Global Supply Chain July August 2015 Issue

July/August 2015 Issue 17

ENHANCING THE BUSINESS OF LOGISTICS

KEEPING

TABS How RFID is transforming the logistics industry

Country report - UAE The only way is up!

Driving business

Volvo trucks’ driver courses

Globe Express Services Growing with the country

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Technology - the future SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3978847/3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Director: Deepak Chandiramani Deepak@signaturemediame.com Managing Editor: Munawar Shariff munawar@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

Printed by United Printing Press (UPP) – Abu Dhabi Distributed by Tawseel Distribution & Logistics – Dubai

Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused.

Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

When we speak of technology in the logistics and supply chain industry, the most prominent area of technology is RFID. This tag is used in all aspects of the supply chain and the technology enhances it by creating an end to end visibility solution for both clients and customers. One of the latest aspect of this technology is that it now allows bulk scanning at high distances and speed. Ultra High Frequency (UHF) adoption is growing, and new applications usually require UHF frequency, unless there are special environmental conditions, like water, to mitigate, or singular item interaction is required in production environments. Near Field Communication (NFC) is also driving RFID acceptance, and putting the technology at the forefront of end users – with millions of mobile readers (smart devices) in the hands of consumers. Read more on page 21.

On the same thread of technology, the greatest challenge faced by logistics operators is knowing what’s happening ‘out there’ in their extended supply chains.

This is not a simple exercise, because supply chains involve a number of different activities, including procurement, manufacture, transport, distribution and delivery. Within some of these activities, precise, immediate and granular data is available to operators and managers, helping them to control activities and respond to unexpected events. However, they usually exist as ‘islands’ of clarity within a sea of uncertainty. Therefore, attempting to establish a view of the entire supply chain is frequently impossible, due to disconnects, incompatibility and inaccurate or non-existent data flows. It’s fair to say, that the most accurate description of most supply chain activities is that they are ‘Invisible’. How does this change? The article on page 41 - Mobile customer engagement has more in depth details.

We’ll see you in September as the regional world breaks away for the summer! Keep writing.

Munawar Shariff Managing Editor munawar@signaturemediame.com

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July/August 2015 Issue 17

ENHANCING THE BUSINESS OF LOGISTICS

20 34

06 News 12 Country report - UAE The only way is up Supply logistics are a huge investment in the running of any business, and the UAE plans to keep that investment in the country by providing the best options to investors.

20 Keeping tabs Eric Suligoj, Director, Business Development, HID Global – Industry & Logistics, tells us how RFID technology is transforming the industry.

34 Keeping up with the times

They say location is everything.

Mustapha Kawam, President and CEO, Globe Express Services, talks to GSC about how being located in the UAE was right for business.

40 Keeping the

customer engaged

With smartphones becoming an integral part of our daily life, the technology can now be applied to supply chain logistics to establish a transparent and efficient system.

28 Taking in the technology 48 Rail – Connecting Rami Kichli, Vice President, Software AG, Gulf & Levant, talks to GSC about the importance of adapting to new technology, and what we can look forward to in the future.

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the country

A GCC connected by rail in the next three years.

52 Aviation industry going

from strength to strength

Even as IATA predicts a positive outlook for 2015, the stark differences in the region, and globally, can have very different effects.

56 In space and beyond International aerospace and space experts will convene in Abu Dhabi next March at the third Global Aerospace Summit.

58 Driving business Volvo trucks offers one of the broadest range of driver courses in the industry.

60 Community Giving back a little Tristar Group launches first-ever Global CSR Week.

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RTA and DNATA launch Phase 2 of Sky Bus

RTA’s Public Transport Agency DNATA, in collaboration, has launched Phase 2 of the Sky Bus initiative branded as Terhab. The project links Dubai International Airport’s Terminal 1 with DANATA’s offices in Jebel Ali and Muhaisna, to transport passengers departing from these two districts to Dubai Airports, free of charge.

Adel Shakri, Director of Planning & Business Development, RTA’s Public Transport Agency said,“The underlying

objective of the initiative revolves around nurturing a strategic partnership between DNATA and the RTA towards realising a host of joint objectives highlighted by making people feel happier. Buses deployed to run this service are attractively designed, so as to look welcoming to passengers arriving through Terminal 1 and 2. Moreover, these buses have ample room for accommodating bags without impacting the basic specifications of the vehicle.”

Etihad Cargo increases freighter services to Africa Etihad Cargo has increased its freighter services to Africa with the launch of a cargo only service from Abu Dhabi (AUH) to Maya Maya Airport, Brazzaville (BZV), in the Republic of Congo.

Operating twice weekly using a

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Boeing 777F freighter aircraft, the new service will fly to Brazzaville via Lagos airport (LOS) in Nigeria. The freighter has a capacity of 100 metric tonnes, and will transports tools, machinery, general

cargo, electronics and project equipment.

Brazzaville is the Republic of Congo’s capital and largest city, and a key political, economic and transportation hub in Central Africa.

Kevin Knight, Chief Strategy and

Planning Officer at Etihad Airways, said, “Our new freighter service will allow us to capitalise on trade between the Republic and the UAE, and better connect Africa with markets in Europe, the Middle East and Asia”

Farnek wins new multi-million dirham service contracts Farnek has signed two new high profile multi-million dirham contracts with Oracle and UAE-based Place Management, to provide cleaning, maintenance and support staff at key locations in Dubai. Farnek’s three-year contact with Oracle’s Middle East Head Office, located in Dubai Internet City, includes housekeeping services, the provision of office attendants and customer-facing office staff. The oneyear contract with strata company, Place Management will cover the total FM requirements for its Global Lakeview Tower building in the Jumeirah Lake Towers area of Dubai, including MEP, preventive maintenance strategies, general cleaning, façade maintenance and lifeguard services.

The agreements will engage around 75 of Farnek’s cleaning, maintenance

and service staff, all of whom have been trained to the latest international standards, issued by The British Institute of Cleaning Science (BICSc), at Farnek’s state-of-the-art training facilities at its Al Quoz headquarters in Dubai.

Air Arabia named Best Lowcost Airline in the Middle East Air Arabia has been named the Best Low-cost Airline in the Middle East at the annual Skytrax World Airline Awards, which took place at the Paris Air Show this year.

This is the second time in three years that airline has won the coveted award, following its previous victory in 2013.

The world’s largest airline passenger satisfaction survey is conducted every year to decide the winners of the Skytrax World Airline Awards. The Award for the Best Low-Cost Airline is based upon an assessment of customer satisfaction of the product and staff service standards provided by the airline in both the cabin and airport environments. Said Adel A Ali, Group CEO, Air Arabia,“Winning the Skytrax award is particularly pleasing as it is based on levels of customer satisfaction, which is the criteria Air Arabia values above all others.”

Turkish Airlines to open new air routes to Austria and Germany Travellers from the Middle East can now fly to Graz in Austria and Baden–Baden in Germany this year on Turkish Airlines. The flights, which stop over at Istanbul, enable passengers to enjoy a much-needed break in Istanbul’s Ataturk Airport before they fly onwards on the long-haul flight to Europe.

With existing services to Vienna and Salzburg, Turkish Airlines’ flight to Graz will be its third destination in Austria. The flights will be operated four times a week on Monday, Wednesday, Thursday, and Saturday, in both directions.

Additionally, with existing services to 13 other destinations, Turkish Airlines’ flight to Baden-Baden is its 14th destination in Germany. Istanbul-Baden-Baden flights will be operated four times per week as roundtrip.

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Daikin launches VRV IV High Ambient System in the GCC

Etihad Flight College orders Embraer Phenom Jets Etihad Flight College, a wholly-owned subsidiary of Etihad Airways, the national airline of the United Arab Emirates, has signed a purchase agreement for four Embraer Phenom 100E aircraft, and options for three additional aircraft of the same model. The deal is valued at about US$ 30 million (AED 110182500), based on current list prices, if all options are exercised, and deliveries of the aircraft to Etihad Flight College will start in Q1 2016.

The delivery of the four new Embraer

Phenom 100E aircraft will bring to 20 the number of aircraft in the trainer fleet, which also includes 10 Cessna 172SP Skyhawk and six Diamond DA42NG aircraft.

The Etihad Flight College is the first organisation in the world to use multiengine aircraft in the core phase of its innovative Multi-Crew Pilot Licence (MPL) training programme, ensuring students are provided with the core competencies required of an airline pilot in today’s everchanging aviation marketplace.

Daikin Middle East & Africa has launched the fourth generation of VRV IV for high ambient markets. VRV IV achieves a new benchmark for efficiency, as it features major enhancements to the already industry-leading VRV solution.

VRV IV offers three revolutionary innovations: variable refrigerant temperature (VRT), Refrigerant – cooled PCB, and the VRV configurator for simplified commissioning.

Daikin has been continuously setting the standards for climate control since it first introduced the VRV technology in 1982. More than 40 per cent of the VRF systems installed in GCC are Daikin VRV systems. The unique VRT technology allows VRV IV heat pumps to respond to cooling requirements by continually monitoring the required capacity and weather conditions.

The VRV IV core technologies result from over 50 patents related to the Compressor, Condenser Coil, and most importantly, the Refrigerant –Cooled PCB, which adds reliability at the high ambient temperatures in the GCC.

Imdaad awards fleet maintenance contract to Emirates Transport Imdaad, a leading provider of integrated facilities and waste management solutions in the GCC, has announced the signing of a threeyear contract with Emirates Transport, the UAE’s leading operator of transport and maintenance services, for comprehensive maintenance and repair of its fleet of vehicles and equipment. The contract was signed between Imdaad’s CEO Jamal

8 JULY/AUGUST 2015

Abdullah Lootah, and Mohammed Abdullah Al Jarman, General Manager of Emirates Transport.

According to the terms of the agreement, Emirates Transport will take over management of all fleet maintenance operations for Imdaad, offering complete vehicle maintenance and repair services.

The auto services division of Emirates Transport operates 52 workshops, and employs 1,850 mechanics and technicians.

SITA delivers robust business results to the air transport community

Manoj Papa, Chief Executive Officer Air Seychelles, and Minister Joël Morgan, Chairman Air Seychelles accept the Indian Ocean’s Leading Airline Award at the World Travel Awards.

Air Seychelles named ‘Indian Ocean’s Leading Airline’ at WTA Air Seychelles, the national airline of the Republic of Seychelles, has been recognised with three highly-prized accolades at this year’s World Travel Awards (WTA), including the title of ‘Indian Ocean’s Leading Airline’, at a prestigious event in Seychelles. For the second consecutive year, Air Seychelles was also awarded ‘Indian Ocean’s Leading Airline - Business Class’ and ‘Indian Ocean’s Leading Cabin Crew’.

The annual World Travel Awards recognise the very best travel and tourism organisations in the world, with the winners being decided through a global voting system by more than 500,000 travel professionals and high-end tourism consumers from 171 countries.

Joël Morgan, Seychelles Minister for Foreign Affairs and Transport and Chairman of Air Seychelles, said: “On behalf of the Government of Seychelles I congratulate the team for winning three of the highest accolades at the Indian Ocean World Travel Awards and further strengthening the reputation of Air Seychelles as a leading airline.

Said Manoj Papa, CEO of Air Seychelles, “Winning three World Travel Awards was a proud moment for Air Seychelles and validates that the business model is working and the investment in the airline is sound. By focusing on people, product and partnerships, we are overcoming the challenges faced by the airline in the past few years.”

SITA has announced 2014 revenues of US$ 1.7 billion (AED 6243675000). This consolidated group revenue, a rise of 4.3 per cent from 2013, keeps the organisation on its growth trajectory.

The results, confirmed at SITA’s Annual General Assembly (AGA), show the company’s solid business performance and growth. These were enhanced by strong sales performance, a sound cash balance, a low level of debt and continued favourable customer feedback, and loyalty scores highlighting the focus SITA places on its community and customers.

Electronics and IT sector in Jafza generated double digit trade in 2014 Jafza has seen double digit growth in the electronics and IT sector at the Free Zone. More than 1200 companies currently operate in the sector at the Free Zone, who are estimated to have generated trade worth over USD 38 billion (AED 139564500000) in 2014. In terms of volume of trade, electronics and IT is one of the largest sectors in the Free Zone.

Talal Al Hashimi, Chief Operations Officer of Economic Zones World (EZW), the parent company of Jafza, said, “The sector’s growth in the region

is mainly driven by increasing disposable income, expanding population, growing tourist inflow, rapidly growing internet penetration, and strong distribution capability of key players like Jafza.

The introduction of Dubai Smart City initiative by His highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has already provided major boost to internet-enabled devices market in the UAE. We must capitalise on the emerging opportunities.”

Francesco Violante, CEO of SITA, said: “SITA has made advances in the critical areas of portfolio developments, service excellence and collaborative innovation with our members and the wider air transport community.

SITA continues to invest in our operations, service quality and our people, which together position us to reach our strategic 2020 vision.”

JULY/AUGUST 2015 9

Quebec Airport and Sita put Apple Watch to use Air transport IT specialist, SITA, and Québec City Jean Lesage International Airport (YQB) has unveiled the world’s first use of the Apple Watch™ for an airport workforce. The airport will use the watches to connect to the SITA Airport Management solution, which is already in use at the airport, to push regular operational alerts to duty managers and ensure operations run smoothly.

Marc-André Bédard, Vice President, Information Technology, Aéroport de Québec, said, “We are always looking for new technology to help enhance our operations, and ultimately better serve our passengers. Wearable tech is one area of interest to us, and with the Apple Watch and SITA’s Airport Management solution our duty managers will receive important notifications at just the right time to take action as needed.”

The SITA Lab team built the application for the airport and conducted all the systems integration work to link the Apple Watch to the SITA Airport Management solution. SITA’s solution, which is in use at 150 airports in 48 countries, streamlines airport operations by enabling the airport to control all its operations from a single central control centre and adapt to an ever-changing environment. *Apple Watch is a trademark of Apple Inc., registered in the US and other countries

Airlines look to the promise of the ‘Internet of Things’ A SITA 2015 Airline IT Trends Survey states that the vast majority of airlines (86 per cent) expect that the IoT will deliver clear benefits in the next three years, and already more than one third (37 per cent) have allocated budget to it. The results of the survey show that IoT investments will be focused in the areas of check-in, bag drop and bag collection.

The ‘Internet of Things’ is when physical objects are connected to the internet, which enables tracking, data collection, analysis and control. As part of this revolution, more things in the airport are being connected up,

10 JULY/AUGUST 2015

including buildings, equipment, bags, trolleys, tugs – basically all the ‘things’ that could emit a status. In reality, however, because today the vast majority (83 per cent) of passengers carry smartphones, passengers and staff are connected and can be part of the IoT too.

All these things that are being connected will create immense amounts of data and both business intelligence (BI) and data centres are vital to extract the data’s value. Already 94 per cent of airlines are investing in BI, with 74 per cent planning major investment programmes by 2018.

SAP unveils SAP HANA Cloud Platform for Internet of Things SAP has launched the SAP HANA Cloud Platform for the Internet of Things (IoT), helping customers gain operational efficiencies and drive the creation of new revenue models, products and services. According to McKinsey & Company, businesses that embrace digital transformations could see increased revenue as much as 30 per cent. Enabling businesses to securely tap into a network of millions of connected devices, SAP has released the HANA Cloud Platform for the IoT, with IoT services from SAP planning to support the cost-efficient and quick development, deployment and operation of SAP solutions for IoT. Private cloud deployments intend to enable SAP customers to run their own device cloud or to operate a device cloud for their customers.

Leveraging their existing global strategic alliance, SAP and IBM announced cloud-tocloud integrations of the two companies’ industry-leading human resources software and services. The product integrations are expected to help customers improve their business processes and make fact-based decisions more smoothly and simply about how they recruit and manage their workforces.

In keeping with the SAPPHIRE NOW theme to reimagine business to Run Simple, SAP also announced new digitally native offerings, built for immediate personal consumption via a new online purchase experience.

Individuals, across large and small organisations, can now buy from SAP without the need for a purchase order, invoice or lengthy RFP process.

Joint venture for the development of Evonik’s Lülsdorf location Evonik Industries AG and Duisburger Hafen AG (duisport) are preparing to establish a jointly controlled company for the future development of Evonik’s Lülsdorf location. The 50:50 joint venture will continue to develop the premises that are available at the Lülsdorf site, and further optimise the existing on-site logistics.

Thomas Wessel, Chief Human Resources Officer of Evonik Industries AG, and Erich Staake, Chief Executive Officer of Duisburger

Hafen AG, signed the corresponding agreement in Duisburg earlier this year.“The joint venture is designed to provide incentives for other companies to set up operations at Evonik’s Lülsdorf site. This would create new workplaces and make a sustained contribution to the development of the North Rhine-Westphalia

growth region,” explained Wessel. The new joint venture between Evonik and duisport in Lülsdorf will go hand in hand with the strategic collaboration that the two partners established last year.

Momentive’s logistics centre opens with RSA – TALKE Momentive Performance Materials Inc. (Momentive) inaugurated their MEA logistic Centre in Dubai recently. The new Logistics Centre, located at RSA-TALKE’s facility in DWC’s Logistics City, will serve as a vital gateway to serve Momentive’s customers in the MEA region.

“Momentive is a global leader in silicones and specialty chemicals, and we are proud to serve them in our state-of-the-art chemical facility in Dubai, where we offer the highest international standards,” said Abhishek Ajay Shah, Director of RSA-TALKE. Richard Heath, also Director of RSA-TALKE, added, “Dubai is an increasingly important global hub for chemicals and Momentive has correctly identified the benefits of locating their Logistics Centre at RSA-TALKE for the benefit of their customers in the MEA region and beyond.”

“Momentive is committed to developing new applications that serve our global customer base,” said Dr. Ian Moore, Senior Vice President and Additive Sector Leader at Momentive.“The Logistics Centre in Dubai complements our sales offices and Technical Services Lab in Jebel Ali and positions us to bring enhanced value to our customers in this

(From left) Tsouli Lee – Director Global Logistics Momentive; Abhishek Ajay Shah - Managing Director at RSA Logistics and member of the board at the chemical logistics JV RSA-TALKE; Nalian, Momentive; Richard Heath, Director Middle East & Asia at TALKE and Director at RSA-TALKE; Jack Boss, President and CEO of MPM Momentive; Dr Eric Thaler, Sr VP and Sector Leader Additives, Momentive; and Dr Ian Moore, Sr VP, Momentive

fast growing region.”Dr. Moore attended the event along with Momentive President and CEO Jack Boss and Senior Vice President and Basics Sector Leader Dr. Eric Thaler.

“Momentive has stringent standards regarding safety, quality and compliance,” said Srikumar Ramakrishnan, Director

of Sales, MEA Region at Momentive.

“RSA TALKE has long standing expertise in chemical storage and logistics along with best-in-class processes for safety & automation. We expect that RSA TALKE will provide the highest quality service to our customers in this region.”

JULY/AUGUST 2015 11

up COUNTRY REPORT - UAE

The only way is

12 JULY/AUGUST 2015

COUNTRY REPORT - UAE

Supply logistics are a huge investment in the running of any business, and the UAE plans to keep that investment in the country by providing the best options to investors and business owners.

I

n December 2014, Dubai International Airport (DIA) emerged as the busiest airport in the world for crossborder passengers, surpassing London’s Heathrow airport, according to The Guardian, with 70.5 million international passengers, compared to 68.1 million at Heathrow. This was despite a reduction in traffic due to runway renovations, making it likely that Dubai will cement that position in the near future, capping what has been an inexorable rise. When domestic flights are included, Heathrow remains ahead of Dubai by overall passengers, with 73.4 million in 2014. DIA is targeting 79 million passengers for 2015.

Growing traffic In the first three months of 2014, DIA welcomed 18.36 million international passengers, compared to 16 million passengers passing through Heathrow in the same period. While the latter’s performance remained flat, Dubai grew by 11.4 per cent, compared to the same period in 2013. This double-digit growth has almost become routine, with the emirate’s volumes showing dramatic expansion over the past decade. Indeed, in 2003, the airport welcomed fewer passengers over the course of the full year (18 million) than it did in the first quarter of 2014. In 2013 alone, passenger volumes at the airport increased by 15.3 per cent to 65.9 million.

The news that Dubai could surpass Heathrow is a symbol of shifting patterns of international air travel and an endorsement of the emirate’s growth strategy. The GCC

JULY/AUGUST 2015 13

is emerging as a new centre for the global airline industry. The region is an eight-hour flight from approximately two-thirds of the world’s population and, as such, is set to benefit from new patterns of passenger movements in the 21st century.

According to an Alpen Capital report on GCC aviation, which was released in March

14 JULY/AUGUST 2015

It is the “hub� strategy that has allowed Dubai to surpass its competitors, such as Heathrow, as domestic political considerations have hindered expansion plans in the UK.

2014, the Middle East is likely to outperform all other regions of the globe in terms of aviation growth over the coming two decades, until 2032. Revenue passenger kilometres are forecast to expand at a compound annual rate of 6.7 per cent during this period, while freight tonnage per kilometre is predicted to increase at a compound annual growth rate of 7.2 per cent.

COUNTRY REPORT - UAE

centre by building additional capacity. DIA is set to increase annual passenger capacity from the current level of 75 million to 100 million by 2020.

However, this pales in comparison to the plans for Al Maktoum its most in a single International Airport in the south of the city. Dubai’s fiscal year. second airport, opened in 2013, has a current capacity of five million passengers per year. Yet, under a US$ 32 billion (AED 117.5 billion) expansion plan, the airport will be able to handle 120 million passengers per year within eight years, and capacity will reach as many as 200 million passengers in the second phase.

These plans raise questions about overcapacity. Indeed, in the longer term, one concern is that technological advancements could produce long-haul jets that go point to point, and make the hub model redundant.

However, the authorities have considered the issue of point-to-point competition in their designs and visited a significant number of international airports for comparison.

Indeed, Dubai has built its aviation strategy on winning business through the rapid construction of capacity and access.

Paul Griffiths, CEO of Dubai Airports, told The Financial Times,“Air travel remains an aspirational commodity. It is growing consistently. If there are places in the world where supply cannot keep up with demand, demand will go where there is supply. So long as other countries remain ambivalent [about capacity] the more the UAE is providing it.”

The Emirates Group invested

AED 22 billion,

Strong strategy

In the UAE specifically, air passenger traffic could grow at a rate of 6.6 per cent per year.

Indeed, the Middle East region is likely to be one of the best-performing outbound routes in the next two decades, with growth outstripping traditional routes such as EuropeEurope and Europe-North America, according to Alpen Capital.

Capacity expansion Dubai is well placed to capitalise on these emerging trends. The airport has thrived as a hub for long-haul travel between Asia and Europe and the US. Approximately 50 per cent of passengers currently handled by the airport are in transit. The authorities are keen to reinforce their position as a global

It is the“hub”strategy that has allowed Dubai to surpass its competitors, such as Heathrow, as domestic political considerations have hindered expansion plans in the UK. Furthermore, it seems clear in the medium term that there will be strong regional demand for additional capacity. According to Alpen Capital, the Middle East is slated to receive deliveries of some 2,610 aircraft with a total value of US$ 550 billion (AED 2020 billion) between 2012 and 2032. While some of this inventory will be used to replace ageing components of the fleet, the total stock of aircraft is expected to grow at

JULY/AUGUST 2015 15

In the UAE specifically, air passenger traffic could grow at a rate of

a compound annual growth rate of 4.7 per cent during this period.

This trend is likely to be evident in the Dubai and UAE market as well. For example, the 2013 Dubai Air per year.

Show set a global record with a US$162.6 billion (AED 597 billion) order booked within three hours of opening. This was largely on the back of deals announced by Abu Dhabi’s Etihad Airways, Dubai’s Emirates Airline and flydubai, and Doha-based Qatar Airways. While the next iteration of the aviation exhibition in 2015 might not produce such headlines, there is still an expectation of several large announcements.

6.6%

The fleet The capacity additions at Dubai airports have enabled fleet expansions for its local carriers. Indeed, Emirates Airline and Dubai Airports have worked in tandem to foster aviation growth in the emirate. The flagship carrier has experienced substantial growth over the last decade. During the 2013 Dubai Air Show, Emirates announced the purchase of 50 Airbus A380 and 150 Boeing 777X, at a combined value of US$ 99 billion (AED 363.6 billion). In the 2013/14 financial year, the Emirates Group invested AED 22 billion (US$ 6 billion), its most in a single fiscal year.

According to the association, approximately 60 per cent of GCC region’s airspace is reserved for use by national and international air forces operating in the region, limiting civilian capacity.

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COUNTRY REPORT - UAE

The airline currently serves 142 destinations in 80 countries with 218 aircraft. Furthermore, the carrier is not resting on its laurels: its order book has a value of US$ 162 billion (AED 595 billion) for 374 jets from Boeing and Airbus, and the group plans to hire 11,000 new people

by March 2016, a staff increase of six per cent.

The expansion of the carrier’s network also seems to be paying off: for the financial year 2013/14, operating income and profit both rose significantly, up 13 per cent and 50.1 per cent, respectively. As a result, Emirates Group’s total revenue and operating income of AED 87.8 billion (US$ 23.9 billion) were the highest in the company’s 28-year reporting history. This was the result of an increase of 5.1 million in passenger numbers to 44.5 million.

Future opportunities Given the development of Al Maktoum International Airport, Emirates will have plenty of room and opportunity to expand. The carrier has made no announcement on a full relocation to the new airport, however, its cargo division, Emirates SkyCargo, has set up at Al Maktoum and Dubai World Central (DWC), the free zone city attached to the airport. The new facility allows the carrier to handle approximately 700,000 tonnes of cargo per year, with the potential to expand to one million tonnes. This will help maintain Emirates’ position as the leading global carrier of cargo and help build on DIA’s performance of handling 2.4 million tonnes in 2013.

Lowering costs In addition to Emirates, the low-cost carrier flydubai has also been rapidly expanding its network and posting impressive results. Passenger numbers for the company increased by 38 per cent to 6.8 million in 2013. The carrier has been busy adding routes in Eastern and Central Europe in 2014, including

A maritime perspective A chat with Khamis Juma Buamim, former Chairman and Chief Executive of Drydocks World How can Dubai ensure that its maritime industry remains attractive to foreign investors?

Policy formulation needs to be growth driven rather than development driven. In general, the UAE environment has been quite fluent, relaxed and attractive to the industry, and this has been reflected by the number of international players establishing new business activities in the UAE. To ensure that this continues, we must not burden the growth cycle with excessive regulation, which is precisely what happened to the industry in Europe.

Prohibitive regulations prevented many companies from producing a feasible pricing structure, triggering the shift from the West to East and North to South that is occurring throughout the global maritime economy.

Policies need to be aligned with what the business wants because that drives growth. It does not mean that under any circumstances we undermine the environment, or let the marketplace run itself - merely that regulatory bodies ensure the operating framework is applied correctly and efficiently.

What are the biggest challenges to further growth in the industry?

The UAE’s banking sector has not yet taken full advantage of the industry. If you look at the size of the ship financing business around the globe, and compare it with the UAE relative to the size of its maritime industry, we are clearly lagging behind. Ship financing, whether of new, second-hand or converted ships, is a lucrative industry with attractive returns and secured risk. It has been an opportunity missed when one considers that the maritime sector is the second-largest contributor to the country’s GDP after the oil and gas industry. Most countries with successful maritime sectors have reliable local sources of finance, whether it’s Singapore with its local financing engines, or

China with its mammoth banking infrastructure.

Discussion has been ongoing between the marine and banking sectors in the UAE, and progress has been made, but more needs to be done to make local project financing viable.

What challenges will Tasneef have as a new shipping classification body, as it competes with other, long-established industry associations?

The real question surrounding Tasneef is how rapidly it will be able to grow. Tasneef is filling a void, as it is the first classification society to be established in the GCC region, and its establishment will lead to significant maturation of the regional shipping industry. It is already well-placed and has a large inventory of ships registered under its system.

Through its ability to support enterprises involved in shipbuilding and repairs, Tasneef could easily become one of the most important bodies in the UAE. There are currently 9,000 ships in the country, and yet only around 380 are registered under the UAE flag. So while international classification societies have traditionally dominated, it has been primarily due to the lack of a local alternative. The market now has that alternative, and we expect to see results, although it will be a gradual shift.

Over 70 per cent of the ships in the region pass through Dubai, so it is merely a matter of clearly communicating the advantages of joining.

How can the UAE incentivise investment and better support firms in the maritime sector?

The UAE needs an internationally compliant, unified maritime regulatory framework under federal law. Overlapping legislation, and a lack of a sound, national legal structure for the industry is deterring greater investment in Dubai and the UAE. Such legislation would not only benefit the shipping industry, but also tourism and the economy as a whole.

The movement of ships along the national coastline should not be hindered by conflicting jurisdictions. In the end, such overlap creates bureaucratic hurdles that only frustrate business. If laws were unified under the National Transport Authority, this would advance the maritime industry and precipitate funding, insurance, reinsurance, business and project management, keeping millions of dollars in the UAE that, today, go abroad.

JULY/AUGUST 2015 17

Sofia, Bratislava, Prague and Sarajevo. By the end of 2014, flydubai will serve 75 destinations, adding 23 destinations in 2014. As such, the carrier has been investing in its fleet. In July 2014, the company took hold of three next-generation Boeing 737-800s, and as of January 2015, the company was searching for six additional aircraft.

The low-cost segment, while growing, is not expected to pose significant competition to the more established, larger airlines, and it is unlikely to erode their market share, appealing instead to an altogether different niche of travellers.

“Although there have been a number of low-cost airlines entering the UAE in recent years,”Emre Ismailoglu, General Manager for Turkish Airlines UAE, said,“the services that they provide and markets they cater to overlap minimally with fullservice airlines.”

18 JULY/AUGUST 2015

Ship financing, whether of new, second-hand or converted ships, is a lucrative industry with attractive returns and secured risk.

While the government has been overseeing the expansion of airport capacity, Dubai’s local air carriers have been growing their fleets and the regulatory environment has been steadily liberalised to allow foreign air carriers to enter the market. All this activity has resulted in a capacity issue, with regard to airspace. In April 2014, the International Air Transport Association (IATA) cautioned that the region was facing gridlock in the available airspace. According to the association, approximately 60 per cent of GCC region’s airspace is reserved for use by national and international air forces operating in the region, limiting civilian capacity.

However, if this challenge can be resolved, Dubai looks set to cement its position as a leading centre for the aviation industry.

COUNTRY REPORT - UAE

Connectivity is key - Etihad Rail Faris Al Mazrouei, CEO, Etihad Rail, explains how connectivity between key infrastructure hubs is the way forward What more needs to be done to improve the inter-connectivity of key infrastructure so that the industrial sector is able to benefit?

Close collaboration among infrastructure operators is a key factor in ensuring successful inter-connectivity.

We work closely with our future customers and partners to ensure that the UAE’s national rail network is properly integrated with regional ports, industrial zones and other transport infrastructure such as the wider GCC rail network, Dubai Metro and the planned Abu Dhabi tram and metro networks.

With regards to the GCC railway in particular, a coordinated effort from all six states is required to ensure the necessary harmonisation of technical standards and that the railways will serve their customers’ needs. This collaboration will play a major role in facilitating full technical and operational interoperability and streamlined institutional arrangements – such as

Customs processes – to ensure efficient regional rail services.

For Etihad Rail, having proper interconnectivity also means we can link to other major transport and infrastructure hubs, benefitting our customers who are looking for a one-stop shop solution. In the UAE, Etihad Rail will connect industrial areas across the emirates and link these to the wider region, boosting trade and creating new business opportunities.

How can dedicated rail logistics parks, in close proximity to air and seaports, improve the UAE’s integrated trade infrastructure network?

The availability of mode choice in a hub is critical in global supply chains because different modes of transport give you different speeds of delivery, reliability and costs. In today’s global economy, supply chains must be able to adapt to ensure companies are competitive. Tight integration of modes ensures that these companies have the adaptability and flexibility in their supply chains to meet the needs of their customers and to deliver

their products at the lowest possible cost.

Close integration between rail and logistics infrastructure providers – at airports and seaports alike – is a strategic element in the development of the UAE’s infrastructure network and of our trading economy as a whole. Having proper connectivity will allow us to offer logistics companies an enhanced transportation system combining sea, road, air and rail.

Etihad Rail’s connection to logistics infrastructure hubs – such as Khalifa Industrial Zone Abu Dhabi and Jebel Ali Industrial Area in Dubai – will play an essential role in the overall connectivity of the railway with key centres of economic importance to the UAE and the region, enabling a stronger and more efficient supply chain. To deliver this integration, we are continuing to form important partnerships with logistics infrastructure providers across the emirates.

What opportunities will be made available for investors as stages two and three of the project are rolled out? In what ways will local small and medium-sized enterprises (SMEs) benefit?

A number of regional SMEs have been sub-contracted on construction and supply projects, and have been instrumental in the timely and efficient delivery of stage one. Going forward, both stage two and stage three will open up similar opportunities. We also need to consider the bigger picture and the key role that Etihad Rail has in the continued

development of regional businesses – SMEs and larger corporations alike.

The UAE rail network will provide a boost to existing commerce by cutting delivery times, and making the transportation of goods more efficient. It will connect remote areas, creating new trade hubs throughout the country and expanding logistics capabilities. It is a well-known fact that logistics represents a significant cost for any business, so by making this process more efficient and cost-effective, Etihad Rail will contribute to the economic prosperity of SMEs across the region. Many services will also be required to support the operation of the railway, and we expect local businesses to be able to take advantage of these opportunities.

-This information was originally published by Oxford Business Group (OBG), the global publishing, research and consultancy firm, appearing in the publication The Report: Abu Dhabi 2015 and The Report: Dubai 2015. For economic news about UAE and other countries covered by OBG, please visit http://www.oxfordbusinessgroup. com/economic-news-updates

JULY/AUGUST 2015 19

COVER STORY

Keeping tabs F

rom asset tracking to waste management, contactless RFID tags and transponders play a critical role in wireless identification, recording and providing data quickly and accurately. RFID enabled solutions optimise industrial processes, improve accuracy and increase productivity across logistics and supply chain management.

“HID Global is seeing a lot of traction and interest across multiple industries and regions. In the Middle East, we see an increased interest in tracking IT assets, hospitality/laundry, oil and gas, airlines, waste management / container handling and jewellery/retail stores.

Globally, our customers are looking for a solution delivering efficient track and trace capabilities securely and reliably.

Additionally, deployments in public transportation, access control, and Citizen ID are significantly increasing,” says Eric Suligoj, Director, Business Development, HID Global - Industry & Logistics.

RFID has changed logistics management, allowing bulk scanning at high distances and speed. Ultra High Frequency (UHF) adoption is growing, and new applications usually require UHF frequency, unless there are special environmental conditions, like water, to mitigate, or singular item interaction is required in production environments. The mass adoption of RFID in retail is also driving RFID standardisation, like the recent introduction of unique Tag Identifier codes (TID) across all major UHF chip suppliers.

“Near Field Communication (NFC) is

20 JULY/AUGUST 2015

Eric Suligoj, Director, Business Development, HID Global – Industry & Logistics, tells us how RFID technology is transforming the logistics industry, and of the near future when the technology will go beyond just tags

also driving RFID acceptance, and putting the technology at the forefront of end users – with millions of mobile readers (smart devices) in the hands of consumers. This methodology is also useful for Industry and Logistics applications,” informs Suligoj.

NFC is easier to programme and readers are readily available compared to sourcing additional High Frequency (HF) handsets.

Retailers embracing RFID technology are driving mass acceptance and credibility worldwide. However, simple labels are no longer meeting advanced requirements.

There are multiple industries and applications now requiring more robust, rugged, chemical and temperature resistant RFID Tags.

“The shift in the industry demands has led us to adapt our research and development leading to 80 per cent of new products being UHF. However,

COVER STORY

LF and HF are still relevant in many applications for automation and other applications, where read range is necessary

or counter-productive. Our recent case study, presenting RFID tech in cryogenic preservation and storage management, illustrates that HF tags are ideal for this application. Additionally, we continue to innovate with the recent introduction of Trusted Tag Services, a cloud-based

platform, coupled with trusted NFC tags that add security to NFC applications,� he explains.

Whether we are talking locally or internationally, there are significant differences in the need to automate processes, quickly access inventory or improve efficiencies. There are some exceptions though, when certain industries dominate a region. For example, Oil and Gas, Hospitality, etc. Locally, the external environment will dictate the features

JULY/AUGUST 2015 21

COVER STORY

and functionalities of the RFID tag. Requirements may include extreme hot or cold temperatures, direct sunlight, fire, hazards, water resistance, etc. There is a strong demand for RFID technology and a local willingness to implement the right RFID solution based on the high-tech application requirements that are emerging in the Middle East regions.

“Looking at the future, UHF is the frequency focus across many industries. For example, chip manufacturers agreed on unique TID schemes across all vendors to assure tags can be uniquely identified globally, and cannot easily be cloned. Also, converged tags covering HF and UHF frequencies, while interacting with the same chip, is the next generation technology, leveraging the best of both worlds,” says Suligoj. UHF continues be the preferred solution for Logistics/Supply chain handling to enable bulk handling of goods.

Additionally, end-user or delivery personnel can interact with the same tag using an NFC enabled mobile device (HF) for brand, or product authentication, or shipment verification.

22 JULY/AUGUST 2015

Adds Suligoj, “Another trend is to embed RFID into objects at production instead of retrofitting tags to objects or products. The advantage of embedding an RFID tag is that it’s invisible to the user, and does not interfere with design and materials handling. HID Global provides an in-depth portfolio of RFID tags, as well as custom design services.

Manufacturers rely on us as the RFID technology experts, so they can focus on production and growing their business. For

example, manufacturers embed an Epoxy Tag UHF into plastic transport boxes at production time – saving time and reducing complexity that can occur post production,” he explains.

The Oil and Gas industry, for one, typically uses RFID to track equipment like pipes, meters, valves, etc. Obtaining and maintaining accurate inventory or maintenance records is mandatory.

Processes and standards state organisations must accurately manage the equipment/ product lifecycle, and record and prove that the item receives regularly scheduled maintenance and audits. With a precise audit trail, the item can be removed from

COVER STORY

With a precise audit trail, the item can be removed from use and replaced in a timely manner, avoiding any malfunction or damage, while complying with the rules and avoiding serious liabilities.

use and replaced in a timely manner, avoiding any malfunction or damage, while complying with the rules and avoiding serious liabilities.

Returnable Transport Items (RTI) companies use RFID on refillable containers such as metal kegs, gas cylinders, etc, to trace the product through the lifecycle.

Again, it’s imperative to receive accurate data on item location, cleaning dates, maintenance, contents, customer

information, etc. Other returnable transport items use cases, including items like wooden or plastic pallets, and returnable transport boxes or containers. “Companies deploying RFID technology gain many benefits - inventory management is faster and more accurate, logistics and handling processes are quicker and more efficient, and human error decreases. RFID for Animal Identification in the Middle East is traditionally used for livestock (like camels, cows, etc) as opposed to pets, like in Europe or the United States. Camels or horses are tagged with injectable glass tags.

Additionally, birds of prey (Falcons) are

JULY/AUGUST 2015 23

COVER STORY

tagged with glass tags. Tagging live assets uniquely identify the animal for breeding and treatment records,” informs Suligoj.

RFID technology in the region is based on international standards. Standardisation is primarily based on frequency and low level communication protocols. As markets mature, standards are expected to move to higher levels like Software APIs and databases.

“Accountability improves visibility on product lifecycle and efficiency of handling increases. As more things connect through the cloud, and interoperable services offer a holistic view of whole supply chain processes, Internet of Things (IoT) is possible,” states Suligoj.

The IoT means a lot of things.

Primarily, it’s about connecting formerly independent objects to get a more holistic view to see trends, and/or have items communicate with each other or influence each other based on their states. RFID makes the transfer of information efficient and easy for many items that don’t have their own power source. Passive RFID is maintenance free and sustainable for years. “HID Global Trusted Tag Services plays a vital role in this market, adding security and trustworthiness to RFID/ NFC applications and preventing cloning.

The next challenge for the industry is to provide interoperable data analysis services,” concludes Suligoj.

JULY/AUGUST 2015 25

‫‪COVER STORY‬‬

‫قوي على تكنولوجيا ‪ RFID‬في منطقة الشرق‬ ‫على سبيل املثال‪ ،‬وافقت شركات تصنيع‬ ‫األوسط‪.‬‬ ‫الرقاقات على توفير أرقام تعريف فريدة من‬ ‫ثم اختتم اريك كالمه قائال‪« :‬في املستقبل‪ ،‬نوعها لكل الرقاقات التي تنتجها لضمان توفير‬ ‫سيكون التردد فوق العالي (‪ )UHF‬هو التردد‬ ‫رقاقات ميكن التعرف عليها بشكل فريد على‬ ‫املفضل واملستخدم في العديد من الصناعات‪ .‬مستوى العالم‪ ،‬وليس من السهل نسخها‬

‫أو تقليدها‪ .‬في الوقت ذاته‪ ،‬سيكون هناك‬ ‫إمكانية للتواصل ما بني رقاقات ‪ HF‬و‪ UHF‬على‬ ‫مستوى الشريحة اإللكترونية ذاتها‪ ،‬وهي تقنية‬ ‫اجليل املقبل‪ ،‬التي تتيح االستفادة من أفضل ما‬ ‫في العاملني‪».‬‬ ‫‪26 JULY/AUGUST 2015‬‬

‫‪COVER STORY‬‬

‫مستقبل رقاقات التعريف‬

‫حدثنا اريك ساليغوج‪ ،‬مدير تطوير األعمال في شركة ‪ HID‬العاملية للخدمات التي تدعم التردد العالي‪ .‬مع ذلك‪ ،‬الرقاقات‬ ‫البسيطة لم تعد قادرة على تلبية املتطلبات‬ ‫الصناعية واللوجستية‪ ،‬عن تكنولوجيا حتديد الهوية مبوجات الراديو (‪)RFID‬‬ ‫املتقدمة عند االستخدام‪ .‬هناك صناعات‬ ‫وعن دورها الثوري في حتديث صناعة اخلدمات اللوجستية‪ ،‬وعن املستقبل القريب‬ ‫وتطبيقات متعددة تتطلب اآلن رقاقات‬ ‫لهذه التكنولوجيا حني ستتخطى حدود رقاقات التعريف ‪.Tags‬‬ ‫‪ RFID‬أكثر قوة وصالبة‪ ،‬تقاوم احلرارة واملواد‬ ‫الكيميائية‪.‬‬ ‫من تتبع األصول إلى إدارة النفايات‪ ،‬تلعب‬ ‫يعود اريك ليخبرنا‪« :‬هذا التحول في‬ ‫التردد فوق العالي (‪ )UHF‬وانتهاج التطبيقات‬ ‫رقاقات حتديد الهوية مبوجات الراديو (‪)RFID‬‬ ‫اجلديدة املعتمدة عليه‪ ،‬ما لم تكن هناك ظروف متطلبات الصناعة أدى بنا إلى تعديل توجهات‬ ‫بيئية خاصة متنع ذلك‪ ،‬مثلما احلال مع املاء‪،‬‬ ‫ومستقبالتها دورا حاسما في التحديد‬ ‫أقسام البحث والتطوير ما أدى بدوره إلى‬ ‫وما لم تكن هناك حاجة للتعريف الفردي‬ ‫الالسلكي وتسجيل وتوفير البيانات بسرعة‬ ‫جعل ‪ %80‬من املنتجات اجلديدة تعتمد‬ ‫وبدقة‪ .‬تعمل حلول‪ RFID‬على حتسني مجريات للمكونات في بيئة اإلنتاج‪ .‬التطبيق الواسع‬ ‫على الترددات فائقة التردد‪ .‬مع ذلك‪ ،‬ال تزال‬ ‫العمليات الصناعية‪ ،‬وحتسني الدقة وزيادة‬ ‫الستخدام رقاقات ‪ RFID‬في جتارة التجزئة يساعد الترددات املنخفضة والعالية مستخدمة في‬ ‫اإلنتاجية في اخلدمات اللوجستية وإدارة‬ ‫أيضا على توحيد معايير صناعة رقاقات ‪ .RFID‬العديد من تطبيقات األمتتة وغيرها‪ .‬وفقا‬ ‫يعلق اريك على هذا األمر بقوله‪« :‬ذيوع‬ ‫سلسلة التوريد‪ .‬يخبرنا اريك ساليغوج‪،‬‬ ‫لدراسة حديثة أجريناها‪ ،‬استخدمنا تقنية‬ ‫‪RFID‬‬ ‫‪Near‬‬ ‫‪Field‬‬ ‫املدى‬ ‫قريب‬ ‫االتصال‬ ‫شهرة‬ ‫مدير تطوير األعمال في شركة ‪HID‬‬ ‫العاملية‬ ‫في البرادات وإدارة التخزين‪ ،‬وأوضحنا‬ ‫أن الرقاقات عالية التردد ‪ HF‬مثالية ملثل هذه‬ ‫للخدمات الصناعية واللوجستية‪ ،‬املزيد قائال‪ Communication :‬أو‬ ‫اختصارا ‪ NFC‬يزيد بدوره‬ ‫ً‬ ‫من معدالت قبول وانتشار ‪ ،RFID‬ويضع هذه‬ ‫النوعية من التطبيقات‪ .‬باإلضافة إلى ذلك‪،‬‬ ‫«نشهد حاليا الكثير من اإلقبال والتطبيق‬ ‫والفائدة املتحققة من استخدام رقاقات ‪RFID‬‬ ‫التكنولوجيا في أيادي املستخدمني النهائيني‬ ‫فإننا مستمرين في االبتكار في املجال اجلديد؛‬ ‫في كافة املجاالت الصناعية وفي عدة مناطق‬ ‫– خاصة مع توفر املاليني من األجهزة الذكية‬ ‫خدمات الرقاقات املوثوق بها‪ ،‬وهي منصة‬ ‫في الشرق األوسط‪ ،‬كما ونرى اهتماما متزايدا القادرة على قراءة هذه الرقاقات في أيدي‬ ‫سحابية مربوطة برقاقات ‪ NFC‬موثوق بها‪ ،‬والتي‬ ‫املستهلكني‪ .‬هذه املنهجية تفيد أيضا تطبيقات تضيف املزيد من األمن واملوثوقية‪».‬‬ ‫في تتبع األصول في مجال تقنية املعلومات‪،‬‬ ‫سواء على املستوى احمللي أو الدولي‪،‬‬ ‫التصنيع واخلدمات اللوجستية»‪.‬‬ ‫وفي الضيافة وغسيل املالبس‪ ،‬والنفط والغاز‬ ‫‪ NFC‬أسهل من حيث البرمجة‪ ،‬كما وتتوفر هناك اختالفات كبيرة في مجال احلاجة ألمتتة‬ ‫وشركات الطيران‪ ،‬وإدارة النفايات وتداول‬ ‫أجهزة قراءة رقاقاته بسهولة مقارنة مع الطرفيات العمليات والوصول بسرعة للمخزون أو‬ ‫احلاويات وفي جتارة املجوهرات ومتاجر البيع‬ ‫حتسني الكفاءة‪ .‬هناك بعض االستثناءات على‬ ‫بالتجزئة‪ .‬على الصعيد العاملي‪ ،‬يبحث عمالؤنا‬ ‫الرغم من ذلك‪ ،‬خاصة عندما تتطلب بعض‬ ‫عن حلول توصيل وتسليم فعالة مع القدرة‬ ‫مع مراجعة األرقام بدقة‪،‬‬ ‫الصناعات فرض حدود ملنطقة ما‪ ،‬مثل صناعات‬ ‫على التتبع بشكل آمن وموثوق بها‪ ،‬باإلضافة‬ ‫ميكن إخراج أي عنصر من‬ ‫النفط والغاز والضيافة وغيرها‪ .‬على املستوى‬ ‫إلى خدمات وسائل النقل العام‪ ،‬ومراقبة‬ ‫واستبداله‬ ‫االستخدام‬ ‫دورة‬ ‫احمللي‪ ،‬متلي البيئة اخلارجية اخلواص والوظائف‬ ‫الدخول والوصول‪ ،‬وحتديد هوية املواطنني‪».‬‬ ‫في الوقت املناسب‪ ،‬مع‬ ‫املطلوبة من رقاقات ‪ RFID‬مثل درجات احلرارة‬ ‫لقد غيرت رقاقات ‪ RFID‬إدارة اخلدمات‬ ‫املتطرفة ‪ -‬الساخنة أو الباردة‪ ،‬وأشعة الشمس‬ ‫املسح‬ ‫اللوجستية كما نعرفها‪ ،‬إذ باتت تقبل‬ ‫جتنب أي عطل أو ضرر‪ ،‬مع‬ ‫املباشرة‪ ،‬واحلرائق‪ ،‬واملخاطر‪ ،‬ومقاومة املاء‪ ،‬وغير‬ ‫املتعدد ومن على مسافات طويلة وبسرعات‬ ‫االلتزام بالقواعد وجتنب‬ ‫ذلك‪ .‬بشكل عام‪ ،‬ميكننا القول بأن هناك طلب‬ ‫عالية‪ .‬التوجه احلالي في السوق هو الستخدام‬ ‫أي التزامات ممكنة‪.‬‬ ‫‪JULY/AUGUST 2015 27‬‬

TECHNOLOGY IN FOCUS

28 JULY/AUGUST 2015

TECHNOLOGY IN FOCUS

Taking in the

technology Rami Kichli, Vice President, Software AG, Gulf & Levant, talks to GSC about the importance of adapting to new technology, and what we can look forward to in the future.

T

“We are optimistic that in 2015 we will he logistics industry has been continue these positive developments. Our strongly indicating dynamic expansion over the past few years. projections have shown that revenue from In 2012, the industry was recorded supply chain management is expected to reach US$ 13.63 billion (AED 50 billion) by to have more than US$ 8.3 billion 2017,” he adds.

(AED 30.4 billion) in revenues. Recent Software AG offers a wide range of studies by Gartner, Inc noted that supply chain management (SCM) and procurement supply chain software solutions for logistics companies. Their comprehensive and applications have reached US$ 9.9 billion customised solutions have made them a (AED 36.4 billion) in 2014, with a 10.8 per trusted partner for many notable companies cent annual growth rate. in various sectors across the world. They “The market has experienced steady are known for their world-class supply growth as more and more companies have management solutions, and realised the value of having have developed advanced a strong logistics partner and reliable warehouse to ensure competitive management systems advantage, enhance The year 2014 that allow their clients to customer satisfaction, witnessed the enhance their supply chains and optimise operations,” and achieve a competitive says Rami Kichli, Vice emergence of advantage.

President, Software AG, a wide range “We have also built a Gulf & Levant. broad portfolio of worldThe year 2014 witnessed of supply chain class products and services the emergence of a wide technologies, that will allow logistics range of supply chain companies to meet customer technologies, recording recording 17 per demands more efficiently 17 per cent growth for the cent growth for at a reasonable price,” adds cloud industry, and nine per cent growth of on premise the cloud industry, Kichli.

Software AG has created licenses. Such increased interest can be attributed and nine per cent an all-inclusive service by uniting the Internet of to organisations looking growth of on Things (IoT) and streaming to rejuvenate their supply chain portfolio. premise licenses. and process analytics into a JULY/AUGUST 2015 29

TECHNOLOGY IN FOCUS

comprehensive predictive maintenance solution. By utilising real-time equipment sensor data via machine monitoring, companies can forecast what kind of maintenance will be required and when. Efficient evaluation and screening will allow companies to dispatch the required

30 JULY/AUGUST 2015

TECHNOLOGY IN FOCUS

technicians to address the problem, which will minimise loss of time and potential costs that may be incurred by these setbacks. It also identifies and manages at-risk orders before any negative impact on customers and finances, and helps implement smoother internal operations

Agreements and customised maintenance services for ensuring competitive advantage, but also improves operating margins due to decreased technician and maintenance costs.“In addition, the platform also equips companies with real-time visibility into field Efficient service technician tasks and performance, and enhances evaluation and remedial planning when screening will maintenance requests cannot allow companies be completed during planned downtime periods. Lastly, to dispatch it also offers insights into preventative measures that the required could be implemented for greater proficiency,” explains technicians to Kichli. address the There are many multi– national companies that have problem, which greatly benefited from such will minimise innovative platforms. Cocaloss of time and Cola Refreshments, a company that owns and manages Cocapotential costs Cola® branded refrigerators in retail establishments, is that may be one such example. They incurred by enforced a similar platform these setbacks. to ensure speed, innovation, integration, visibility and reliability to replace the traditional technical maintenance process that is susceptible to error and takes a longer time to perform.

Electrolux provides another example of the service-wide benefits of predictive maintenance. Deploying Software AG’s webMethods suite provided Electrolux with a financially lucrative business opportunity by implementing real-time intelligence that allowed the company to identify bottlenecks and address them before they impacted the order-to-ship process. The application also provided a wider range of solutions that greatly enhanced internal and external operations.

There are a myriad of ways technology can enhance and optimise business and collaboration. Finally, it monitors every operations. The wide range of modern part of external events that could potentially tools now at the disposal of corporations influence the process, thus giving a broad across various sectors can help companies view of the procedure and development. meet their target financial and expansion Predictive maintenance provides a goals. It can also provide invaluable new wealth of benefits to an organisation. Not insights for strategic developments, by only does it provide stricter Service Level

JULY/AUGUST 2015 31

guiding companies on where to best direct their resources to ensure maximum results.

Furthermore, technology can determine and prevent system gaps that could be harming operational efficiency.

“This year, 2015, will see a host of emerging trends that will serve to further augment business revenue and boost the customer experience,” he says. According to Kichli, there are five main trends in particular that will be making a major impact in the market in the near future. The Internet of Things (IoT) is first on the list.

“This computing concept fosters innovation and provides a platform for the creation of advanced and comprehensive services that revolutionise business/consumer relations.

With such a wealth of potential in its application, IoT will harness data and create new operations from the valuable insights that are gained from the information. It will also help synchronise operations, implement real time monitoring, and optimise the overall customer experience,” he explains.

There will also be an increase in automation among manufacturers, driven by the increasing value of production and distribution of automation equipment. The service requirements that are closely tied with the active use of specialised equipment will create new demand for low-cost maintenance and support, which will carve a new niche in the market that will provide more revenue.

Real-time demand fulfilment will also be a key player in the industry, as the need to instantaneously address situations becomes a highly valued feature that can enhance the quality of service providers.“It will also lead to stronger integration and smoother operations by harnessing data that can provide insights on consumer demands and ideal pricing. A platform that can ensure comprehensive integration can cement the company’s solidarity,” he says.

Supply chain and operational resiliency will also take the spotlight as manufacturers ensure that they provide quality service, while keeping within budget, especially in the face of an often erratic market and unexpected risks. Such resiliency can only be established when manufacturers are equipped with the necessary tools that

32 JULY/AUGUST 2015

Despite the emerging technological trends that will surely revolutionise the market, a strong pool of dynamic and dedicated personnel will form the backbone that will determine the success of company. will allow them to get crucial information, which will be key to developing the most relevant response. The formulation of such a response will invite participation from all departments within the company as they endeavour to provide the most allencompassing solution.

“Finally, there will be more of an emphasis on human resources, with top supply chain and operations talent to be high in demand. Despite the emerging technological trends that will surely revolutionise the market, a strong pool of dynamic and dedicated personnel will form the backbone that will determine the success of company. This goes beyond implementing Bring Your Own Device (BYOD). This is the creation of an environment that will allow ambitious and innovative employees to be heard and make a positive contribution to the company.

The competition also lies in having a corporate culture that is relevant and progressive.

Such an atmosphere will cultivate talented individuals that can be further developed, retained and leveraged to maximise the company’s potential,” states Kichli.

Another important element is to establish an extensive and thorough assessment of all elements of the supply chain, from raw materials suppliers to factories to transportation providers, as any oversight in any element could wreak havoc on the entire process. To ensure seamless operations, meticulous assessment must be imposed so there will be no room for error.

“Software AG offers the Supply Chain Visibility solution to address this issue. By providing end-to-end visibility throughout the supply chain, the service affords our clients with real time monitoring to connect critical upstream and downstream processes and guarantee maximum efficiency. It provides a broad view of the operations that provides insights on each component of the supply chain, and can determine how each element impacts the overall process.

Harnessing such important information also determines the most ideal ways to react to certain changes and crisis situations,” he says.

As with any business the success or failure of a business model hinges in its ability to adapt to the latest technological advancements and address the dynamic demands of the market. The vibrant information technology

TECHNOLOGY IN FOCUS

landscape provides a wide range of potential enhancements for maximising the resources of a corporation.“Software AG’s new Digital Business platform is one such example. As our latest middleware offering, the platform is a revolutionary new service that provides companies with new, flexible and adaptive applications,” smiles Kichli.

The Digital Business platform enables companies to buy, create and customise the application in order to develop a programme for addressing their individual

requirements. Having a tailored and organic application that allows organisations to initiate creative and innovative solutions ensures competitive advantage. In addition, the service also offers many sophisticated and valuable components, such as an in-memory database, a CEP engine, an integration engine, a process engine,

among others.“Being able to keep abreast with these technological movements and improving our roster of services accordingly will sustain us for many more years to come,” he says.

Of course, the industry is not there yet.

There is still room for improvement in terms of establishing comprehensive IT integration. At the moment, the benefits of these modern tools are being taken advantage of by only a few companies, and several multinational organisations.“There is a wealth of opportunity in the market that is still largely confined to traditional modes of operations. The proper dissemination of information will play a vital role in this regard, as key players and clients need to be educated with regards to the lucrative pay offs of investing in a technologydriven template,” concludes Kichli.

JULY/AUGUST 2015 33

IN FOCUS

They say location is everything.

Mustapha Kawam, President and CEO, Globe Express Services, talks to GSC about how being located in the UAE was the right choice for the business. But that is just the first step, moving the business forward and keeping up with the sophisticated market is the real agenda 34 JULY/AUGUST 2015

Keeping up with the times

IN FOCUS

G

lobe Express Services UAE was established in September 1999, when the Middle East was emerging as a global logistics hub.

The UAE was gaining dominance over the sector, and was attracting investors from the international community with its dynamic and burgeoning economy. This positive development can be attributed to several unique factors, most significantly the country’s strategic geographic location between Asia and Europe.

As the gateway between the two continents, its position provides efficient access to markets in Africa, Central Asia, India and Pakistan.

These countries held great potential because they featured a rapidly expanding consumer demographic which provided plenty of room for new companies to address any market gaps.

“When we established our company in the UAE, we wanted to do more than carve a reputation for providing excellent and top quality service.

We also wanted to assist the national agenda for growth by adopting a proactive role in the logistics sector,” says Mustapha Kawam, President and CEO, Globe Express Services (GES).

handling and lifestyle In 2012, GES started management. With a more operations from the Jebel Ali comprehensive warehouse, Free Zone, which, according to we have been able to them, was the most strategic efficiently perform stock location for their expansive inquiries and track the status 67,449 sq ft warehouse, with of orders, which helps us an accompanying office provide quality service to our facility with six loading doors clients,” explains Kawam. and around 4,780 pallet The warehouse also offers locations. The warehouse a variety of warehousing features state-of-the-art and packing services, which security systems and advanced include container loading facility monitoring tools and unloading, short-term such as indoor and outdoor and long-term storage, camera systems, digital video Mustapha Kawam consolidation, trans-loading, crating, recorders and high-resolution IP cameras. packing, scan guns, placards and radio “Our new establishment allowed us to frequency relays. In addition, it provides expand our range of services to include specialty handling services such as full warehousing and packing services, specialty service solutions for dry cargo, heavy equipment teardowns and equipment dismantling, safe rooms for storage of high-value goods and hallmarking services, The warehouse on-site packing for oversized, sensitive or heavy cargo, and RoRo (Roll-on/roll-off) features state-of-theequipment. art security systems This expansion in services is critical at this time. The Gulf countries are steadily and advanced facility proving their strong potential in the field monitoring tools of business and trade, with the freight forwarding industry expected to grow 7.8 such as indoor and per cent annually through 2017. The UAE’s outdoor camera performance is particularly outstanding, with recent studies conducted by Frost & systems, digital Sullivan predicting that the logistics industry video recorders shall witness consistent development of around eight-nine per cent every single and high-resolution year throughout the period till 2020. At the IP cameras moment, Saudi Arabia, the United Arab Emirates and Qatar are leading the move towards cementing the Gulf’s international economic dominance, contributing almost 80 per cent or USD 1.5 trillion (AED 5.5 trillion) of the GCC’s GDP in 2013.

The logistics trade constitutes about two per cent of the region’s overall GDP, however, its strategic location, along with the region’s many valuable features, holds great potential that drives the interest of business shareholders. Billion-dollar infrastructure projects are currently underway in order to improve transportation channels and strengthen the Gulf’s position as a global logistics hub.

JULY/AUGUST 2015 35

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IN FOCUS

“At the moment, the region’s logistics market can be likened to Europe’s market at the dawn of the 1990s, featuring strong potential for development. In order for the Gulf region to fully realise its potential, it must adapt to the dynamic demands of the market by updating and expanding its range of services and forging strong corporate relations with its contemporaries. Integration is needed now more than ever, and being able to positively contribute to the customer’s supply chain cycle is key to keeping the market relevant and ensuring competitive advantage,” states Kawam.

Which is where GES comes in. The company offers a wide range of logistics services to businesses operating in various sectors in Asia, Europe, the Middle East, North America, Latin America and beyond.

Billion-dollar infrastructure projects are currently underway in order to improve transportation channels and strengthen the Gulf’s position as a global logistics hub

“We have become a trusted partner of many companies over the years as they have come to rely on us for our services in ocean and air freight forwarding, overland transport, customs brokerage and compliance consulting, cargo consolidation, warehousing and distribution, specialty cargo handling and project logistics. We remain committed to proactively implementing modern tools and technology to ensure flawless service, competitive pricing, and supply chain excellence,” he says.

GES has always put a premium on

customer service. Their expertise in regulations, the vertical industry and global coverage has benefited many of their partners, and they are always on the lookout for innovative expansion programmes.

Says Kawam,“Our corporate culture maintains efficient, enthusiastic and friendly responses to any request that goes to the company.

However, our interest is not only confined to our customers, but to our own people as well, as we have always ensured that we cultivate a good work environment that can foster a healthy platform for skills development. Passion drives us forward, and it is this very passion

JULY/AUGUST 2015 37

IN FOCUS

that encourages us to enter new frontiers and provide customised and effective services.”

Efficiency, technology and customer experience are the three factors that constantly shape and reshape the industry.

As integral elements to any successful business, these three components have

38 JULY/AUGUST 2015

very important impacts on operations and corporate development. For the logistics industry in particular, the ability to deliver services accurately and swiftly will always be the top priority.

“Being able to customise your services and delivery on time enhances a company’s

reputation in the market. This is especially important in the Middle East as it features a dynamic and rapidly expanding economy that creates unique demands that must be addressed,” he adds.

Technology plays a crucial role as well, and data in particular is an untapped

IN FOCUS

resource that could greatly benefit logistics companies. As we live in an age of information, where companies accumulate and are exposed to infinite modes of information, being able to manage the complex system of data can be invaluable for companies that want to enhance their

competitive advantage. Touted as the new logistics tool, big data can provide predictive network and capacity planning, risk evaluation, resilience planning, and real-time route optimisation, up to crowdsourced pick-up and delivery operations, among other invaluable tools.

“Providing an impeccable customer experience is always the premier objective of any business operation in the logistics industry, and with the advent of technology, customers have more sophisticated and unique demands that the sector must meet,” explains Kawam. Technology has been a strong catalyst for the business landscape’s dynamic evolution. As logistics companies have transformed from being merely service providers into business partners, their value and potential is being appreciated more by companies who are looking to increase and optimise the efficiency of their supply chain operations. The emerging demand for add-on services and more comprehensive solutions has led logistics service providers to utilise the latest technological tools that enable them to enhance their customer’s experience and improve their offerings.

“Innovative modern tools will continue to augment the industry and create fast, reliable and sustainable delivery options for the benefit of a wide range of clients,” he adds. One such aspect that this can be readily applied to is the effective tracking of shipments, which not only helps build client trust in the service provider, but also encourage frequent and reliable deliveries. Such modern technologies help facilitate the secure exchange of important information, files and documents to ensure smoother operations.

Concludes Kawam,“We are always looking for ways to push the boundaries.

Research and development allows us to explore other areas that we could direct our resources to. We want to pave the foundation for the future by embracing the challenges of today.”

JULY/AUGUST 2015 39

ANALYSIS

40 JULY/AUGUST 2015

ANALYSIS

Keeping the customer engaged With smartphones becoming an integral part of our daily life, there is no reason why the technology cannot be applied to supply chain logistics to establish a transparent and efficient system. Transport Intelligence’s Ken Lyon and Mirek Dabrowski, President and co-founder of oTMS elaborate

T

he greatest challenge faced by logistics operators is knowing what’s happening ‘out there’ in their extended supply chains.

This is not a simple exercise, because supply chains involve a number of different activities, including procurement, manufacture, transport, distribution and delivery.

Within some of these activities, precise, immediate and granular data is available to operators and managers, helping them to control activities and respond to unexpected events. However, they usually exist as ‘islands’ of clarity within a sea of uncertainty. Therefore, attempting to establish a view of the entire supply chain is frequently impossible, due to disconnects, incompatibility and inaccurate or nonexistent data flows. It’s fair to say, that the most accurate description of most supply chain activities is that they are ‘Invisible’.

JULY/AUGUST 2015 41

Surprisingly, this has been the normal state of affairs for decades. Numerous attempts have been made to reveal the nature, status and location of everything moving through supply chains. Many companies claim that they have resolved this problem, and can prove it by demonstrating their advanced track and trace systems. These systems do indeed provide impressive track and trace ‘visibility’, but only while the items being monitored remain within the custody of the organisation operating the track and trace system. Once items or products are moved through the chain to another party, the flow of data is interrupted, and often processed and presented differently. The net result being an imperfect or incoherent picture of what is happening.

The reasons for this are clear (and unsurprising). Supply chains are comprised of many different parties connected in the

42 JULY/AUGUST 2015

4.9

chain. They may be ineffective. This increases performing similar or costs, causes delays and quite different tasks, disappoints the customer, separated by geography, with the consequential contractual relationship impact on brand loyalty. If devices will be or some other arbitrary you have the appropriate connected to the arrangement. They all use levels of visibility across Internet different systems, either and down into your logistics home grown or purchased ‘off operations, you have a huge the shelf’ and, as is often the case, commercial advantage. If you have when some of the parties involved in the systems that are adaptable, flexible and easily chain are using systems purchased from the accessible to your customers and partners, same vendor, they have implemented them you can respond to their demands faster, differently. These incompatibilities contribute more accurately, and at a lower cost. A to the challenge of providing a clear, coherent compelling scenario. and comprehensive picture of national, Improving visibility is not just an exercise regional or global supply chain visibility. in enhancing ‘track and trace’ capabilities - it Visibility across and into supply chain requires considered interoperability between operations is vital, because without it, many many different systems and technologies. of the activities involved with fulfilling This is made even harder as technologies a customer’s demand are inefficient or evolve and the systems used within the

billion

ANALYSIS

supply chain become more dynamic and sophisticated. The backdrop to this evolution is the explosion of data from multiple sources across the supply chain, and the most progressive and successful companies will try and exploit this to their advantage.

The incredible success of the Internet has unleashed a torrent of data and information across the world. It is a paradox that this general availability of data has both informed and obscured relevant ‘information’. This applies to almost all forms of human activity - sciences, arts, philosophy, etc. It is a trend that shows no sign of slowing down and highlights the need for clarity and various forms of filtering that can reveal the significance of some items of information and ignore the irrelevant. Editors and librarians are usually very good at this, and it is a skill that might be exhibited by an intelligent machine at some point.

Researchers are getting close to this, but fall far short of the cognisant reasoning of an average librarian.

The amount of data generated across a supply chain is huge, and is about to become even larger. To put this in some kind of perspective, consider this: According to Aureus Analytics, 90 per cent of the world’s data has been created in the last two years.

It is also estimated that by the end of 2015, 4.9 billion devices will be connected to the Internet, rising to 25 billion by 2020.

Manufacturing and transportation will be the sectors responsible for the largest and fastest growth. These devices will range from simple sensors monitoring heat, light and location, to sophisticated processing units capable of making decisions, communicating and initiating actions in response to external stimuli or programmed events.

Many organisations lack the capability, or necessary infrastructure, to manage this tsunami of data, much less exploit it to provide improved visibility to customers and partners.

Consumers in many parts of the world now carry a personal supercomputer for most of the day in the form of a smartphone.

Most of these are connected in some way to the Internet and consequently, to huge stores of data and information. This has profound impact on the way they interact with commercial enterprises. As manufacturing evolves into a demand driven, real-time

fulfilment activity, the supply chains technology platforms to support these supporting these operations are changing demands - this will be very challenging in in response. All of the enterprises involved some places. The value of data increases will require agile and adaptable information as accuracy improves, so everyone has systems platforms in order to participate. incentive to keep it up-to-date. This Alongside such systems, companies will also improves operations, creates customer trust need change their culture and operational and builds loyalty. service levels to benefit.

Previous generations of logistics To help organisations understand and information systems were primarily respond to these challenges, we need to document generation platforms. This was understand the challenges and opportunities because most of the industry depended on various technologies present to logistics and the flow of paper documentation. Some supply chain management executives. The of the more advanced systems introduced first of these is Mobile the ability to provide price Customer Engagement. quotations, along with the In many parts of the monitoring of simple process To help world people are carrying flows. The arrival of the a supercomputer in their internet completely changed organisations pocket in the form of a the game and the rapid understand and smartphone. Consider this: adoption of the technology by “In 1994, the combined the express parcel companies respond to these TOTAL number of illustrated the potential. They transistors sold worldwide connected their Track and challenges, we in PCs that year, was Trace systems to the internet need to understand and allowed their customers 1.2 billion.”

“In 2015, a single to see the progress of their the challenges iPhone 6 contains two shipments at any time. and opportunities billion transistors.”

It required huge levels of Due to the availability capital investment by them to various technologies of high-speed wireless create the network of systems present to logistics and scanners that captured networks, access to the Internet is ‘almost’ the track and trace data. But, and supply chain universal. The combination by allowing customers to management of a powerful computing directly view this information, device (smartphone) and they transferred the role of executives. ubiquitous connectivity customer service agent from to an infinite data and the company directly to the computing resource, will customer. This dramatically be profound. It will impact the logistics reduced the number of calls into the call industry in many unexpected ways. centres and highlighted the advantage of This universal data connectivity enables allowing customers to engage directly with activity at the edges of any physical the operational systems. It quickly became network to function as if they are adjacent normal to query pricing information, to book to the core. This means that operators and shipments and to obtain proof of delivery customers are immediately linked into the confirmations online. operational processes. This virtual closeness As a result, increased customer provides an immediate pathway for data, expectations caused logistics service information, instruction and feedback, providers to rethink what their systems amplifying the capability of any organisation needed to do. In short, an evolution from that takes advantage of it. essentially document production and process control systems, towards more flexible, agile and collaborative platforms.

Accountability As this evolution was taking hold, mobile Customers demand to know more – phones began to transform into handheld carriers must streamline and improve their

JULY/AUGUST 2015 43

14 – 16 September, 2015 Dubai, United Arab Emirates

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ANALYSIS

In 2015, a single

iPhone 6 contains But this is just the tip of the iceberg. Freight the market. They need computers, extending the to be agile, adaptable Forwarders, third party logistics service ability to capture data and and most importantly, providers (3PLs), and other players in the access information via any customer-centric industry, need to share information between cellular network. organisations. The themselves and out to their customers, This transformation goal must be to make partners and stakeholders. Rather than has occurred in parallel being concerned by the challenges this with the move away from customers both allies conundrum presents, they should consider production driven sales and evangelists of your transistors the opportunities. models, towards demand extended enterprise.

Starting with the customer, order and fulfilment models. In short, from shipment information can be shared and ‘pushing’ products into markets, to ‘pulling’ The agile enterprise augmented throughout the process. It’s not them through, in response to customer The challenge of scale and adaptability is unusual to have track and trace information demand. The Internet has enabled customers forcing many companies to examine the overlaid onto maps to show the location to signal their demand directly to the advantages of cloud computing. The cost of and progress of shipments as they transit product source, combined with the ability operating in-house data centres is becoming the delivery path. With the appropriate to immediately switch to another supplier unsustainable in comparison with using a systems in place, the operators, (carriers, if they cannot get exactly what they want, cloud service provider to do the same thing local drivers, etc.), shipper and consignee are when they want it. (except for some very specific instances). all linked into a quasi-social network where This approach is a profound challenge Alongside this, the operational applications communication can occur. to the inherent information systems used (the programmes that reside and run on the This is especially vital in dynamic by many organisations, many of which data centre infrastructure) are having to be environments where order demand requires were designed to streamline processes redesigned to exploit these new and virtually shipments to be rerouted, or when there is and operations for internal efficiencies. unlimited platforms. damage, or unexpected delays, or interruptions Connecting these sclerotic, process centric People have been seduced by the utility of to the schedule. The primary mechanisms environments to high velocity, very high many of the apps they use on their mobile for this to happen already exist as there are transaction customer interfaces (or apps), is devices and PCs. They don’t understand multiple apps performing similar actions in not easy and seldom ends well. To meet this or, more significantly, don’t care, that these other domains. This is also advantageous to the challenge requires a fundamental rethink of apps are linked to complex data stores logistics companies, as customers using these how a company organises its information and transaction processing systems, often tools are also sharing more information about systems and operational processes. It puts running on the other side of the planet. their operations as a consequence. the customer at the centre of any proposition, All they care about is that they can get As these tools become part of the and is much easier to do if you are starting the answer to their question, or issue an operational landscape, with a blank sheet of paper. instruction that makes the volume of data and In the business to consumer (B2C) something happen exactly information accumulated segment, Amazon is the best example of as they want. Customer The Internet has enables logistics operators to what is possible when this is done well. They centric organisations made a clear decision at the outset that the understand this and are enabled customers create more precise service solutions. The science of big customer would find interacting with the adopting the necessary to signal their data analytics is moving into company and using their services, as painless technology building blocks the mainstream to support as technology allows. Anything that could to make it happen. demand directly these activities. prevent or delay a customer from selecting, Logistics operators have to the product The earlier that purchasing and then receiving delivery of seen the results of access information about orders their goods was to be eliminated. Ideally a to online track and trace source, combined and shipments is captured customer should only have to ‘click’ once, systems. Customers now with the ability to in the process, the more and then payment and delivery would just expect any carrier to provide the information is happen. To a large degree they have achieved this kind of capability. While immediately switch accurate likely to be. This has huge this, and consequently it has been echoed by this is slightly easier to do large numbers of other retailers who have when dealing with single to another supplier benefits, as more accurate information helps to realised what was possible. shipments moving through if they cannot get improve clarity, avoid errors This has now created an expectation that the domain of a single and streamline processes. all online services should be as seamless carrier, it becomes more exactly what they A practical example of this as this experience. How companies and complex when shipments want, when they can be seen when a proof specifically logistics companies, can support are consolidated and moved of delivery confirmation these goals will be crucial to their success in via several different carriers. want it.

two billion

JULY/AUGUST 2015 45

automatically triggers payments to the interact with the customer, like delivery respective suppliers and stakeholders. drivers and customer service personnel.

By combining all parties into the They can also be incentivised to deliver information loop, problems can be identified an enhanced service via the mobile device quickly, helping to bring a resolution as directly linked to the controlling system. soon as possible. This is in contrast to the In many markets, transportation services alternative scenario of phone calls, emails rely on a large pool of sub contracted owner and queries trying to work out where drivers. Use of these resources lowers the something might be, what the problem is and cost of dedicated services, but also reduces who is responsible. This is still very common, the ability to monitor and manage service raising costs and frustrating customers. levels. Thanks to the advances in mobile Transparency and access to data across technologies, these independent contractors the network helps to establish trust between can now be linked and managed directly as partners. Trusted networks are generally part of the process. much more efficient and have higher levels of The taxi business is undergoing a seismic customer retention. This results in increased shift in many cities around the world as this revenues and reduced costs. principle is adopted on a wide scale. Drivers Network connected can download the relevant mobile devices are very app onto their smartphone, powerful communication complete a simple form This increases and sensor platforms. They and are then available as are the means to engage costs, causes delays a resource for hire, with every party in the chain. the system taking care of and disappoints All of the actors can be the booking and payment combined into a virtual the customer, with automatically. Customers can partnership tasked with then rate the driver via their the consequential delivering the service to the smartphone app and the best customer. This is particularly performers are highlighted. impact on brand important for the parts of In the case of logistics the operation that directly service providers, using loyalty.

46 JULY/AUGUST 2015

this approach to manage their pools of subcontractors has huge potential. They can operate as very agile and adaptable nodes on the network, receiving availability requests and jobs directly on their devices. They are then able to directly schedule the pick-up with the manufacturing facility or DC dock location, coordinating with other actors in the chain, and all the while keeping the client updated automatically. Depending on their performance ratings, micro bonuses could be applied to their accounts, encouraging consistent high performance. This should enhance the network performance overall.

The same principles apply to each and every other party in the logistics chain. Where goods are moved through multiple locations and handled by many different partners, whether at a cross dock or consolidation facility, the information ‘chain of custody’ is in sync with the physical one. The net result is that customers are encouraged to engage with the logistics service provider as a ‘partner’ rather than just a supplier.

Huge amounts of data demand investment in better systems All of these developments present a great opportunity for new logistics service providers, as they can build their business

ANALYSIS

around the idea of information services as a utility. They can do this at cost levels a fraction of what they would have been, say 10 years ago. This gives them tremendous flexibility and the opportunity to match the scale and capability of larger, established companies. It enables them to focus systems and resources on customers, with the flexibility to quickly adjust or enhance the solution in response to market conditions.

Established companies who already have large system installations, will have to decide how they can take advantage of these new services and interoperate with them or discard whole chunks of their enterprise technology platforms. This is a considerable challenge, but one they will have to address in order to compete with nimble and effective competitors.

In many emerging markets, logistics service providers can take advantage of these developments to establish systems platforms that deliver unparalleled levels of customer service. Providing relevant information directly to the mobile devices of all participants in the chain will be the operating norm.

Customers will use their mobile device to monitor progress, send instructions and query or resolve any issues with their shipments.

Over time, the logistics service provider will be able to examine the accumulated data to gain a greater understanding of the customers’ shipping requirements and any underlying signals indicating where operations can be improved. This proactive approach to customer service can be seen as delivering on the performance ‘promise’.

For the other parties in the logistics chain, the advantages of deploying mobile apps into their operations both increases accountability and enhances service levels.

Those companies that may be reluctant to engage with the logistics service provider using these technologies are also sending the signal that they distrust transparency in operations. This may not make them reliable partners on a long term basis.

For those parties that are prepared to engage in this way, they should also be able to use the data to improve their own operations. Mobile applications can reduce the amount of manual form filling or spreadsheet updates to a minimum. It avoids the need to pass information through numerous parties before it is entered into a system. This frequently results in incomplete or inaccurate data, causing problems and delays further along the information chain.

In some operational environments, especially those in public or general purpose facilities, access to dedicated staff is not possible. But through apps that can be downloaded onto a mobile device, even ad-hoc freelance staff can become an informed dedicated resource.

Instructions on the screen of a mobile phone can exploit the cameras, GPS and other sensors they have, so as to ensure shipments are handled appropriately and are consolidated and moved according to plan. Thus all leaving a complete audit trail of date, time, location, action, and operator.

With such a rich pool of information available, operational managers can enjoy a real-time view of operations,

issues and any problems, even if they are away from their desk. Using their mobile device, they can tap into business intelligence applications to determine the most appropriate options for resolving any issues.

Thanks to the direct connection between the app and their operating environment, they can initiate the relevant actions and, at the same time, keep the customer and any relevant parties fully informed.

Access to the rich pool of operational data on mobile devices, enables managers, partners and customers the ability to review the same information, at the same time.

This is especially helpful during contract negotiations, but on a day-to-day basis, gets to the cause of problems faster. This ensures the resolution is quicker and more coherent than if it is based on incomplete or inaccurate data spread across numerous spreadsheets, ad-hoc phone calls and disparate systems.

Customer first means mobile first When selecting a system, logistics service providers should consider how well any potential vendor incorporates mobile devices.

Accessing the vendors systems via a browser from any PC or mobile device is no substitute for a dedicated application designed for that device. Analysis has shown that users tend to spend more time using apps than they do accessing the same functionality through a browser.

Apps can also maximise the other functions of the mobile device, such as the cameras, GPS and location sensors and mapping apps. This is not usually available if you use the mobile devices browser. It is reasonable to expect that app developers understand that the mobile device will only increase capability as technologies evolve.

It’s an interesting maxim from computer science classes that computers should never have to ask for any information they are capable of collecting themselves. This applies particularly to mobile devices. How logistics service providers take advantage of these developments may well be the key to market domination. Working with vendors who understand this and have developed their solutions with an open customer centric mindset should be at the top of any selection list. www.transportintelligence.com

JULY/AUGUST 2015 47

RAIL UPDATE - KINGDOM OF SAUDI ARABIA

48 JULY/AUGUST 2015

RAIL UPDATE - KINGDOM OF SAUDI ARABIA

With just three years to go until the target date for the opening of a rail network carrying passengers and freight around the six countries of the GCC, its member states are looking forward to the economic and strategic benefits that this new connectivity will bring, but they also face some more immediate practical challenges in the short term.

By the numbers The GCC countries are united by language, religion, culture and geography, and have all been able to use revenue from hydrocarbons to attract foreign labour. However, Saudi Arabia is, by a considerable margin, the largest economy in the six-country confederation.

According to the World Bank’s ranking of countries by GDP for 2012, Saudi Arabia’s economy was only fractionally smaller than the combined GDPs of the other five countries. The Kingdom’s population of around 30 million is larger than the combined population of the other five member states, and the total landmass of the other five member states adds up to less than 20 per cent of Saudi Arabia’s area.

On track Each member state is responsible for constructing its own part of the new 6,000 km, UD$ 100 billion (AED 367 billion) GCC rail infrastructure. The objectives of the individual countries are twofold: they are clearly trying to maximise the benefits domestically, as well as contribute to the wider network. Rail engineers in Saudi Arabia have already started construction of parts of the

network of lines that will enable travellers to journey from Al Qurayyat near the Jordanian border in the north, to Riyadh in the south, and from Jeddah on the Red Sea, to Dammam on the Gulf. Pilgrims visiting the west coast will be able to travel at speed between Makkah and Medina via Jeddah and the King Abdullah Economic City.

The engineers have a lot of work ahead of them. The Saudi Railway Company’s network will consist of 2,750 km of track, 148 bridges, 2,900 culverts and more than five million concrete sleepers. It is also part of a much bigger transport infrastructure master plan. Metro systems have been commissioned to provide public transport in Riyadh and Makkah, and freight terminals are being built to connect airports, phosphate and bauxite mines, and agricultural and industrial cargoes to processing and export facilities on the Red Sea at the port being built at Ras Al Khair. The North-South Line alone, running from the Jordanian border to Riyadh, is 1415 km long and will carry up to two million passengers a year.

Beyond Saudi Arabia’s borders, the US$ 15.5 billion (almost AED 57 billion) project will enable goods and passengers to travel from Kuwait in the north to

JULY/AUGUST 2015 49

RAIL UPDATE - KINGDOM OF SAUDI ARABIA

ensure that member nations agree and adhere to a timeframe for completion.

Passports and visas Abdulla Al Nuaimi, the UAE’s minister of public works, said in January 2014 that a proposal has been made to allow passportfree travel across the network for all passengers, including both expatriates and locals. If the proposal is approved, it would mean that from 2018, when the tracks are due to be completed, passengers would be able to travel carrying their national identity cards rather than passports.“The idea of introducing the railway is to ease travel across the region,”Al Nuaimi said. In the UAE, Al Nuaimi said that a new law was being passed in time for the launch of the service that would cover various legal aspects relating to travel, including fares, Customs, border crossings and passport control.

Muscat in the south, and from the border with Yemen to the border with Jordan. The wider integrated GCC network, first agreed on by transport ministers of the six countries in 2008, will not only offer an alternative to air or sea journeys and avoid road blocks at border crossings, it will also open up the possibility of more porous borders for each country’s citizens.

Mega-Projects Across the GCC region, hydrocarbons wealth is being poured into mega-projects, with new airports, sea ports, industrial hubs, urban transit systems and skyscrapers being built to drive and accommodate more diversified economies and growing populations. The rail network is designed to speed up these advances, and to allow the countries to share collective benefits.

“Saudi Arabia is a huge market in the GCC and investors will want to tap into it,” said Fahad Al Turki, the head of research at Jadwa Investment.“There is a demand for Saudi products, whether it be milk or petrochemicals, in the GCC, so greater integration will help to open up the market for these.”

There will also be benefits for other countries within the bloc. According to Dubai Customs, Saudi Arabia was the top destination for its re-exports in 2012. The rail network will also give GCC citizens an

50 JULY/AUGUST 2015

alternative route to events such as the World Expo 2020 in Dubai, which is expecting 25 million visitors, and will need 45,000 rooms to accommodate arrivals. Two years later, the FIFA World Cup in Qatar will provide residents of the GCC with another attraction that will be within easy reach if the rail network is completed on schedule by 2018.

Efficient freight services linking the Red Sea with the Gulf, along the Saudi Landbridge being built from Jeddah to Dammam, will help shield the Saudi Arabian economy from any supply crises should any of the three seaway choke points of the Suez Canal, Bab El Mandeb or the Straits of Hormuz be threatened.

The GCC rail network will also enable Saudi goods to be imported and exported from the Port of Salalah in neighbouring Oman, the only facility between Singapore and Europe that can accommodate S-class container vessels. Shipping is the cheapest way to move freight, but rail will be faster as soon as the new network is up and running.

With just four years to go, only Saudi Arabia and the UAE have started building so far.

Oman’s section of the network is set to be 2244 km long and it will go through some of the harshest terrain on the peninsula. It is still in the design stage as of 2014, with construction not due to start until 2015. An overarching authority to oversee the GCC project is due to be formed in 2014, and part of its role will be to

Customs and currency A Customs Union was first established by the GCC in 2003, creating a free trade area with common external tariffs, but there is an ongoing debate as to how to divide up the revenue from those tariffs across the bloc.

The deadline for a solution is 2015, but before that happens, trade policies across the bloc must be unified. Speaking to the press after a May 2014 GCC meeting, Kuwait’s finance minister, Anas Al Saleh, said an agreement had been reached on the mechanism for distributing Customs revenues, although further studies needed to be carried out and would be reviewed at the meeting in September 2014.

The bloc is also working to fully implement the GCC Common Market, which was launched in 2008 to allow free movement of factors of production.

Citizens might also find that a new sense of interconnection will enable them to look further afield for work. A 2011 study found that only 21,000 GCC nationals were employed in another member state.

-Originally published by Oxford Business Group (OBG) in The Report: Saudi Arabia 2014, published in August 2014, Economy Chapter.

For economic news about The Kingdom of Saudi Arabia and other countries covered by OBG, please visit http://www.oxfordbusinessgroup. com/economic-news-updates

IATA INDUSTRY UPDATE

Aviation industry going from strength to strength

T

he good news is that the International Air Transport Association (IATA) has announced an upward revision of its 2015 industry outlook to a US$ 29.3 billion (almost AED 108 billion) net profit. But it’s not quite that simple.

On expected revenues of US$ 727 billion (AED 2,670 billion), the industry would achieve a four per cent net profit margin.

The significant strengthening from the US$ 16.4 billion (AED 60.2 billion) net profit in 2014 [re-stated from US$ 19.9 billion (AED 73 billion)] reflects the net impact of several global factors, including stronger global economic prospects, record load factors, lower fuel prices, and a major appreciation of the US dollar.

All regions are expected to see an improvement in profitability in 2015 compared with 2014. There are, however, stark differences in regional economies, which are also reflected in airline performance.“The industry’s fortunes are far from uniform. Many airlines still face huge challenges,” said Tony Tyler, IATA’s Director General and CEO. Over half the global profit is expected to be generated by airlines based in North America [US$ 15.7 billion (almost AED 58 billion)]. For North American airlines, the margin on earnings before interest and taxation (EBIT) is expected to exceed 12 per cent, more than double that of the next best performing regions of AsiaPacific and Europe.

“For the airline business, 2015 is turning out to be a positive year. Since the tragic

52 JULY/AUGUST 2015

Even as IATA predicts a positive outlook for 2015, the stark differences in the region, and globally, can have very different effects

events of September 2001, the global airline industry has transformed itself with major gains in efficiency. This is clearly evident in the expected record high passenger load factor of 80.2 per cent for this year. The result is a hard-earned four per cent average net profit margin. On average, airlines will retain US$ 8.27 (AED 30.12) for every passenger carried,” said Tyler.

“Let’s keep things in perspective. Apple, a single company, earned US$ 13.6 billion (almost AED 50 billion) in the second quarter of this year. That’s just under half the expected full-year profit of the entire airline industry. We don’t begrudge anyone their business success. But it is important for our stakeholders, particularly governments, to understand that the business of providing global connectivity is still a very tough one,” he added.

At the industry level, a significant milestone has been achieved with an expected return on invested capital (ROIC) of 7.5 per cent. For the first time, the industry-level average ROIC will be in excess of its cost of capital, which has fallen to 6.8 per cent largely due to lower bond yields. This industry average is, however, dominated by airlines in the United States, which have benefitted the most from the fall in US dollar-denominated fuel prices, a strong local economy, and industry restructuring. The average non-US airline is still struggling with returns below the cost of capital and a significant debt burden.

Main forecast drivers Fuel prices: The recent decline in fuel prices is a welcome development. The 2015 industry outlook is based on an average Brent crude

seen in a 0.7 per cent decline in the industry’s oil price of US$ 65/barrel (AED 238.74), overall revenues, which are expected to be which is 36 per cent below the 2014 price of US$ 727 billion (AED 2,670 billion) (US$ 733 US$ 101.4 (AED 372.44). Jet fuel prices are billion [AED 2,692 billion] in 2014). expected to decline at a slower rate for a full Passenger: The passenger business is year price of US$ 78/barrel (AED 286.49) expected to grow some 6.7 per cent in 2015, (33 per cent below the US$ 116.6 [AED an acceleration on the six per cent growth 428.27] level of 2014). Fuel still represents recorded in 2014. Passenger approximately 28 per cent of numbers are still expected the industry’s operating cost to top 3.5 billion for the first structure. And the full impact There are, however, time in 2015. A focus on of the fall in fuel prices is efficiency is seeing supply being moderated by a 20 per stark differences matched more closely than cent rise in the value of the in regional ever with demand and is US dollar over the past 12 expected to produce a record months, as well as by airline economies, high load factor of 80.2 per hedging policies, which have cent. A yield decline of 7.5 locked about half of the 2015 which are also per cent reflects the stiff fuel supply at higher levels. reflected in airline competition in the business, Revenues: The impact of but is exaggerated by the the stronger US dollar can be performance.

impact of the US dollar appreciation.

Cargo: The cargo business is expected to grow 5.5 per cent this year, which is a slightly slower pace than the 5.8 per cent realised in 2014. There was a strengthening of the cargo business in 2014 that continued into this year. Expected revenues – estimated at US$ 62 billion (AED 227 billion) – would have exceeded the US$ 67 billion (AED 246 billion) peak in 2011, were it not for the appreciation of the US dollar. The improvement is delivered through a volume increase with a record 54.2 million tonnes of air cargo expected in 2015. Yields are expected to fall around seven per cent this year (a decline that is again exaggerated by the strength of the US dollar). The longer-term prospects for air cargo remain challenging with a continuing post-financial crisis trend of slower trade growth relative to GDP.

JULY/AUGUST 2015 53

The regions All regions will see improved profitability in 2015 compared with 2014. They will also see capacity expansions, but these are expected to broadly match the expansion in demand.

This aligns with the global expectation for capacity to expand 6.2 per cent, slightly behind the projected 6.7 per cent increase in demand. Aside from these few similarities, the regions are expected to deliver widely divergent levels of profitability.

North America: Carriers in North America are expected to generate a profit of US$ 15.7 billion (AED 57.67 billion) (up from US$ 11.2 billion [AED 41.1 billion] in 2014) for a net margin of 7.5 per cent. On a per passenger basis, this translates to an average profit of US$ 18.12 (AED 66.55). Airlines in the United States have been able to use this profitability to invest in new fleet, pay down high levels of debt and deliver a normal return to investors through dividends and share buy-backs. This has been driven by the relatively strong economy, a restructured industry, and the lower oil price. The region is expected to see a three per cent growth in demand, although capacity is starting to pick up with an anticipated 3.1 per cent expansion.

Asia-Pacific: Carriers in the Asia-Pacific region are expected to generate a US$ 5.1 billion (AED 18.7 billion) profit for a 2.5 per cent net margin (US$ 4.24/passenger [AED 15.57]). Asia-Pacific airlines have about a 40 per cent share of the global air cargo market. Consequently, they have been disproportionately impacted by the doldrums in the air cargo industry. The slowdown in the Chinese economy has also had a dampening impact on profitability.

Demand is expected to grow a healthy 8.1 per cent, slightly ahead of the 7.7 per cent forecast growth in capacity. Lower fuel costs will help but the stronger dollar reduces the benefit in this region.

Europe: European airlines are expected to post a collective profit of US$ 5.8 billion (AED 21.3 billion) in 2015 for net margin of 2.8 per cent (US$ 6.30/per passenger [AED 23.14]). The prospects for airlines based in the region have improved slowly over the last two years. This is particularly true for network airlines serving the North Atlantic, which looks set to continue generating

54 JULY/AUGUST 2015

decent returns. Long-haul markets have been stronger than home markets, which have been depressed by the ongoing debt problems of Southern Europe. Economic growth is starting to pick up even in Southern Europe and has been adjusted upward in 2015. Airlines in the region are expected to add 6.5 per cent to capacity to meet a 6.8 per cent expansion in demand.

European airlines have benefited from lower fuel prices, but again this has been limited by the strength of the US dollar.

Consequently, growth in profitability is

lagging behind that of US airlines. And the region’s operating environment continues to be hindered by onerous regulation, high taxes, and both infrastructure deficiencies and inefficiencies.

Latin America: Latin American airlines are expected to return a net profit of US$ 600 million (AED 2.2 billion) for a net margin of 1.8 per cent (US$ 2.27/passenger [AED 8.34]). This follows breakeven performance in 2014. The region has delivered weak returns on average for the past few years, largely because of the very poor

IATA INDUSTRY UPDATE

black, this continues performance of key economies The longer-term the relatively poor like Brazil and Argentina. prospects for performance of the Significant exchange rate past few years. Last weakness against the dollar will air cargo remain year, traffic growth for substantially limit any benefits challenging with African airlines was from lower fuel prices. This year, demand for the region’s airlines a continuing post- weak because of various problems that disrupted is expected to grow 5.1 per cent, financial crisis tourism, but market slightly outpacing a five per cent share also continues to expansion of capacity. trend of slower be lost. Currencies have Middle East: Middle Eastern been weak, particularly airlines are expected to post a trade growth for oil exporters, so the collective US$ 1.8 billion (AED relative to GDP. benefits of lower fuel 6.6 billion) net return for 2015 for prices will be limited an average net margin of 3.1 per in this region. African cent (US$ 9.61/passenger [AED airlines are also expected to see the slowest 35.30]). The region’s carriers are expected to see growth among developing markets with a 12.9 per cent growth in passenger numbers capacity and demand expansion of 3.3 per this year, the only region with a double-digit cent and 3.2 per cent respectively this year. expansion. Airlines in the region have mixed fortunes, some loss-making, others profitable.

An improvement in profitability is also expected Connectivity, jobs, taxes, and to be driven by lower fuel costs. environmental performance Africa: African airlines are expected to The airline industry continues to add value post a collective profit of US$ 100 million to its customers, to the wider economy, and (AED 367 million) for a net margin of 0.8 to governments. per cent (US$ 1.59/passenger [AED 5.84]), Aviation’s global connectivity now the thinnest of all regions. Although in the spans 16,485 city-pairs (2014), which is

nearly double the number in 1994. This connectivity is a catalyst for economic benefits for users and the wider economy.

Over that same period, average airfares have fallen around 64 per cent (after inflation), which has been a major stimulus for trade, tourism, and foreign direct investment associated with global supply chains.

The number of aviation jobs is rising although the pace of hiring is expected to taper slightly in 2015. Total direct employment in the sector is expected to reach 2.5 million (up 3.1 per cent on 2014).

The total airline payroll in 2015 is expected to reach US$ 150 billion (AED 551 billion) (up from US$ 142 billion [AED 521.5 billion] in 2014). Compared with 2014, average unit labour costs are expected to fall 0.5 per cent in 2015 as productivity per employee improves 3.2 per cent. Airline employees are also extremely productive for the economies in which they work, generating gross value added (GVA—the company level equivalent to GDP) of US$ 96,753 (AED 355,368.93) per employee in 2015 (up 2.7 per cent on 2014).

The industry tax bill is expected to grow to US$ 116 billion (AED 426 billion) in 2015.

That is a 3.9 per cent increase on 2014.

Airlines’ environmental performance continues to improve. Airlines are expected to use 288 billion litres of fuel in 2015. In doing so, the industry is expected to emit 757 million tonnes of carbon. While that is a 4.6 per cent increase on the previous year, it i s well below the 6.7 per cent growth in passenger demand (RPK) and the 5.5 per cent expected demand growth for cargo (FTK).

This is expected to align with the industry’s fuel efficiency goal of improving its fuel efficiency by 1.5per cent annually to 2020. Investments in new aircraft are a major driver of fuel efficiency improvements. In 2015, airlines are expected to take delivery of more than 1,700 new aircraft worth US$ 180 billion (AED 661 billion). About half are expected to replace less fuel-efficient older aircraft.

The industry remains committed to achieving carbon-neutral growth from 2020.

This is in addition to a 1.5 per cent average annual improvement in fuel efficiency to 2020 and complements the long-term goal of cutting net emissions in half by 2050 (compared with 2005 levels).

JULY/AUGUST 2015 55

e c a In sp

A

s space policy and regulation becomes a significant industry issue, the players in the field are taking it seriously enough to discuss and sort these concerns. They will talk about all this and more next year in March, at the third Global Aerospace Summit, to be held in Abu Dhabi.

“Today, there are approximately 700 companies dedicated to commercial space exploration worldwide - up from 100 in 2011 – who build rockets, offer mission planning services and monitor planetary risks. Investors have ploughed US$ 10 billion (AED 36.7 billion) into the private space industry over the past 10 years, of which 75 per cent has come from venture capital funds and private equity firms. As the international space industry continues to grow, questions on space regulation and policy also increase.

The Summit will be looking to unearth some of the answers,” said Oisin Commane, Group Director, Streamline Marketing Group (SMG), which organises the invitation-only, thought leadership forum.

The international space law framework consists of five UN treaties and five main sets of principles. The foundational instrument governing all space activities is the 1967 Outer Space Treaty, which is signed by the United States, Russia, China, and more than 100 other countries – including the UAE, which established the basic legal precepts and principles for the utilisation of outer space.

The United Nations Office for Outer Space Affairs (UNOOSA), a UN body, serves to foster inter-state cooperation, manages adherence to the five UN treaties on space, and provides a forum for law and policy issues in respect to outer space. UNOOSA in Vienna is home to the Committee on Peaceful Uses of Outer Space (COPUOS), which holds frequent Legal Sub-committee meetings

56 JULY/AUGUST 2015

d n o y e b d an

space o r e a l ill tiona Interna ce experts w i a b and sp in Abu Dha d e ir n conve rch at the th mmit a u next M erospace S ly lA Globa ss the rapid ace p u to disc g shape of s . in chang nd regulation a policy plores. x GSC e

each year to discuss and address policy and regulatory issues related to the peaceful uses of outer space. The UAE actively participated in the latest Legal Sub-committee meetings in April as an official observer.

The Treaty specifically prohibits nations from deploying or stationing nuclear weapons in outer space or on celestial bodies, or even claiming real estate on them (ie, the Moon or Mars). In addition, it establishes national responsibility for private space ventures, ie, those activities conducted by private parties as opposed to governmental agencies. While there has not been much consensus on how private business in outer space should be regulated, this has recently become more of a focus for the industry. At the Canadian Institute of Mining’s annual convention, NASA scientists said exploration and prospecting of celestial bodies is still years away, but they agreed regulations should be established.

The increase of investment and interest within the industry has prompted the US Congress to lay the foundation for the new surge of space-based industries. The House recently passed the Space Resource Exploration and Utilisation Act (the Asteroids Act) to allow for companies to sell any resources extracted from asteroids in space, and provide some legal measure

of assurance for non-interference in these activities. The bill is the first national attempt at regulating non-governmental commercial activities directed at space resources. The Asteroids Act is undergoing legislative review with the Senate’s Committee on Commerce, Science and Technology to ensure compliance with international law. While the space industry is eager to move forward with proprietary regulation in the US, the Asteroids Act has yet to be enacted.

Regulation of private enterprise has traditionally been the province of national governments. Some have suggested that a United Nations panel be set up to regulate space mining. An alternative model might consist of a consortium of space-faring

ANALYSIS

legal difficulties, and whether an inter-state countries, or even non-governmental alliance or private commercial consortium stakeholders, establishing a celestial is established, any prospective entity must authority for governing and comply with the principles and obligations coordinating international endeavours in of the international space legal framework, space. This alliance could regulate private which holds space access and business, and otherwise use open to all countries for perform administrative peaceful purposes - under functions for space mining The UAE actively the principle that space is the outposts while coordinating ‘province of all mankind. On activities for non-interference, participated in the other hand, States Parties and foster a space resource the latest Legal to the Moon Agreement (the utilisation industry in the such as Australia commercial sector.

Sub-committee Agreement), and a dozen other states, face Sara Langston, an Aerospace lawyer and CEO meetings in April restrictions on space mining and resource utilisation as of Senmurv Consulting LLC as an official the Agreement prohibits commented,“These structural unbridled exploitation concepts are not without their observer.

activities, holding space and celestial bodies to be the ‘cultural heritage’ of mankind. A fine legal and political distinction.”

The UAE Space Agency recently announced it began developing the country’s space policy, regulation and legislation. Said Naser Al Rashdi, Director of Space Policy and Regulations, UAE Space Agency,“The UAE recognises the importance of the space sector for social, and economic development as well as in strengthening the nation’s security and crisis management. As part of the mandate, the UAE Space Agency has begun work on developing the UAE space policy, regulation and legislation. The key objectives of the space policies and regulations are to support transparency, stability and sustainable development in the space sector; to leverage the contribution of the space industry and the role it can play towards diversification of economy as well as towards the growth of other critical sectors. Moreover, the space policies and regulations aim to enhance robustness and competiveness of the commercial space sector in the UAE; strengthen security and international collaboration in space, and ensure conformity with international space related treaties, agreements and regulations.”

Carol Anderson from the International Institute of Air and Space Law, Leiden University, agreed. She said,“As a pioneer for the Arab world in space exploration and under the forward thinking government of the leaders of the UAE, it would be logical to expect that the UAE’s space policy and regulatory systems adopted will definitely be forward thinking. It will endeavour to create the optimum business and legal environment for fledgling space exploration businesses and private enterprise to flourish in the UAE, whilst remaining mindful and respectful of the progress achieved by its fellow spacefaring nations over the last 50 years.”

The Global Aerospace Summit, an exclusive, invitation-only event for the international aerospace industry, is expected to identify and discuss the rapid changes in space policy and their impact on the industry and the world. This premier thought leadership forum for the aerospace industry will be held at Abu Dhabi National Exhibition Centre from March 7-8, 2016.

JULY/AUGUST 2015 57

INDUSTRY STANDARDS

Driving

business Volvo Trucks offers one of the broadest range of driver courses in the industry with the launch of its Driver Development Programme.

58 JULY/AUGUST 2015

D

edicated and skilled drivers are proven to be more productive, drive more fuelefficiently, and recognise the importance of safety on the road. More such drivers are needed on the road, which is what prompted Volvo Trucks Middle East to offer a comprehensive driver development programme.

The idea is to train the trainers at the importers, to further educate professional truck drivers in the Middle East. The programme is focussed on increasing driver knowledge to enable safer driving practices on the region’s roads, greater fuel efficiency, increased uptime, and a reduction in environmental impact for businesses.

With a focus on truck innovation and safety, the Swedish premium truck manufacturer has developed one of the broadest range of driver specific training programmes in the industry, covering topics like health and safety, efficient driving skills and product knowledge. The Volvo

INDUSTRY STANDARDS

Trucks Driver Development Programme is run by qualified instructors in Sweden with extensive experience of the truck and transport industry. The programme is designed to educate regional trainers to train the drivers, in the region, on working with leading Volvo Trucks features such as I-Shift and Dynafleet, to ensure minimal internal energy is lost whilst optimising uptime and fuel consumption.

Said Ian Drury, head of the driver development programme in the Middle East,“A large percentage of our customer’s business success is dependent on the productivity of its drivers and fleet.

Today’s drivers do not just drive trucks they’re effectively driving businesses. Our programme can result in up to 10 per cent reduction in fuel consumption, improved vehicle uptime, greater safety for the driver and other road users, resulting in increased productivity.”

Safety for drivers and road users remain at the heart of Volvo Truck’s core values.

Poor driver safety education can put the lives of drivers and other road users at risk, while also affecting a business financially due to downtime, repair and insurance costs. The Volvo Trucks Driver Development Programme keeps safety at its core to ensure that truck drivers of every nationality in the region have a universal language of safety behind the wheel.

“We also gain from the use of Volvo Trucks specific features such as Dynafleet.

This service allows the customer to track the fuel consumption of their entire fleet, and help drivers improve their driving habits, reducing parts wear and tear, and keep safety, fuel efficiency and environmental care as a priority,” explains Drury.

Under the Driver Development Programme, Volvo Trucks trainers also learn about the brand’s newly enhanced and innovative gearbox. The I-Shift gearbox was upgraded with Volvo’s new FH, FM and FMX ranges in 2014. The first transmission of its kind is specifically

designed for heavy long haulage and construction applications. This new technology offers up to seven per cent fuel efficiency, and the combination of a well-trained driver and the I–Shift, can save businesses three per cent in fuel costs compared to a manual gear changing system.

In line with the Volvo Trucks new models, the Driver Development Programme has been tailor-made to cover all the latest innovations and technologies in the trucks.

The new models have been designed to provide an attractive working environment for drivers as they offer an enhanced experience in terms of handling, driving and resting comfort, as well as safety and drivability. The new range offers all-new cab suspension and engine suspension, making the driving experience more comfortable, as well as more precise for the driver. The models interior have also been redesigned; with colours and materials carefully selected to create a calm and attractive driving environment.

JULY/AUGUST 2015 59

UNWIND

Giving back a little Tristar Group launches first-ever Global CSR Week.

I

These in-house environmental improvement teams are committed to ensure that the company addresses and monitors routine issues of recycling, energy and water consumption, and also carbon footprint emission.

60 JULY/AUGUST 2015

t’s an important thing – giving back to the community, and it is with this in mind that the Tristar Group has launched its first-ever Global CSR Week. The Group celebrated World Environment Day (WED) and World Blood Donor Day from June 5 – 11, 2015, across its global network.

According to Tristar Chief Sustainability Officer Muhammad Akber, this year, the celebrations for WED were different for the company.“We have united globally as a company to conduct many activities for a week. We will have tree-planting and blood donation where feasible and where available. We will also have awareness campaigns on how to preserve our environment, and how to conserve the dwindling resources of Mother Earth,”he explained.

In the first two days, Tristar’s operations in the GCC, Africa, Asia-Pacific and Central America conducted WED with the theme ‘Seven Billion Dreams One Planet Consume with Care.’

Although World Blood Donor Day actually falls

on June 14, Tristar had an early celebration in the Pacific island of Guam, Haiti, Democratic Republic of Congo, Kuwait and UAE. In the UAE, the company conducted daily awareness sessions by its four environmental improvement teams - Oil Barons, Power Rangers, Camels and Recyclers. Said Akber, “These in-house environmental improvement teams are committed to ensure that the company addresses and monitors routine issues of recycling, energy and water consumption, and also carbon footprint emission. We have started monitoring our GHG emissions through our ERP system, and have introduced our first CNG dual fuel vehicle, which should add depth to our sustainability initiatives.”

A member of the United Nations Global Compact (UNGC), Tristar is finalising its third sustainability report, which it will submit as a Communication on Progress (COP), a public disclosure to stakeholders on progress made in implementing the 10 principles of the UNGC.

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