 26

23. Most Innovative Solution 2019 Nominees • • • • •

BOXBAY, DP World Traxens Container Tracking TradeLens CargoX Maqta Gateway - MARSA star WINNER star

CargoX

24. Port of the Year 2019 Nominees • • • • •

Khorfakkan Port King Abdullah Port Jeddah Islamic Seaport Jebel Ali Port Khalifa Port star WINNER star

Jebel Ali Port 20

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Arrow-circle-up-primaryC S Maritime is recognized for Outstanding Performance in Maritime Services 2019 Arrow-circle-left-primaryT he prestigious Port of the Year 2019 Award goes to Dubai’s Jebel Ali Port


Unitechnik FZE Dubai, United Arab Emirates

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DMCC

AIR TRANSPORT AWARDS

27. Cargo Airline of the Year 2019 Nominees • • • •

Emirates SkyCargo Saudia Cargo ETIHAD Cargo Turkish Cargo star WINNER star

Turkish Cargo Arrow-circle-up-primaryD ark horse, Turkish Cargo, awarded Cargo Airline of the Year 2019

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28.Airport of the Year 2019 Nominees • • • •

Dubai International Airport Abu Dhabi International Airport Bahrain International Airport King Abdul Aziz International Airport star WINNER star

Dubai International (DXB)

Arrow-Circle-Down-PrimaryT he Automation Solutions Provider of the Year 2019 Award goes to Unitechnik

29 Arrow-circle-up-primaryD ubai Airports’ Faisal M. Al Mulla collects the Airport of the Year 2019 Award for its flagship Dubai International (DXB)

29. Automation Solutions Provider of the Year 2019 Nominees: • • •

Unitechnik Siemens Loedige

star WINNER star

Unitechnik

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LOGISTICS AWARDS

30. Automated Air Cargo Handling System of the Year 2019 Nominees • • •

ALS Logistic Solutions Unitechnik Siemens Saudi Arabia star WINNER star

ALS Logistic Solutions

Arrow-circle-up-primaryA LS Logistic Solutions takes home the award for Automated Air Cargo Handling System of the Year 2019

31. Most Innovative and Secured Trucking Solutions Provider of the Year 2019 Nominees • • • • •

Mercedes Benz Trucks VOLVO Trucks ATC Allied Transport Scania Airlink International star WINNER star

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Arrow-circle-up-primaryM arc Legeay, General Manager, Mercedes Benz Trucks accepts the Most Secured & Innovative Trucking Solutions Provider of the Year 2019

Mercedes Benz Trucks

32. Freight Forwarder of the Year 2019 Nominees • • •

DSV Panalpina DB Schenker Sinotrans star WINNER star

DSV Panalpina 32 Arrow-circle-up-primaryD SV Panalpina takes home the award for Freight Forwarder of the Year 2019

33. Integrator of the Year 2019 Nominees • • •

DHL FedEx UPS star WINNER star

FedEx

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Arrow-circle-up-primaryF edEx wins the Integrator of the Year 2019 Award


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Arrow-circle-up-primaryT he Security Logistics Provider of the Year 2019 Award is won by industry leader G4S

Arrow-circle-up-primaryP remiere Logistics wins the massive Supply Chain Solutions Provider of the Year 2019

34. Security Logistics Provider of the Year 2019

35.Supply Chain Solutions Provider of the Year 2019

Nominees

Nominees

• • • •

Transguard G4S SecureGard Prosegur

• • • •

Premier Logistics Hellman Worldwide Logistics Al Majdouie Kerry Logistics

star WINNER star

G4S

36.Road Transporter of the Year 2019 Nominees • • • •

Wing.ae Trukkin Fetchr Trukker star WINNER star

Trukkin

star WINNER star

Premier Logistics 36

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Arrow-circle-up-primaryTrukkin wins the award for Road Transporter of the Year 2019


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REVIEW & OUTLOOK

SHIPPING A REVIEW OF 2019 & OUTLOOK TO 2020

W

e cannot start any review of shipping in 2019 without first looking at the global political landscape – perhaps this is true every year, however it is especially so in 2019 because of the ongoing trade war wrangle between the US and China. The trade war, which began long before 2018, has really come into fruition in 2019, so this piece will start with the implications of that before moving onto look at the broader global situation, new technologies that are influencing the market, and ending with an insight outlining the year ahead.

Trade Wars & Protectionism If one had to summarise 2019 in a nutshell it would be something along the lines of: when the world’s two superpowers butt heads, the world shakes. 2018 saw a tit-for-tat tariff escalation between the two global giants, with reports stating 2% of global trade being affected by the embargoes and levies. Yet the notion that every one is a loser in this scenario isn’t exactly accurate. While there have been losers, new opportunities have also sprung up for many who are happy to fill the gaps

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left in the US-China trade. Perhaps the biggest story of the year has been the diversification of trade in the Asian region, with South East Asia now getting more and more business and building a name for itself as the world’s engine/manufacturing hub. Another major story of the year has been the seemingly never-ending ‘Brexit’, in which the UK attempts to leave the EU. While this isn’t going to have a big impact on global trade levels or shipping itself, it is a microcosm of a wider trend we’re seeing politically. That trend is the trend of protectionism. Global trade has been built on the back of people and commodities flowing over borders, and a political storm is now brewing in many countries around the world as national communities feel the pinch of globalisation. This has been at forefront of many national, regional and even global political conversations, with uncertainty reigning around how a country is going to be governed and position itself in the global market. While this does create uncertainty, one thing you can always say about

shipping is that it pushes on regardless of the circumstances – in reality, what else can it do? That pushing on regardless has led some major bodies to predict a moderate growth for the sector despite all the turbulence at present, however, there are of course a raft of other technologies and potentialities just around the corner that are responsible for that uptick.

The Future Today Digitalization is one of those words that means so many things its exact meaning can end up in a sort of hazy grey area, that’s certainly been the case in recent years, however this is beginning to change, with concrete technologies being formed and new methods of doing business a reality. These changes in the sector are demanding workers to acquire new skills, as well as bringing new blood into the sector, especially in the form of digital experts and programmers. While technologies such as blockchain are changing the ways in which we can do business and new technologies are popping up everywhere, the big question still remains – how can we make this work universally. The answer to that is not a simple one as it requires a host of private players to work together, which indeed some are, yet they’re predominantly working within their own siloed platforms with pre-selected organizations. It’s understandable why companies are doing this, such as Maersk and IBM with their TradeLens blockchain operation, everyone wants to be the organization who crafts the standards in which the rest of the world functions under, yet naturally no company is going to want to cede that power to a rival. So we have something of a stalemate. This is where international bodies and community systems associations are becoming very influential. In reality it is only these bodies that


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REVIEW & OUTLOOK

While autonomous ships are touted as bringing a new level of safety, accidents will always happen, and the industry needs to know who will be ultimately responsible

can act as neutral arbiters between competing systems, companies and technologies to unlock the power of digitization. However, quite whether the industry will play ball quite yet is another matter and something 2020 will decide.

Autonomous Ships Perhaps, the most exciting development in the supply chain at present is the forming of autonomous ships, which are actually ready, according to some reports. Ready or not, a key issue remains regarding autonomous transport in general, and that is who is responsible when something goes wrong? While autonomous ships are touted as bringing a new level of safety, accidents will always happen, and the industry needs to know who will be ultimately responsible if, let’s say, an autonomous ship crashes into a berth and brings down a multimillion dollar STS crane, which then lands on top of an RTG crane and a container stack. Is the ship owner responsible? There’s no pilot, so does he blame the AI system? That’s just a computer, so does the technology provider take the rap? All of these questions need to be answered before autonomous ships enter operation and in answering these questions we will be sure to see a raft of new bodies, individuals and legal experts enter the sector. On the more positive side, autonomous ships are representative of the changes we are likely to witness in 2020, which in essence of largely social causes.

2020 Vision Quite a fanfare has been made regarding the IMO sustainability regulations set to come into force in January 2020. Green energy and sustainable operations are at the forefront of government minds and shipping 30

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liners’ plans. The industry, while cleaner than air freight, will always court bad press due to the damaging imagery of a big, dirty tanker in clean water, or the vision of a bird or fish without its habitat. So, despite making improvements, the industry still has someway to go and as is always the case in these situations, we will have to wait and see how extreme any punishment is for liners not adhering to sustainable goals and using clean fuel. Until we’ve ascertained that it’s hard to see how green the industry really will go. The signs are at present that liners are very much on board, with Maersk recently announcing it’s attempting to figure out how it can use alcohol as a fuel (yes, really) and further still, Hapag-Lloyd, CMA CGM and MSC have all stated publically that they will not use the lucrative Arctic Route. While a passage over the Arctic offers huge, huge savings on time spent at sea, it is a very politically unpopular move in that it could endanger the Arctic habitat. Again, however, it will be interesting to see if such moral fortitude holds firm if one liner is to take the risk and reap the potentially huge rewards. With the on-going changes digital, environmental and political, the industry is also seeing an uptake in the amount of females in this traditionally ‘male’ and ‘conservative’ sector. Many big names have been eager to create opportunities for women to join the sector, with some of the big names in the Middle East also leading this charge with DP World and King Abdul Aziz Port in Saudi Arabia making headlines in this regard. In essence, 2020 looks to be bright for the industry, we have our challenges with the trade war, the never ending overcapacity puzzle and collaboration, yet the wheels are beginning to turn and 2020 could see a raft of major developments.


REVIEW & OUTLOOK

AIR TRANSPORT A 2019 Review

T

he air sector continues to grow and grow, with an unprecedented amount of passengers and cargo flying in our skies. While shipping has the bulk of freight moved globally, and always will due to lower costs, airfreight is gaining ground in an era of end-to-end operations and one-day delivery demands. In this new market, flying goods offers immense opportunities for speed

and convenience, which has led to a raft of new players and technologies in the space. Airfreight now accounts for around a third of global trade (as measured by value), generating millions and millions of jobs, as well as packing trillions into the global economy. Of course, the major concern in the air sector has been the carbon footprint spread by planes, however this is dropping, albeit slowly. Sustainability is a key issue in air transport at present and will form a key part of this review also, however before moving onto this dimension, the piece will start with an insight into the industry as a whole.

The State of Play Since the global crash in 2008, we have witnessed modest improvements in the global economy meaning airlines have been able to grow in profitability, especially when one considers the aforementioned boom in passenger demand. However, the global

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air sector is being squeezed at present, with the International Air Transport Association (IATA) releasing data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), decreased by 4.5% in September 2019, compared to the same period in 2018. This marks the eleventh consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008 with freight capacity, measured in available freight tonne kilometres (AFTKs), rising by 2.1% year-on-year in September 2019. This means that capacity growth has now outstripped demand growth for the 17th consecutive month. This situation is somewhat compounded with the reality that air cargo continues to suffer from the intensifying trade war between the US and China, the deterioration in global trade, and weakness in some of the key economic drivers. The situation isn’t much better regionally, with all key areas struggling to build big profit margins. That said; the dip has been attracting many new entrants and new investors who see fresh opportunity. Similarly, banks are still eager to lend. Rather conservatively, IATA is predicting around 4% traffic growth in 2019.


There seems to be a vast amount of opportunity, yet a vast amount of challenge too. Airline Performance As previously stated, there remains a huge passenger demand on airlines, although this is slightly dipping. However, such a dip has to be expected as the demand cannot rise and rise indefinitely. Further, the dip isn’t really affecting the world’s major airlines, with global profits estimated at around US$35 billion, according to industry reports. In terms of customer satisfaction, the world’s top passenger airlines are (as devised by public voting and collated by SkyTrax): 1. Qatar Airways 2. Singapore Airlines 3. ANA All Nippon Airways 4. Cathay Pacific Airways 5. Emirates 6. EVA Air 7. Hainan Airlines 8. Qantas 9. Lufthansa 10. Thai Airways With regards to cargo airlines, dependable 2019 results are yet to be released, however one could assume it won’t be too dissimilar from 2018’s results of: 1. FedEx 2. Emirates SkyCargo 3. Qatar Airways 4. UPS 5. Cathay Pacific 6. Lufthansa 7. Cargolux 8. Air China 9. China Southern Airlines 10. Singapore Airlines

Infrastructure & Technology Infrastructure has been a big buzzword of 2019 as demand grows and space is increasingly limited. Infrastructure is therefore expected to be a major issue in 2020, as governments and planners try to juggle the competing demands of finding space, being economical with said space and trying to be a green as possible. In the shorter-term view however, there is also a demand to bring better efficiency and an improved UX at airports, as well as aboard flights. Henceforth, the demands on the industry are wide-ranging. Technology is coming to rescue in this regard, with new innovations such as the ‘One ID’ programme that allows passengers to move through airports seamlessly with a biometric token. Biometric tokens aren’t the only solutions either, with plans to enhance baggage tracking, efforts to modernize slot allocation rules, reform airspace management and find better means to fund infrastructure development. Security is another key area for development in this regard, with head of IATA Alexandre de Juniac recently stating that the industry needs a level of “international cooperation and information sharing by governments” in order to develop. Mr de Juniac said that the primary responsibility for safety and security ultimately lies with governments and that they must push hard to ensure international standards are being devised and met.

Environment & Sustainability 2020 is a big year for the global climate. With global strikes happening worldwide and a big political, public and corporate drive for green solutions, the air sector is expecting to up its game yet more. Noises from each of the major airlines have stated they are on board with this as the sector strives to achieve its longer-term goal of carbon neutral

growth (CNG) by 2020. IATA itself has stated it has outlined a series of ambitious targets for the sector to adhere to, these include: • An average improvement in fuel efficiency of 1.5% per year from 2009 to 2020 • A cap on net aviation CO2 emissions from 2020 (carbonneutral growth) • A reduction in net aviation CO2 emissions of 50% by 2050, relative to 2005 levels Another key area in which we could see improvements is in aircraft design. New designs are said to be in the pipeline that mitigate emissions with improved, green technology, and of course the debate continues with regard to the development of sustainable aviation fuels.

Conclusion As tends to be the case with the air sector, things are fast moving, challenging and subject to change. There seems to be a vast amount of opportunity, yet a vast amount of challenge too. There also seems to be vast amounts of money being made with a raft of new entrants in an ironically squeezed market. Such are the innate contradictions of the sector. In essence, it’s hard to predict where the sector will be in 10 years, but for 2020 we can expect more breaking even and a raft of new technologies coming into the space. TRANSPORTANDLOGISTICSME.COM

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REVIEW & OUTLOOK

The Future of Logistics: 5 Key Trends A 2019 Review

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f all the dimensions of the supply chain, logistics is the technological leader, with the most advanced operations seeing AI and robots push digital capability to its max. This isn’t just the case with regard to the supply chain, there’s an argument to be made that logistics is one area where AI is at its most advanced and where we’re already seeing the social changes predicted for other industries when AI becomes commonplace. Amazon’s logistics centres are a good example of this. With robots taking the role of humans and AI systems that work 24/7 taking care of organisational and operational duties, the sector is becoming a blueprint for other industries to model themselves upon. Further still, ports globally are looking to the possibility of port-centric logistics operations, meaning multinationals can slash manufacturing and travel times by creating and shipping cargo at source. The end-to-end chain has created this new dimension of business, which looks to be tying the port and logistics sectors much closer together.

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Naturally, this creates opportunities, as well as causes casualties, the beginnings of which we will start to see in 2020. This piece looks at the key drivers between the future winners and losers with a foresight to the development of operations of the future.

1

Digitalization

As prior stated, logistics is well down the road of digitalization already, yet that doesn’t mean to say it’s stopping. We can expect an acceleration of technologies in 2020, especially in the fields of business intelligence and big data. Logistics has the advantage of having streams of data to now integrate and analyse, meaning organizations should be looking to employ experts to read trends and to create predictive analytics. While this is gold-dust for the individual organizations in structuring their operations, in time information should become more available as it trickles down into the wider supply chain, thereby making a clearer picture for all.

This information will be extremely helpful in devising new business processes and operation strategies across the value chain. Digitalization remains a key driver for many in logistics seeking to simplify processes, redesign their services to outpace competition and reduce the impact of unpredictable human skillsets. Further still, we can expect to see changes not just in how businesses conduct operations, but also in how customers expect business to be operated. Just as we expect chat-support online as well as free phone services in our lives, so too will customers expect online/mobile ordering in the supply chain.

2

Social Issues

With automated technologies and digitization firing ahead, logistics leaders need to get involved in the social and political side of the debate, because if they don’t they can be easily attacked for lacking compassion and/or a plan for dispossessed workers. In essence, the debate that is raging between politicians, philosophers and


REVIEW & OUTLOOK

futurists needs to come down to earth with real actionable plans. If we really are to see wide-scale AI and robotics take people’s jobs, where will they go? It’s not as simple as just finding another job, as automation and AI is impacting industries worldwide. Further, simply retraining isn’t a magic bullet either, as new creative roles are likely to be filled by university-educated technology buffs that are not easy to compete with. Therefore, it’s most important that logistics leaders are aware of the conversations regarding worker replacement and have a line on the pressing solutions such as universal basic income and the potential ‘robot tax’ that can offset some of the losses felt by workers. Of course, it’s not easy to see if these are real workable solutions (hence why it’s such a talking point for the aforementioned politicians, philosophers and futurists) but it is important for logistics leaders to show they understand these issues and have put some thought into potential strategies for the future. On top of this logistics leaders will be pressured to ensure they are providing an inclusive work environment with regard to gender and cultural background. As the chain has

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the power to unite the world, operations and working practices cannot be seen to be exclusionary.

3.

Start-Ups

Given the modern supply chain worker needs to have a demonstrable understanding of technology, this has opened the field for technology experts to create their own start-ups and challenge the industry orthodoxy. The majority of new entrants tend to be working at integrating disparate parts of the chain, especially in the freight forwarding domain, and while there are many of them, we will see some grow well beyond the ‘start-up’ size and having a big influence on data transmission and benchmarking standards. In fact, it could be argues many have already gone beyond start-up status, but simply keep the term because of its marketing friendly appeal. One thing we are beginning to see with such start-ups is the development of transparency around prices, allowing real time comparisons. The last-mile has also become a fecund area for development in this regard, as it allows the matching of capacity with delivery needs.

4.

International Trade

5.

Environment & Sustainability

While the US-China trade war will have an indirect impact on logistics, with bulk of it taken by shipping primarily, the logistics centre could see growth in areas that are becoming tied in to wider international supply chains. The biggest of these is China’s One Belt One Road (OBOR) initiative, also often entitled the Belt & Road Initiative (BRI), which could see new logistics centres opening up and old ones closing in key regions. This is especially the case with regard to China and the EU, where rail offers an alternative that’s faster than sea freight and cheaper than airfreight. A lot of the potential developments with regard to logistics depend upon the development of free trade agreements (not something that’s easy in a Western world that’s edging closer to protectionism), clarification on international standards and regulations, on-going globalization and the huge importance of infrastructure development.

The environment will be a major issue in 2020 with key sectors facing new demands for sustainability. This is where logistics can utilise the wave of digitalisation and automation to its advantage, pointing to the clean operational standards with regards to automation. The big issue logistics faces is trucking, still one of the world’s most common jobs, however, with autonomous trucks supposedly on the horizon, rail an increasingly viable option, and new fuels in the pipeline, logistics can make significant strides in the right direction if it has to. The aforementioned port-centric logistics also offers huge savings on emissions, as it slashes the requirement for truck journeys to a central sorting depot. To really make this work it may well require a lot of collaboration with ports and airports, as well as some forward thinking governments and civil engineers/port planners, but it is something that we’re likely to see more of. Finally, the incredibly futuristic 3-D printing also holds massive potential. While not widely practiced as yet, it has the ability to hugely impact logistics for the better, however, there will be the issue of job losses again if this becomes so, re-emphasising the importance for logistics leaders to have a clear future strategy in that regard.


REVIEW & OUTLOOK

TECHNOLOGY IN THE SUPPLY CHAIN AN OUTLOOK TO 2020

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here are two big technologies to address firstly in this outlook, blockchain and hyperloop, and once these have been addressed this piece will go on to look into other burgeoning technologies in the supply chain. At present, we sit at the cusp of another big technological step, with the advent of AI and 5G upon us. Research in this area has been eager to stress not so much how these advances will change our processes as how they will change the very tools we use to create and control processes. On that note, 5G looks set to be as fast as lightening, meaning by its very nature will create a strong demand for new tools, software and gadgets. AI is also rocketing ahead in terms of its capability, already outstripping the human capacity for mathematical equations and logical processes, albeit without the essential creative power that makes man so ingenious. Whether robots will catch us up in this regard remains to be seen, however, it will not in the foreseeable future, with much of the predictions for viable future occupations revolving around those that require management skills and creative decision making.

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However, before we look at these advances this piece will firstly overview the present state of blockchain, followed by an insight into hyperloop.

Blockchain Blockchain has moved from becoming potential future technology to something you need to have a strategy for. Many different alliances and players in the chain are striving to develop their own bespoke systems, usually comprising of a big name supply chain expert with a big name computing firm (such as Maersk and IBM). However, while the technology is yet to become fluent and operational, many in the chain are keeping a close eye as to when the opportunity to pounce will develop. So what’s the current state of play? Well, most blockchain creators are claiming blockchain can step in and provide the world with a fully functioning, untraceable digital ledger, yet evidently not everyone agrees, as the technology has been tested but not adopted as yet. Further, the technology is hitting the familiar roadblock of standardisation and competing forms of blockchain. Henceforth, instead of the development of one overall blockchain with neutral international standards, many are

completing their tests in exclusive siloes meaning it is hard to forge a collective push in making blockchain a widely adopted reality. On this very note, it is telling that the leaders in the field are also competing cloud-based service providers, now looking to offer BaaS (blockchain as a service). Such companies include: Microsoft Azure, Amazon Web Services (AWS), IBM Cloud and Oracle Blockchain. On top of these major providers, opportunities are also developing for start-ups to create ‘agile’ add-ons to the core services.

Hyperloop After many years of planning and theorising, we seem to be ready for hyperloop at long last, with 2020 seeing operational projects in Dubai and Saudi Arabia. Hyperloop visionary Elon Musk has also stated he wants to see hyperloop ready and working by 2020, with the technology looking to transport people in high-speed pods across rail and in underground tubes. Musk outlined his plan for 2020 after the Technical University of Munich set a new record for the fourth year running regarding hyperloop speed.


Artificial Intelligence

Its pod reached 463km/h (288mph) on a current test tube in the US, which runs for 1.6km straight. While this is behind the incredible 700mph quoted speed, and wasn’t on a curved track, it does show progress is being made.

5G Dubai is also at forefront of the developments in 5G, looking to have the next-gen network of the future ready by the World Expo 2020, which is being held in Dubai. 5G has the potential to be the most disruptive force seen in centuries and already the 5G market is being predicted to grow from US$31 billion in 2020 to $11 trillion by 2026 (according to a study from ReportsandReports). Of course, the potential of 5G stretches far beyond the supply chain and is going to lead to developments in military operations and social interactions. The key markets 5G is expected to influence encompass virtualization, cloud, edge, and functional splits. Furhter, as 5G networks come on line in 2020, they require increasing sophistication from mobile operators. The challenge going forward in mobile network buildout, therefore, is to bring together a growing number of LTE and 5G radio access technologies, with a range of connectivity services needed. 5G is famously the core driver behind realising true IoT, so could well see the development of a digital economy, self-driving cars, delivery drones, smart traffic lights, and smart connectivity of sensor enabled edge devices.

While autonomous ships are touted as bringing a new level of safety, accidents will always happen, and the industry needs to know who will be ultimately responsible

Artificial intelligence really comes into its own with regard to predicting the future of supply chain-based processes. Such technology allows planners to set rates, plan productivity levels, and improve the already impressive machine learning. Machine learning algorithms are being constructed to do the work a human brain cannot and see trends in data exceptionally quickly, thereby putting right errors and anomalies in real time. Advances we’ve witnessed so far in this regard include Amazon’s Kiva robotics and DHL’s Predictive Network Management system (that analyzes 58 different parameters of internal data to identify the top factors influencing shipment delays). The technology is coming in so quickly that by 2020 Gartner has predicted that 95% of supply chain planners will be using machine-learning technology. Perhaps the greatest benefit of AI will come in its real-time ability to rectify errors and highlight future potential dangers. This potential becomes especially powerful when 5G (and the attendant IoT) is thrown into the mix as in such a landscape smart devices and organizations will be able to communicate and make better, faster decisions. Further, many of these decisions may well even be taken by AI, and if not, will surely present executives with new decision-making capability. This level of exposure over the supply chain offers the world great advances in efficiency, cost-savings, environmental protections and optimal working practices.

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From International to Local Why ‘Made in UAE’ is the future

A perspective from Amer Bin Ahmed, Managing Director of KNAUF Middle East and India

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CONTENTS

“The UAE offers unparalleled trade routes to expanding economies”p45 “Industrial Diversification has also been of major importance to the Abu Dhabi Government”p46 42

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Introduction

How important is Manufacturing to the UAE?

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What is the signif icance of ‘Made in UAE’?

How international manufacturers can embrace ‘Made in UAE’?

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4

What are the challenges facing manufacturers within the UAE?

International Inspiration

How do we move forward?

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4 - From International to Local

Introduction


“The UAE offers unparalleled trade routes to expanding economies”

I

n 2008, KNAUF Middle East took the decision to manufacture locally. This was a bold decision, as our traditional means of business was producing the material in Europe and running sales operations locally. However, as the market changes, so must the way we do business. It was obvious to us that we needed to invest more into the region that had given us so much, and help drive the UAE manufacturing sector. ‘Made in UAE’ hasn’t just been driven by my philosophy of creating German quality within the UAE. The UAE offers unparalleled trade routes to expanding markets as well as world-class inf rastructure. It is the best location to operate in and export f rom. However, how do we go about bringing more international companies to the UAE, and have them manufacture locally? As part of the long-term vision of the UAE, it is of paramount importance that we drive the industrial diversif ication of the UAE economy. In order to do this we need to create an environment that not only powers Emirati born companies to succeed, but is also an attractive proposition for international companies to invest their long-term manufacturing objectives in. This report will analyze why manufacturing is vital to the UAE economy, while outlining the strengths that the UAE has to offer to international companies. It will highlight the importance of quality and why it should be a central theme to UAE exports, as well as share some of the f irst hand issues that need to be addressed when relocating a business to the UAE. Finally, a summary of how we can move forward collaboratively is provided in outline.

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2

Why is manufacturing so vital to the UAE economy?

T

he diversification of the UAE economy is a key goal to the long-term performance of the UAE. It is important to diversify the economy for a number of reasons, with the fundamental one being that a major part of the UAE economy, namely hydrocarbons, is only a finite resource. What is often misunderstood is that manufacturing is already a critical pillar of the economy: for example, there are around 6,300 factories operating in the UAE. Manufacturing is already the second most powerful growth driver of the UAE economy, bringing in around 10% of GDP annually. The UAE is committed in reducing its dependence on the oil sector, which is expected to gradually decline over the next decade. Reports such as the Abu Dhabi Chamber of Commerce & Industry’s ‘Manufacturing Industries’ show that oil production is accountable for 39% of the UAE’s GDP, with over 61% coming f rom non-oil-based sectors.

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THE MOST IMPORTANT NON-OIL COMMODITY EXPORTS 2017 THE MOST IMPORTANT NON-OIL COMMODITY EXPORTS 2017 The Most Important Commodity in terms of the Value of Non-oil Exports of the UAE 2017 (in AED billion) The Most Important Commodity in terms of the Value of Non-oil Exports of the UAE 2017 (in AED billion) HARMONIZED DISCRIPTION CODE

VALUE

71.08 HARMONIZED Gold (including DISCRIPTION CODE

51.5 VALUE

71.08 76.01 71.13 76.01 71.13 24.02

51.5 20.1 16.5 20.1 16.5 11.5

24.02 39.01 27.1 39.01 27.1

74.08 17.01 74.08 73.08 17.01 73.08 39.02

gold plated with platinum), in raw, semi·processed or powder form Gold (including gold plated with platinum), in raw, semi·processed or Unwrought aluminum (raw). powder form Jewelry and parts thereof, of precious metals or of common metals clad Unwrought aluminum (raw). with precious metals Jewelry and parts thereof, of precious metals or of common metals clad Thick rolls (Cigar} of all kinds. cigarillos and common rolls (cigarettes) with precious metals made of tobacco or its substitutes. Thick rolls (Cigar} of all kinds. cigarillos and common rolls (cigarettes) Ethylene polymers. in their primary forms made of tobacco or its substitutes. Petroleum oils and oils extracted from processed continental minerals; Ethylene polymers. in their primary forms preparations not elsewhere specified or included, containing at least Petroleum oils and oils extracted from processed continental minerals; 70% of petroleum oils or continental mineral oils of its weight, provided preparations not elsewhere specified or included, containing at least that these oils constitute the main component of these preparations, and 70% of petroleum oils or continental mineral oils of its weight, provided waste oiL that these oils constitute the main component of these preparations, and Copper wires waste oiL Sugar cane or sugar beet and chemically pure sucrose, in solid form. Copper wires Structures (other than prefabricated buildings of heading 94.06) and Sugar cane or sugar beet and chemically pure sucrose, in solid form. parts of Structures (for example, bridges. bridge sections. gates of dams, Structures (other than prefabricated buildings of heading 94.06) and towers, masts, roofing, roofing structures, doors and windows and frames parts of Structures (for example, bridges. bridge sections. gates of dams, thereof. door sills, handrail, of iron or steel), plates, rods and angles. towers, masts, roofing, roofing structures, doors and windows and frames Propylene polymers or other olefins, in their primary forms. thereof. door sills, handrail, of iron or steel), plates, rods and angles.

Source: Authority. Federal Competitiveness and Statiscic.s Auchoriry, Ministry of Economy. 39.02FE’Ceral Customs Propylene polymers or other olefins, in their primary forms.

11.5 9.1 4.8 9.1 4.8

4.5 3.2 4.5 2.4 3.2 2.4 2.2 2.2

Source: FE’Ceral Customs Authority. Federal Competitiveness and Statiscic.s Auchoriry, Ministry of Economy.

“It is clear that the UAE is positioning as a “It is clearmanufacturing that the UAE is major drivermanufacturing of the economy’” positioning as a major driver of the economy’” Although these figures are expected to fluctuate due to rebounding oil prices, they reflect the level of ecoAlthough these figures are expected to fluctuate due nomic diversification already prevalent within the to rebounding oil prices, they reflect the level of ecoUAE. The UAE economy is expected to expand in the nomic diversification already prevalent within the manufacturing, construction, transshipment and UAE. The UAE economy is expected to expand in the financial services sectors. manufacturing, construction, transshipment and Expanding the Manufacturing sector would increase financial services sectors. foreign direct investment into the UAE. This directExpanding the Manufacturing sector would increase ly increases job creation, entrepreneurship, ease of foreign direct investment into the UAE. This directdoing business and overall disposable wealth for both ly increases job creation, entrepreneurship, ease of businesses and individuals. It is not only manufacturdoing business and overall disposable wealth for both ers that stand to benefit from this success but also terbusinesses and individuals. It is not only manufacturtiary and service-based businesses of the UAE. ers that stand to benefit from this success but also tertiary and service-based businesses of the UAE. The logistics sector in particular gains significantly from increased exports from the UAE, as do the freeThe logistics sector in particular gains significantly zones, insurance providers and financial institutions. from increased exports from the UAE, as do the freeIt is for these reasons that manufacturing is such a zones, insurance providers and financial institutions. key component of the 2030 vision, which outlines It is for these reasons that manufacturing is such a the importance of diversification, outlining a gradual key component of the 2030 vision, which outlines reduction of reliance on the oil sector, with a greater the importance of diversification, outlining a gradual focus on knowledge-based industries. reduction of reliance on the oil sector, with a greater focus on knowledge-based industries.

It is clear that the UAE is positioning manufacturing as a major driver of the economy. The UAE, is particularly It is clear that the UAE is positioning manufacturing as focused on metals, building materials, petro-chemia major driver of the economy. The UAE, is particularly cals and chemicals, pharmaceuticals, food and beverfocused on metals, building materials, petro-chemiage, aerospace and defense, as well industrial equipcals and chemicals, pharmaceuticals, food and beverment. age, aerospace and defense, as well industrial equipment. Major investment from Mubadala and other Abu Dhabi based partners has also seen the Emirate drive Major investment from Mubadala and other Abu Dhamanufacturing within the aerospace and defense secbi based partners has also seen the Emirate drive tors with innovative companies such as YahSat (Abu manufacturing within the aerospace and defense secDhabi’s satellite company) and Strata (aerospace), tors with innovative companies such as YahSat (Abu thus combining scale with innovation and positioning Dhabi’s satellite company) and Strata (aerospace), Abu Dhabi as an area of excellence. thus combining scale with innovation and positioning Abu Dhabi as an area of excellence. Industrial diversification has also been of major importance to the Abu Dhabi Government. Abu Dhabi Industrial diversification has also been of major imporrecently announced an AED50 billion economic stimtance to the Abu Dhabi Government. Abu Dhabi ulus package targeted at increasing FDI into the Emirrecently announced an AED50 billion economic stimate. This has included relaxing laws on foreign ownulus package targeted at increasing FDI into the Emirership and creating an investor friendly environment ate. This has included relaxing laws on foreign ownfor foreign businesses. Jamal Salem Al Dhaheri, CEO ership and creating an investor friendly environment for foreign businesses. Jamal Salem Al Dhaheri, CEO TRANSPORTANDLOGISTICSME.COM 47 From International to Local -

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“Industrial Diversification has also been of major importance to the Abu Dhabi Government”

of SENAAT outlined that the Abu Dhabi Government attracted over AED108 billion in FDI in 2017, and has targeted a 10% increase Y-o-Y. Dubai has also heavily invested in industrial diversification. The Emirate launched its Dubai Industrial Strategy 2030 to elevate Dubai into a global platform for knowledge-based, sustainable and innovation-focused businesses. The strategy itself is focused on increasing the total output and value-addition capacity of the manufacturing sector and to make Dubai a preferred manufacturing platform for global businesses, focusing on energy efficient and sustainable manufacturing. Dubai has outlined 75 initiatives to bring this about and has targeted an additional AED160 billion to be produced by 2030 as a result. The Dubai economic

THE MOST IMPORTANT PARTNERS OF NON-OIL EXPORTS 2017 The most Important Partners in terms of the Value of Total Non-oil Exports of the UAE 2017 (in AED billion)

COUNTRY

VALUE

PERENTAGE OF THE TOTAL %

India Turkey Saudi Arabia Oman Iraq The United States Kuwait China Singapore South Korea Total of the top 10 partners Remaining Overall total

19.3 16.6 15.0 13.6 8.5 7.9 6.4 5.6 5.5 4.6 103.0 86.8 189.8

10.2% 8.7% 7.9% 7.2% 4.5% 4.2% 3.4% 3.0% 2.9% 2.4% 54.3% 45.7% 100%

TRANSPORTANDLOGISTICSME.COM 8 48 - From International to Local

department has also been heavily investing to increase FDI and promote Dubai based commodities overseas. Ras al Khaimah, Fujairah and Sharjah have also invested in incentivizing manufacturers and bringing more to the region, having grown their transport infrastructure and freezone capacities to aid this. Local manufacturing mitigates the risks of disruption in any supply chain, by removing external factors associated with cross-border supply, and protecting financial investments of all stakeholders. This is particularly important for the UAE. Logistics and communication are among the many known factors that can cause disruption when importing a product, however understanding and complying with local regulation is something that is often overlooked, but this is mandatory for the success of any product supply here in the UAE. The dynamic nature of the UAE and its forward thinking vision - means that a ‘finger on the pulse’ and an active engagement in the country is essential. Sustaining a successful supply chain allows investment to feed back into local businesses, and the citizens of the UAE. With the import and export of goods continuously rising in the UAE, increased local manufacturing will reduce the need for imported goods, reduce import costs, whilst increasing the export of locally manufactured goods, thereby generating greater revenue for the local economy. This will in turn increase demand for resources and offer job opportunities, especially for local UAE nationals. It is evident then, that the UAE is entirely committed to driving the manufacturing sector. With major government grants, as well as the continued commitment of all parties, we can expect to see manufacturing to continue being a major part of the UAE economy.


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What is the signif icance of W ‘ MhAaDt Ei sI Nt hUeA E ’ ? signif icance of ‘MADE IN UAE’? ‘Made in UAE’ is a campaign launched by the UAE Government that is tasked with increasing the credibility of UAE manufacturers, while helping to reduce ‘Made in on UAE’ is a campaign launched reliance imports and increasing the by the UAE Government that is tasked UAE’s export potential. with increasing the credibility of UAE manufacturers, helping to reduce ‘Made in UAE’ iswhile a unified national mark reliance on imports and increasing the that classifies and recognizes the prodUAE’s export potential. ucts/goods manufactured in the UAE. This initiative allows UAE manufactur‘Made UAE’ is label a unified national mark ers to in add this to their products, that classifies and recognizes the prodguaranteeing to the customer that the ucts/goods the excelUAE. product is manufactured of high qualityinand This initiative allows UAE manufacturlence. ers to add this label to their products, guaranteeing to the customer thatUAE, the However, as a manufacturer in the product is of high quality and excel‘Made in UAE’ is of even greater signiflence. icance. However, a manufacturer in the UAE, ‘Made in as UAE’ represents the funda‘Made in UAE’ is of even greater signifmental aspect of creating a sustainicance. able country, supporting a vision that

is bringing change and development ‘Made represents the fundaacross in all UAE’ sectors, while setting key mental aspect of creating sustainobjectives for social and aeconomic able country, supporting a vision that development. It is the central approach is bringing change and development to ensuring the protection and preseracross all sectors, while setting key vation of the environment and natural objectives for social and economic resources, ensuring safety and quality development. It is the central approach of life, and creating stability within the to ensuring the protection and presersupply chain. vation of the environment and natural The UAE has become more and more resources, ensuring safety and quality independent and self-sufficient, and of life, and creating stability within the has a good wealth of knowledge supply chain. amongst the manufacturing sector The UAE has become more and more through both local and expatriate perindependent and self-sufficient, and sonnel. has a good wealth of knowledge amongst the manufacturing sector ‘Made in UAE’ will help create more through both local and expatriate peropportunities for success, although this sonnel. success depends on the UAE’s capacity to continue attracting skilled and tal‘Made in UAE’ will help create more ented people and nurturing the brightopportunities for success, although this success depends on the UAE’s capacity to continue attracting skilled and talented people and nurturing the bright-

est minds to generate innovative ideas. If we can collaboratively push the message of quality within the UAE, we can also successfully build trust and value in est to generate innovative ideas. theminds international community. This will If we can collaboratively push the directly increase the success andmesvalsage quality within the UAE, we can ue of of our products locally. In short, the also successfully build trust and value vision to create an export hub havingina the international community. will reputation for quality products This and serdirectly increase the success and valvices. ue of our products locally. In short, the vision toiscreate an export hub having a Quality a perceptual, conditional, and reputation for quality products and sersomewhat subjective attribute that vices. may be understood differently by different people. Therefore it’s crucial that Quality is a perceptual, conditional, and the product is defined as being suitable somewhat subjective attribute that for its intended purpose, while satisfymay be understood differently by difing customer expectations. Anything ferent people. Therefore it’s crucial other than this reflects badly on that the the product is defined as being suitable manufacturer. for its intended purpose, satisfy“Made in UAE” should be awhile hallmark for ing customer expectations. Anything good quality. other than this reflects badly on the manufacturer. The UAE has strong environment for “Made UAE” should beespecially a hallmarkwith for testinginand regulation, good quality. initiatives such as Dubai Central Laboratory and Abu Dhabi Quality ConThe UAE has strong environment for trol Authority that independently tests testing and regulation, especially with quality and performance. We need to initiatives such as Dubai Central Labmarket this to international communioratory and Abu Dhabi Quality Conties so products and materials from the trol Authority that independently tests UAE can be trusted and used with conquality and performance. We need to fidence. market this to international communities so products and materials from the ‘Made in UAE’ is more than just a stanUAE can be trusted and used with condardization process, it is a label of quality fidence. and of trust, encapsulating innovation and diversification and the commit‘Made in UAE’ is more than just a stanment of the UAE to create world class dardization process, it is a label of quality manufacturing solutions. By presentand of trust, encapsulating innovation ing this image of ‘Made in UAE’, interand diversification and the commitnational manufacturers will see this as ment of the UAE to create world class an additional benefit in operating from manufacturing solutions. By presentthe UAE. ing this image of ‘Made in UAE’, international manufacturers will see this as an additional benefit in operating from TRANSPORTANDLOGISTICSME.COM 49 the UAE. From International to Local - 9


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There are already significant success stories of industrial diversification within the UAE.

Emirates Global Aluminum, Strata, Borouge, and Senaat, for example, are all world-leading manufacturers. However, to achieve true economic diversification, we must focus on inspiring new UAE manufacturers within high growth sectors to locate to the UAE. Major organizations such as Unilever have shown that this is possible. The same is true of our organization, Knauf. However, such a strategy entails a necessarily long-term financial commitment to the region. This is what we must now focus on: how do we make the UAE more attractive to international manufacturers? Knauf made this decision as a strategic part of a global business; the UAE is a centralized location for distribution across the GCC region as well as the wider export region. Aside f rom the obvious advantages of being

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centrally located, the vibrant and demanding market (as well as a world-class ecosystem of legal and financial advisory support), for a company with a focus on research and development and integrating advanced technology into the manufacturing process, offered huge potential for growth and development. It is important for the UAE to continue to promote its world-class manufacturing facilities and to offer unparalleled solutions for trade and shipping. With major ports in the UAE implementing the latest technologies to maximize efficiency, the UAE is a strong location to conduct exports. It is critical for the UAE to position these excellent facilities as a benefit for exporters, rather than focusing on import and transshipments. The same is true of the UAE’s geographical location. Traditionally, the UAE has been a trading zone and a major center for commerce, yet also a fantastic platform to supply other countries. With developing economies in Af rica and the Middle East, as well as the power of the GCC and India, the UAE serves as

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a model country to manufacture and export. With major investment in KIZAD and Dubai South, as well as existing facilities in JAFZA, RAKEZ and Hamriyah, the UAE offers world-class solutions to international manufacturers. We are seeing significant investment from Chinese businesses opening manufacturing facilities in KIZAD, and are now seeing some of the world’s most innovative organizations, such as Amazon, partner with Dubai South. What is exciting for the international manufacturer is that the UAE is offering more than just a strong geographical location as it is investing heavily into firstrate inf rastructure for exporting. Dubai South has recently launched major new initiatives focusing on e-Commerce, while positioning the UAE as a world leader for the next generation of international manufacturers. Reducing reliance on imported materials is a critical factor to creating a sustainable economy. This is especially true in our industry of building materials.

Considering the benefits f rom an environmental perspective, less movement of material results in a reduced carbon footprint and is more environmentally f riendly. This should be a vital consideration for all exporters in a world of increasing stakeholder awareness and activity. It also creates local demand for resources and raw materials that are required to support a manufacturing facility. When accomplished with the support of an international company, likely with a wealth of knowledge and expertise in their field, the result can eliminate political and logistical obstacles, as well as developing the social sustainability of the country through creating jobs and training the workforce in a specialist trade. This means that markets can be effectively supported by local employees who engage with end users of a product and help with further product development. All this together creates a positive impact on availability, affordability and quality of products and services. From an operational perspective, establishing a local manufacturing facility has reduced associated logistical costs and resources spent in importing f rom Europe or Asia. It has increased product availability, improved delivery times and adapted our product range to support the particular requirements of the UAE market. All benefits that can be directly passed on to our customers, while reducing waste incurred in the process of importing. Local presence of people and plants means that we can take a proactive approach in meeting the market demands. It also enables our products and systems to gain full compliance with the local regulations and be in line with the future vision of the UAE. For the wider business, innovation that has been born from demand in the UAE market has also opened new product streams, which are now being exported back into European regions. Manufacturing locally has greatly benefitted us. It has given us greater flexibility to respond efficiently to distribution in local markets, shorter lead times, less vulnerability to global market fluctuations and reduced inventory accumulation and cost. The UAE offers great options for international manufacturers. We have major investments f rom the Government, we offer low taxes, have readily available goods and labor as well as offering one of the most secure environments to do business internationally.

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What are the challenges in attracting more International Manufacturers to the UAE?

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here are already significant success stories of industrial diversification within the UAE.

Emirates Global Aluminum, Strata, Borouge, and Senaat, for example, are all world-leading manufacturers. However, to achieve true economic diversification, we must focus on inspiring new UAE manufacturers within high growth sectors to locate to the UAE. There are a number of areas that need to be addressed if we are going to achieve the various goals that have been set out.

UAE manufacturers face the same issues as manufacturers in other parts of the world. Protecting payments, fluctuating rates of exchange and global economic downturns affect all exporters internationally. However, there are areas that the UAE can further develop to bring in more FDI. There has been argument in the past that information on business establishment, banking, VAT, freezone rules and labor laws, currently fragmented across authorities and Emirates, could be centralized. Such proposals are not without merit. For those not used to operating in the UAE, multiple layers of legal framework and documentation requirements can initially prove daunting. Governments across the world are constantly looking to ease the process of attracting business and the UAE is not alone: any efforts to introduce closer collaboration across the various economic departments, with perhaps a more singular position, would be readily audible by the international community. The UAE’s embrace of innovation has been incredible. It is exciting to see that innovation has been enthusiastically implemented by manufacturers in the UAE with big data, automation and robotics, all taking center stage. We need to focus on this sense of innovation while inviting manufacturers to the region. 52

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UAE manufacturers are a vital part of economic diversification, but the UAE could also focus on promoting successful international companies manufacturing locally. This will directly inspire other manufacturers to do the same. Manufacturing doesn’t have to be about subsidizing, it is important for the UAE to promote both it’s own manufacturers as well as international. They are both ultimately ‘Made in UAE’. Here are some of the challenges that we faced directly on this journey. Introducing a relatively new construction material into a market already established with other more traditional methods, presents a unique set of challenges, aside f rom establishing a global brand and developing a market. The fundamental objective of any global manufacturer is providing a quality product, fit for the needs of an end user, while adapting a product range and a manufacturing facility to comply with local regulation and to suit requirements of an international customer base. This requires adoption to the vision of the country you are servicing, along with a commitment, financially, through investment in plant, equipment and product development, and socially through investing in people and empowering a workforce with skills that will ultimately contribute to nation building. Being a company that was used to manufacturing mainly in the European markets it was a big change when operations began in the UAE. We had to develop products to conform to the American (ASTM) standards, an unknown territory for Knauf. We needed to quickly educate ourselves with these norms and adapt our manufacturing capabilities to meet these new requirements. It has taken significant time and many hours of research, development and testing. Looking back, it was a great learning curve, which today has placed us as one of the top manufacturers of Gypsum products and a leading R&D organization for ASTM products and standards. However it was a large commitment, and to an extent, a risk entering uncharted territory. The UAE also faces stiff competition f rom Saudi Arabia, which has launched a number of major economic initiatives to increase exports. The UAE must protect itself f rom ‘foreign dumping’ where companies dramatically lower their prices within the UAE. The UAE has also had an issue in skilled labor, especially engineers. However, following successful training programs this has become less of a problem. TRANSPORTANDLOGISTICSME.COM

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International Inspiration of Diversif ication ‘KNAUF has recently been awarded by the Ministry of Economy its off icial ‘Made In UAE’ certif ication, promoting internationally that KNAUF produces its materials locally.’

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here have been several strong examples of states driving forward their manufacturing sector to further power their economy. This has been particularly prevalent in Europe since the recession. The UK in particular has invested heavily into driving their export market, and has several government policies in place to help this. Finland has also adopted economic diversification and has transformed itself f rom a ‘forest and industrial’ economy to a world leader in innovation and technology. By creating the correct environment socially as well as economically, Finland has had huge success on the international stage and is a good example of successful economic diversification.

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Conclusions and advice to international manufacturers looking at coming to the UAE

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ade in UAE’ is a statement of intent. It helps us as manufacturers to increase trust with our customers while marketing the UAE as a manufacturing hub. Its meaning, however, goes further than that. ‘Made in UAE’ represents the future for the UAE economy, an economy that is diverse, innovative and quality focused. It brings together all key stakeholders of the UAE economy and drives us collaboratively towards a more prosperous future. In order to achieve this, it is critical that we market the UAE as an excellent location for more international manufacturers to come and embrace ‘Made in UAE’. We must position the UAE, collaboratively, as an excellent option for relocation and FDI, presenting the UAE as the best location f rom which to supply regional markets. The UAE has been phenomenal in driving new agendas, especially in digital transformation and attracting foreign investors and international manufacturers. What is critical to the continued growth of the manufacturing community is to present ‘Made in UAE’ as a genuine label of quality and high standards. By presenting this initiative, and tying it to the huge investments within infrastructure, technology, standards and transport, we can make ‘Made in UAE’ a major commodity for international manufacturers. It needs to be more than national pride, it is not just about how

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proud we are about producing material with ‘Made in UAE’ on it, but the impression it gives to the customers overseas: what does ‘Made in UAE’ mean to them? Does it represent innovation, quality and high standards? This is what we must focus on and build upon. In terms of the advice that could be offered to international manufacturers looking to come to the UAE, these are some important things to keep in mind.

Amer Bin Ahmed, Managing Director of KNAUF Middle East and India.

Engage in a quality management framework and apply it to products and processes, this may be true in all regions but the UAE consists of multiple languages, cultures and backgrounds and it is important to bring this all together.

Respect local regulatory requirements for any product avenues. The authorities in the UAE are an excellent resource of support and can help with launches and initiatives, but you must ensure that everything complies with UAE regulations.

Research and innovate, some of our greatest returns f rom manufacturing in the UAE is the knowledge we gained in testing and producing products specifically for new markets.

Practice sustainable business methods that respect environmental, social and economic implications of the business and the region. This is about synergy, working together with the region and seeing it as an opportunity to create.

Finally, do research the regulations related to setting up a business in the UAE. There are many options within the country and each of them have their own unique advantages. This is a long-term commitment, and you need to select an option keeping that in mind. The UAE is strategically located between Asia, Europe and Af rica, which is a great opportunity for any new business looking to expand both in the UAE and in foreign regions. Chinese businesses use Dubai as a hub for trading with Af rica and Indian traders use the Emirate to access the rest of the world. This only suggests that the UAE is becoming a central hub for connecting the world, making it the perfect location for any company to start their manufacturing operations.

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Q&A p58 GLOBAL ISSUES p60 AIR CARGO p62 SEA CARGO p64 LOGISTICS p66

NEWS ROUND-UP

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Q&A How would you review 2019 in logistics? Interview with Carlos Font, Shipa Freight CEO

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The global economy has been slowing down over the course of the last year. As well, new and updated regulations are forcing companies and logistics providers to change how they engage in international trade. In 2019, technology has evolved faster than ever before, and innovation is being propelled by start-ups. Businesses, especially these start-ups, are investing in key technology areas, such as artificial intelligence, robotics (RPA) and networked ecosystems that provide real-time visibility and automation. Customers are also demanding speed and cost efficiencies in their supply chains. As well, SMEs are gaining more weight in international trade – but are still underserved in the current logistics environment. 30% of international trade is carried out by SMEs, yet according to Shipa Freight’s Ship for Success report, 94% have faced difficulties when shipping internationally. Given these trends, Shipa Freight has been focused on streamlining the shipping process and making it easy for companies to ship internationally. We are seeing an increasing number of customers trusting Shipa Freight for their international trade, globally.

Where do you see the most potential for

In 2020, companies will continue to 2020? look for better and quicker access to structured data, get interconnected with their ecosystem for instant visibility, and continue in the race for automation, analytics and artificial intelligence. Additionally, in international shipping, there is an incremental need to quickly adapt to evolving regulation and compliance requirements. The rise of customer expectations is forcing companies to respond much quicker to client´s demands. The B2B environment, where most logistics and freight forwarding companies fall, is being heavily influenced by the B2C customer experience and quickly rising the customer expectations. Additionally, the company profiles gaining more weight in international shipping are SMEs. These companies live and breathe in the “customer experience” economy. Therefore, the most potential for 2020 sits with logistics companies that earn the trust of customers by significantly reducing complexity in the international shipping, being transparent and allowing for collaborating with partners digitally and are reliable and compliant in the service delivery. And that’s where Shipa Freight comes in. Shipa Freight uses advanced technology, such as AI and RPA in providing real time air and ocean quotes and manage shipments completely online at unprecedented scale. Additionally, since Shipa Freight is anchored on the global network of Agility, is able to guarantee a compliant and reliable service door to door.


What do you think Sustainability looks set

67%

to be the buzzword of 2020, how are you doing

Sustainability is definitely not just a buzzword of SMEs in the UAE are focuscleaner supply chain? for Shipa Freight. ing on export markets more The unfortunately than their home market reality is that global trade is powered by fossil fuels, which are a major contributor to greenhouse gas emissions. It is critical for the long-term health of our business invested by Agility that we measure and reduce our to the Shipa platform emissions as much as possible, as well as manage other sustainability risks around air pollution and waste. Agility and Shipa Freight are How do you see working hard to get greener, including partnering with customers to the Middle East reduce supply chain emissions. We see a great opportunity to use data taking the lead and digital technology to optimize supply chains, minimizing the in logistics in the number of trips and total distance covered across a network, which future? reduces fuel usage and emissions. We incorporate sustainability features into our warehouses and investing The Middle East is strategically located in renewable energy sourcing and as an ideal gateway for commerce generation wherever it make sense. coming from Asia and from the Most importantly, Agility engages West. As well, the region has all the across our industry in groups like ingredients needed to lead the world the Clean Cargo Working Group, the of logistics and digitalization: a Sustainable Air Freight Alliance, and growing e-commerce and retail sector, the Global Maritime Forum to make the availability of free trade zones, sure we’re up to date with innovations funding initiatives in private and public in the industry, playing our part, sectors, the continued investment in and contributing our thoughts as an infrastructure and most importantly emerging market logistics leader. the rapid adoption of technology. But SMEs in the region face difficulties. According to Shipa Freight’s Ship for Success report, 67% of SMEs in the UAE are focusing on export markets more than their home market, and 73% said they need to export more or they won’t grow. Shipa Freight aims to make logistics simpler for SMEs and businesses in the region. Agility, our parent company, has invested more than $100 million into the Shipa platform, which consists not only of Shipa Freight but also delivery and e-commerce platforms. With the Middle East’s logistics strengths and the new technologies Agility and Shipa Frieght are investing in, it’s becoming easier for small businesses to reach overseas markets.

100m

$

your part in creating a

of the potential of

The use of the digital digital technology technology, and AI, in and AI in logistics, particular give us the ability does it excite you or to optimize decisions, analyze vast worry you? amount of data from multiple sources, structure information and make that information accessible. This represents a phenomenal opportunity to use these tools to provide transparency, reduce complexity in logistics and, specifically in shipping, to drastically reduce costs. In practical terms, Shipa Freight is able to provide competitive pricing, reduce processing lead times of our clients (such as classifying products, providing 24/7 availability, enable collaboration and guarantee compliance through the end-to-end process), all while giving transparency and certainty to each of our clients. Having said that, Shipa Freight is excited about these developments in technology and applicability in the industry. But, more importantly, we are excited that we are enabling our clients to leverage best in class digital tools, regardless their size. These tools are available for everyone – from large multinationals to small, local businesses. Given the value of digital tools, there is a gradual migration to online shipment bookings. Online bookings are expected to reach 20% of bookings by 2023, and we are happy to see that more and more clients trusting Shipa Freight for their international trade.

Sustainability is definitely not just a buzzword for Shipa Freight. The unfortunately reality is that global trade is powered by fossil fuels, which are a major contributor to greenhouse gas emissions” TRANSPORTANDLOGISTICSME.COM

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NEWS

GLOBAL ISSUES

VIRGIN HYPERLOOP ONE TO INVEST ‘US$4 BILLION’IN SAUDI ARABIA Virgin Hyperloop One (VHO) is anticipated to pile in a potential US$4 billion into Saudi Arabia as it strives to make hyperloop transportation a reality.

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he investment will create an estimated 124,000 jobs by 2030, the year Saudi Arabia’s 2030 vision becomes a reality. The news follows a study conducted by VHO and the Saudi Economic City Authority, which Sultan Ahmed bin Sulayem, DP World group chairman and chairman of VHO recently commented on. He said: “The study highlights that hyperloop is more than a high-speed connectivity for passengers and cargo. The findings have shown a positive alignment between the project and Saudi Arabia’s ambitious national economic and social development agenda. “With this in mind, we are delighted to highlight this vision at the Future Investment Initiative and continue our

talks with a multitude of stakeholders.” Jay Walder, VHO’s CEO, said: “This strategic partnership in Saudi Arabia is a result of a shared ambition to harness the power of technology to drive the next leap forward in transportation. “It’s a market that has shown a readiness to embrace transformative innovation to achieve the goal of sustainable, energy-efficient travel that will have a huge impact on the economy and wider society.” “This study sets the framework for the advancement of Virgin Hyperloop One’s system, and the creation of a new and unique ecosystem; creating jobs, supporting [the] development and connecting people across the Kingdom.”

UAE JOINS UN INDUSTRIAL DEVELOPMENT BOARD The United Arab Emirates has won membership to the Industrial Development Board (IDB) - one of the main policy organs of the United Nations Industrial Development Organization (UNIDO). 60

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he UAE’s membership marked the culmination of a successful week where the Ministry of Energy & Industry hosted the 18th UNIDO General Conference, presiding over five days of progress, developments and renewed determination towards 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs). In joining 53 other IDB

members elected for a fouryear term on a rotational basis with voting rights, the UAE will now play a key role in reviewing the implementation of the work programme, overseeing the regular and operational budgets. The IDB meets once a year. The UAE’s accession to the IDB came on the last day of the UNIDO General Conference, which was held at Emirates Palace Abu

Dhabi from 3-7 November 2019. Uniting member states under the theme of ‘Industry 2030 – Innovate. Connect. Transform our Future’, the conference also saw a number of high-level sessions complementing a main agenda focused on themes including: Youth and Entrepreneurship, Gender, Industry 4.0, Sustainable Energy, Industrial Parks and the Circular Economy.


UAE-Brazil Trade Hits Huge New Levels

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ubai mutual trade with Brazil in 2018 made around AED5.6 billion, with AED 5.2 billion in imports, AED136 million in exports and AED234 million in re-exports, representing one of Dubai’s key global relationships. Statistics, released by Dubai Customs in conjunction with the visit of the Brazilian President, Jair Bolsonaro to the UAE, showed that trade with Brazil touched AED3.6 billion in the first half of 2019, with AED3.4 in imports, AED56 million in exports and AED 93 million in re-exports. “Dubai trade with South American countries, especially Brazil, is noticeably growing,” said Ahmed Abdul Salam Kazim, Director of Strategy and Corporate Excellence Department at Dubai Customs. “We do our best to deliver the best customs services and facilities to the Brazilian companies following the directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai to promote mutual trade and development between the two countries. “We look forward to more cooperation with Brazilian companies and diplomatic missions in the coming period which will see Dubai host EXPO 2020 and that makes a golden opportunity for companies to get global attention and recognition.” He added: “Dubai is a global trade hub which can help Brazilian companies explore new opportunities and promote their trade activity with other countries. “Visits of heads of states to the UAE can help enhance economic ties in fulfilment of the directives of our leadership of turning Dubai into a top choice and a hub that connects regional and international markets through bold projects such as the Dubai Silk Road.”

DUBAI BOOSTS SMART CITY CREDENTIALS WITH INITIATIVE As part of the Smart Cities Global Network (SCGN) initiative and in collaboration with the Australian Trade and Investment Commission (Austrade), Smart Dubai has hosted the second in a series of networking events titled ‘SCGN Talks’ at its headquarters in the Dubai Design District (d3). Baring the theme ‘Data for Better Cities’, the session explored various approaches to delivering data science that benefits cities, supports the digital transition towards smart cities of the future, and enables publicprivate partnerships to build a data marketplace that wields a positive impact on the community. The event follows a successful inaugural ‘SCGN Talks’, which took place in March 2019 in collaboration with the Swedish Trade and Invest Council – Business Sweden, and explored the concept and prospects of a cashless society. Smart Dubai’s Director General Her Excellency Dr Aisha Bint Butti Bin Bishr said: “As the government entity tasked with transforming Dubai into the world’s happiest and smartest city, Smart Dubai is committed to organising events that bring together international experts and decision makers to focus on and explore key elements in smart-city

building. “With that in mind, we launched the Smart Cities Global Network to be the largest international network of smart-city stakeholders.” H.E. Ian Halliday, Consul General of Australia to Dubai, and General Manager of Austrade for the Middle East, Africa, and Turkey, followed and said, “It was great to showcase Australian smart cities and data capability at the Smart Dubai Global Smart Cities Network, a platform that will further enhance collaboration across our two countries.” “Australian experts from the government, education and private sector shared their experience in the design and implementation of data-centric technology solutions to improve the productivity, efficiency and liveability of future cities. “As Australian cities and Dubai continue to grow a vibrant smart cities ecosystem in a digital economy, there is a strong need to foster greater partnerships with key players in urban transformation and promote digital innovation to ensure smart cities are citizen-centric. “There is a great opportunity for the UAE and Australia to complement each other, leveraging on each other’s strengths to co-develop smart urban solutions.”

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AIR CARGO

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IATA Identifies Priorities for MENA Aviation In short, the four priorities are (full outline listed below): • • • •

Cost competitiveness Infrastructure Harmonized regulation Gender diversity

Alexandre de Juniac, IATA's Director General and CEO, said: "The direction of the global economy is uncertain. Trade tensions are taking their toll. “The [MENA] region is at the nexus of conflicting geopolitical forces with real consequences for aviation and airspace capacity constraints have become more extreme. But people want to travel and economies in MENA are thirsty for the benefits that aviation brings."

Cost-competitive Operating Environment IATA highlighted the need for low-cost infrastructure for airlines in MENA. With de Juniac stating: “Some airlines in the region are doing well, but overall Middle East carriers are expected to lose US$5 per passenger this year—far below the global average of US$6 profit per passenger. “Low-cost infrastructure is essential. Our message to governments is simple: 62

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Gender Diversity

THE INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) HAS CALLED ON GOVERNMENTS AND INDUSTRY IN THE MIDDLE EAST AND NORTH AFRICA (MENA) TO FOCUS ON FOUR PRIORITIES TO SECURE THE FUTURE OF AVIATION IN THE REGION AGAINST THE BACKDROP OF A CHALLENGING OPERATING ENVIRONMENT.

follow ICAO principles, consult users with full transparency and recognize that rising costs have longterm negative consequences. Aviation’s benefits are in the economic activity that the industry catalyzes, not in the tax receipts it generate.,”

Infrastructure IATA also recognized the foresight of governments in the region in developing airport infrastructure and urged them to harness the power of technology to ensure that the infrastructure operates efficiently for airlines and conveniently for passengers. “MENA governments have understood that infrastructure investments are needed to capture aviation’s economic and social benefits,” said de Juniac. IATA called on the region to continue to take a leading role in using technology to drive improvement in the passenger experience, highlighting recent projects at airports in Dubai, Doha and Muscat that use biometric technology. The projects are aligned with industry’s One ID vision for biometric identification which enables paperless travel.

Harmonizing the Regulatory Environment IATA stressed the need for regulatory harmonization across the industry and urged governments to implement the global standards that they have agreed to. • Safety: De Juniac called on regulators in the region to use the IATA Operational Safety Audit (IOSA) to complement their own national safety oversight activities. Bahrain, Egypt, Jordan, Lebanon, Kuwait, Iran and Syria have already done so. The safety performance of airlines on the IOSA registry is three times better than airlines not on the registry. • Consumer Protection Regulations: De Juniac raised concerns over the proliferation of disparate consumer protection regulations in the region and called on Arab states to follow ICAO guidance. • Boeing 737 MAX: De Juniac called on a united approach by regulators to help rebuild confidence in the Boeing 737 MAX as efforts continue to ensure a safe return to service.

IATA finally called for airlines in the region to support the recently launched 25by2025 Campaign. Alexandre de Juniac said: “It is no secret that women are under-represented in some technical professions as well as in senior management at airlines. It is also wellknown that we are a growing industry that needs a big pool of skilled talent. “If we don’t engage the female half of the world’s population much more effectively, we won’t have the needed people power to grow.” The 25by2025 Campaign is a voluntary program to address the airline industry’s gender imbalance. Participating airlines commit to increase the number of women at senior levels and in key positions by 25% or to a minimum of 25% by 2025. From MENA Qatar Airways and Royal Jordanian have already taken up this commitment.

Building a Sustainable Future IATA also addressed climate change and spoke about the industry’s efforts to cut its emissions. Alexandre de Juniac called on governments in the region to support the industry’s goal of capping carbon emissions from 2020 by participating in CORSIA—the Carbon Reduction and Offsetting Scheme for International Aviation—from the initial voluntary period. “We must make CORSIA as comprehensive as possible from the voluntary period. In this region only Saudi Arabia, Qatar and the UAE have signed-up,” he said, adding, “This will cover most of the anticipated growth, but still we must encourage more states to join the effort.”


Middle Eastern airlines

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iddle East freight volumes decreased 8.0% in September 2019 compared to the year-ago period - the sharpest drop in freight demand of any region. Capacity decreased by 0.4%. Escalating trade tensions and the slowing in global trade have affected the region’s performance due to its strategic position as a global supply chain link. Most key routes to and from the region have seen weak demand in the past few months. The large Europe to Middle East and Asia to Middle East routes were down 8% and 5% respectively in August (last data available) compared to a year ago. Alexandre de Juniac, IATA’s Director General and CEO, said: “The US-China trade war continues to take its toll on the air cargo industry. October’s pause on tariff hikes between Washington and Beijing is good news. “But trillions of dollars of trade is already affected, which helped fuel September’s 4.5% year-onyear fall in demand. And we can expect the tough business environment for air cargo to continue.”

DXB WELCOMES 64.5 MILLION CUSTOMERS IN FIRST NINE MONTHS OF 2019

Dubai International, DXB, maintains its position as the world’s busiest hub for international passengers with traffic reaching 64.5 million passengers in the first nine months of 2019.

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ccording to a Dubai Airports press release a total of 23,217,492 passengers travelled through DXB in the third quarter (-2.4% YoY), bringing the year to date traffic to 64,495,241 (-4.5% YoY). The slight contraction in year to date numbers is mainly the result of the closure of one of DXB’s two

runways for 45 days for a runway rehabilitation project during MayApril, as well as the impact of the worldwide grounding of Boeing 737 Max aircraft since March this year. DXB handled a total of 636,575 tonnes of cargo in the third quarter (-5.9% YoY) taking the year to date figure to 1,886,237 tonnes, down 4.1%. A bulk of the cargo traffic at DXB is belly-hold which was impacted by reduction in capacity during the runway rehabilitation project. With 97,498 flights recorded in the third quarter, the year to date flight numbers reached 275,882, down 9.9% from last year.

PASSENGER DEMAND CONTINUES TO INCH UPWARD The International Air Transport Association (IATA) announced Middle East passenger traffic results (measured in revenue passenger kilometers or RPKs) for September 2019 showing a year-on-year increase of 1.8% in September, which is a slowdown from a 2.9% rise in August.

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apacity was up just 0.2%, with load factor climbing 1.2 percentage points to 75.2%. International traffic growth continues to be affected by a mix of structural challenges in some of the region’s large airlines, geopolitical risks and weaker business confidence in some countries. Globally, demand climbed 3.8% compared to the same month last year, broadly unchanged from August’s performance. Capacity (available seat kilometers or ASKs) increased by 3.3%, and load factor climbed 0.4% percentage point to 81.9%, which was a record for any September.

Alexandre de Juniac, IATA’s Director General and CEO said: “September marked the eighth consecutive month of below average demand growth. “These are challenging days for the global air transport industry. Pressure is coming from many directions. In a matter of weeks, four airlines in Europe went bust. Trade tensions are high and world trade is declining. “The IMF recently revised down its GDP growth forecasts for 2019 to 3.0%. If correct, this would be the weakest outcome since 2009, when the world was still struggling with the Global Financial Crisis. “Given the environment of declining world trade activity and tariff wars, rising political and geopolitical tensions and a slowing global economy, it is difficult to see the trend reversing in the near term.”

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SEA CARGO

MAERSK & BMW TO CREATE NEW SHIP FUEL FROM ALCOHOL World’s largest shipping line Maersk and automobile giant BMW Group, along with clothing giants H&M Group and Levi Strauss & Co, have announced plans to explore a new fuel made from ethanol (alcohol) called LEO in a bid to create green shipping.

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EO is a mixture of lignin - a structural bio-polymer which contributes to the rigidity of plants - and ethanol. British high-end clothing and food manufacturer Marks & Spencer are also said to be involved in the research. Collectively, the companies involved have named themselves

the ‘LEO Coalition’ to explore the environmental and commercial viability of LEO fuel for shipping. Craig Jasienski, Chief Executive Officer of Wallenius Wilhelmsen, BMW’s parent company, said: “Our customers’ ambitions on sustainability are increasing rapidly, and we applaud this development. “Clearly, LEO would be a great step forward for supply chain sustainability, and it has the potential to be a viable solution for today’s fleet, and not just a future vision,” The LEO Coalition hopes to move into testing stages on active vessels as soon as 2020.

Lloyd’s Warns of US$100 Billion CyberAttack Danger One cyber-attack could cost the major Asia-Pacific ports up to US$110 billion in damages, according to a new report from London-based insurance provider Lloyd’s.

T RISING SHIPPING COSTS HIT AMAZON PROFITS Amazon has revealed its Q3 results showing another quarter of sales growth above 20%, however, rising shipping costs have hot the global giant affecting its bottom line.

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mazon has revealed it spent almost US$10 billion on shipping costs, a huge figure that is up 46% from 2018. The rising costs come with renewed turbulence in shipping, as well as Amazon’s commitment to its Prime service, which aims to deliver one-day shipping around the world. Amazon boss Jeff Bezos is said to be steadfast that despite the challenges and affects to the

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bottom line, that Amazon Prime is the best way forward. Mr Bezos is quoted as saying: “It’s a big investment, and it’s the right long-term decision for customers.” Despite Amazon Prime proving tricky, Bezos’s tactics have seen him take Amazon to the very top of e-commerce and become one of the - if not the, according to some polls - richest men (man) in the world. Amazon has increasingly looked to involve themselves deeper and deeper into the supply chain in recent years, taking actions such as registering as a shipper and crafting a new drone delivery strategy.

hese findings have been released in a report generated by the University of Cambridge Centre for Risk Studies and looked at a network of 15 major Asian ports and the effects of a cyber-attack. The study created a hypothetical attack in which a software virus could scramble the cargo database logs at major ports. The report noted that while this would have major effects, the true cost would be felt in delays and repairs in the chain that would be felt worldwide. According to the report, transportation, aviation, and aerospace sectors would be the most affected, incurring an estimated $28.2 billion in total economic losses. The manufacturing industry also could see losses of $23.6 billion, while retail would clock $18.5 billion in economic losses.


Maersk Pilot Next-Gen Green TEU Vessel Battery A containerized 600kWh marine battery system will be installed in a trial on board the Maersk Cape Town in December 2019 to improve vessel performance and reliability while reducing CO2 emissions, according to the world’s largest liner.bottom line.

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aersk has been in the news recently regarding new sustainable fuels after looking into the viability of alcohol as a green ship fuel (see below). “This trial will provide a greater understanding of energy storage that will support Maersk in moving towards further electrification of it’s fleet

and port terminals. Maersk will continue to facilitate, test, and develop low-carbon solutions on our journey to become carbon neutral by 2050,” explained Søren Toft, Maersk COO. Propelling marine vessels with battery power alone is still years away from being a technically- and economically viable option. However marine battery systems can be used to improve the efficiency of a vessel’s onboard electrical systems such as the Maersk Cape Town’s generators. By maintaining the vessel’s auxiliary generators at a more optimal load, and avoiding running generators when not needed, overall fuel consumption can be reduced.

Additionally, it will support the generators with up to 1,800 kVA of power during rapid changes in electrical load such as thruster operation. This can reduce generator maintenance requirements. The battery system is also capable of providing redundant power, which can improve reliability at sea by ensuring continuous power supply. The Maersk Cape Town includes a waste heat recovery system, which is a special feature of many Maersk container vessels. This system increases overall efficiency, as it allows the batteries to charge by capturing electrical energy from heat that would otherwise have been lost out of the exhaust gas system for the main propulsion. “This exciting pilot – the first of its kind in the industry - will show the potential of battery technologies to keep improving the performance of our vessels while also reducing fuel consumption in our non-propulsion electrical systems,” reinforces Ole Graa, Maersk Head of Fleet Technology. The containerized battery energy storage system has been manufactured in Odense, Denmark by the system

integrator and turnkey supplier Trident Maritime Systems. The battery system will be shortly transported to Singapore and installed onboard the Maersk Cape Town. The vessel is a Singaporeflagged 249-meter long container ship built in 2011 which sails between West Africa and East Asia. The first full voyage with the new system in place will take place next year and will be closely monitored to evaluate the performance of the system against the trial’s ambitions. Battery modules will be operating within the container in conjunction with other electrical and control components. Maersk has also worked in close collaboration with the American Bureau of Shipping - the vessel’s classification society – to ensure safety and compliance. The application of battery technology and the understandings gained can enable further innovation across A.P.Moller- Maersk. We have an interest in working with suppliers to grow these possibilities as the technology matures.

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LOGISTICS

UPS MAKES BIG PUSH FOR E-COMMERCE BUSINESS UPS has unveiled a strategy to make industry-leading logistics services more broadly available through a series of strategic alliances and agreements called the UPS Digital Access Program.

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s the retail industry continues to transform, UPS has prioritized e-commerce growth by enhancing its network and services to enable faster deliveries, enhanced visibility and a broader range of delivery options. Online business-to-business and business-to-consumer transaction growth shows no signs of abating. eMarketer estimates global e-commerce gross merchandise value will grow from US$3.5 trillion today to US$6.5 trillion by 2023. This has a tremendous impact on the shipping industry due to package volume growth while driving the digitization of the entire e-commerce

value stream, from inventory procurement to order management, delivery and returns. With the UPS Digital Access Program, UPS is establishing preferred relationships with leading digital platforms to enhance various aspects of the e-commerce value stream. These platforms seamlessly provide discounted UPS shipping rates and other shipping and logistics solutions to their merchant customers. Kevin Warren, Chief Marketing Officer at UPS said: “By embedding UPS natively into popular e-commerce platforms, merchants will get the breadth and reliability of UPS’s services to more than 220 countries and territories. “More small and mediumsized businesses (SMBs) will now have access to UPS, helping them offer industry-leading delivery

commitments and leveling the highly competitive e-commerce playing field.” The UPS Digital Access Program helps e-commerce platforms provide a comprehensive suite of order management, fulfilment and delivery services to simplify logistics complexity. This gives SMBs the opportunity to provide the same high-quality customer experience as large e-commerce companies. As part of the Digital Access Program, UPS has signed an agreement with Stamps.com, the leading provider of e-commerce shipping software, to offer discounted shipping rates to Stamps. com’s customer base of more than 740,000. Stamps.com offers a portfolio of Internet shipping software solutions under the brand names ShipStation, ShippingEasy, ShipWorks, Stamps. com and Endicia. These solutions help small and medium-sized e-commerce businesses run their shipping operations more smoothly and successfully. With the Digital Access Program, Stamps.com customers now have the option to easily access UPS’s shipping services at discounted rates.

MIDDLE EAST ON VERGE OF SMART CITY NETWORK Smart cities in the Middle East and Africa (MEA) are set to grow and grow with consistent growth predicted in the near future, according to a report by KPMG released at the recent sixth Annual Arab Future Cities Summit (AAFCS).

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he AAFCS took place in Dubai and looked at several key issues in the Middle East, noting especially the region’s

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efforts to become a global leader in smart cities, with Dubai being at the forefront. The supply chain is central to the smart city vision of the Middle East, as enabling fast, digitized trade allows nextgeneration technologies such as the Internet of Things (IoTs) and artificial intelligence (AI) to expand and develop. Rémi Pouchucq,

Business Development Manager for the MEA, with Schneider Electric said: “Large investments are going into technologies that enable smart cities, and the UAE has set itself as a benchmark for smart city innovation in the region. “With urbanization moving at its current pace, developing solutions that tackle issues in terms of energy, safety, mobility,

sustainability and overall wellbeing remain at paramount importance to us at Schneider Electric. “Thanks to the numerous government-led initiatives, businesses and individuals are becoming increasingly aware of new gateways that technology opens for them, helping them identify and respond to the critical need to be planet- and profitabilitycompatible.”


Richmond Bulk Transport LLC is headquartered in Dubai, UAE and focused on offering safe, prompt and reliable transportation and logistics services in the Middle East.

We specialize in Petroleum & Chemicals logistics and undertake road transportation from within UAE to all other countries in the Gulf region. We operate Road Tankers, Trailers & Pickups of various capacities, capable of transporting a wide range of products from Fuels, Bitumen, Base Oils, Solvents and Admixtures.

richtrans.ae


NEWS

Dubai RTA & FedEx Agree ‘Roxo’ Robot of the Future Launch Dubai’s Roads and Transport Authority (RTA) and FedEx Express, a subsidiary of FedEx, have signed a Memorandum of Understanding (MoU) for the autonomous delivery device Roxo™ to have its international debut in Dubai.

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hmed Hashim Bahrozyan, CEO of Public Transport Agency, signed on behalf of RTA and James R. Muhs, Regional President for FedEx Express in the Middle East, Indian Subcontinent and Africa, signed on behalf of FedEx Express. The signing took place at the Dubai World Trade Centre. Ahmed Hashim Bahrozyan said: “We are proud that Dubai will be the future host of the delivery device Roxo™ for the first time outside of the United States. “This step complements the UAE AI Strategy, Dubai SelfDriving Transport Strategy, and RTA’s first strategic goal: Smart Dubai. “This autonomous personal delivery device will play a new role in the last-mile delivery challenge as it is designed to travel on sidewalks and along roadsides, safely delivering smaller shipments to customers’ homes and businesses.” Roxo™ is an autonomous personal delivery device with features including pedestriansafe technology from the iBot plus advanced technology such as LiDAR and multiple cameras, allowing the zero-emission, battery-powered bot to be aware of its surroundings. These features are coupled with machine-learning algorithms to detect and avoid obstacles, plot a safe path, and allow the bot to follow road and safety rules. Proprietary technology makes it highly capable, allowing it to navigate unpaved surfaces, curbs, and to even climb some steps for an extraordinary door-to-door delivery experience. 68

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DUBAI LAUNCHES ‘WORLD LOGISTICS PASSPORT’ Dubai has officially launched the first World Logistics Passport as part of the first phase of the new Dubai Silk Road strategy.

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he World Logistics Passport is anticipated to offer new levels of efficiency and savings, connecting shippers, liners and government entities with logistics service providers. The move solidifies Dubai’s reputation as one of the most innovative areas for digitalized trade in the world. The passport is thought to be a vital foundation of the Dubai Silk Road, Dubai’s plan to widen its reach and smoothen out its global supply chain connections. The Dubai Silk Road takes its name from the famous Maritime Silk Road made famous by China as it includes its push to be the preeminent name in the movement of global trade. Crown Prince of Dubai and

Chairman of the Dubai Executive Council Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum said Silk Road strategy “marks the beginning of a new phase of economic growth” that will further boost Dubai’s position as a global economic and business hub. The Crown Prince added that the Dubai Silk Road renders the UAE ready for developments in international trade by offering new state-of-the-art logistics services using the latest smart applications. Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority, said: “Dubai’s sophisticated logistics services will further enhance its value offering for investors and businesses by saving time and effort and reducing their operational costs. “This is a powerful tool that will eventually lead to increased revenues. We are keen to offer investors and businesses new advantages in conducting global trade.”


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CONNECTED WORLD. This has fuelled the need for security solutions that can operate in this world. G4S invests in the people, skills and technology needed to provide customers with industry-leading solutions that help you operate safely, reliably and efficiently in a connected world.

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