GLOBAL SUPPLY CHAIN MAY 2019 ISSUE

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May 2019 Issue 59

ENHANCING THE BUSINESS OF LOGISTICS

KINGDOM

CALIBRATIONS THE LOGISTICS INDUSTRY ON A ROLL IN SAUDI ARABIA

Dubai South

Bracing for EXPO 2020

King Abdulaziz Port Major Maritime Moves

UD Trucks

Unfurls the New Quester


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Saudi Arabia aims for pole position 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 Editor: Malcolm Dias malcolm@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

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Given its burgeoning oil revenues there is no doubt the Kingdom of Saudi Arabia, the biggest exporter, is the financial powerhouse of the region. With an annual fiscal budget close to US$ 300bn, the Kingdom can rightly stake claim to being the largest economy in the region. Traditionally, an overwhelming percentage of the revenues are derived from the country’s enormous energy endowment, its vast oil and gas reserves. That however is expected to change with a new reformist programme enunciated through The Crown Prince HRH Mohammed Bin Salman Bin Abdulaziz Al Saud’s spectacular and ambitious long-term ‘Vision 2030’. Saudi Arabia is transforming its economy with a bold diversification drive that is expected to broaden its oil revenues through a wide-ranging reform programme. As a case in point, the Kingdom has opened up opportunities in tourism and entertainment that are expected to spawn mega-capital intensive projects from resorts to hotels, cinemas, and other cultural attractions. A raft of many joint ventures (JVs) has been or expected to be announced in the foreseeable future. This would entail the privatization of several state-owned entities and encourage a new era of industrial development by rolling out mega-projects for resources and feedstock needed to construct greenfield manufacturing facilities. The logistics, supply chain and transportation sectors will also be among the biggest beneficiaries of the largesse and new investment that is being earmarked for developing new infrastructure and the enlargement and improvement of infrastructure, roads, ports and airports. Our current May 2019 Edition of Global Supply Chain looks closely at the burgeoning logistics landscape in Saudi Arabia in partnership with international business consulting Mountain View, California-based firm Frost & Sullivan. Elsewhere in this issue, following an invite, we travelled to Bahrain to cover the launch of the UD Trucks’ New Quester model, the newest workhorse from the manufacturer’s stable, across the MEENA Region. A series of thought leadership commentaries and contributions and a report on a recent E-Commerce conference provide the perfect roundup for examining the latest trends and new emerging technologies in the logistics segment in the region and globally. We hope you will be empowered by the read! Malcolm Dias Editor malcolm@signaturemediame.com

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May 2019 Issue 59

ENHANCING THE BUSINESS OF LOGISTICS

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48 FarEye looks beyond the horizons

26 06 NEWS 20 EZDubai Economic Zones Dubai (EZDubai) in Dubai South is proving to be the forerunner for an expected surge in E-commerce business in the near term future.

24 Honeywell’s buzz The US technology leader’s multiple core competencies, both airside and landside, were on full display at the recently concluded 2019 Dubai Airport Show.

26 Saudi Arabia – A Country Report A reformist, diversified, less oildependent economic agenda initiated by the Saudi Arabian Crown Prince HRH Mohammed Bin Salman Bin Abdulaziz Al Saud is the catalyst that is powering a refocus on the Kingdom’s logistics and transportation industry as it seeks to consolidate its potential, infrastructure and capabilities. 4 MAY 2019

Software solutions provider FarEye demystifies some popular myths in the road transportation sector.

36 E-Comm MENA 2019 Eminent speakers and leading stakeholders examine various facets of this effervescent industry which is forecasted to grow in double digits till 2022.

38 Dammam’s King Abdulaziz Port on a roll Saudi Arabia’s largest port in its eastern seaboard—the Arabian Gulf is creating waves with increased investment incapability improvement and diversification.

41 The New Quester from UD Trucks The New Quester from UD Trucks, recently launched for the MEENA region in the Kingdom of Bahrain, ticks all the boxes and has the credentials as a reliable workhorse.

46 Renault Renault Trucks has debuted its newest 2019 truck D, C, and K models in Egypt.

51 Volvo Trucks Driver Challenge The grueling annual Volvo Trucks Driver Challenge has a winner.

52 Port of Duqm The fast-emerging Port of Duqm in Central Oman is flaunting its multiple maritime capabilities.

56 Putting E-commerce travails under the scanner Professor Stuart Milligan from the University of South Wales in Dubai scrutinizes some vexing issues relating to E-commerce regionally and globally.

58 Tom Craig-Analysis Leading US guru on logistics and supply chain turns the spotlight on the growing success of Amazon and why it is proving to be a runaway success.

60 Etihad Cargo goes digital The UAE’s National Carrier is getting technologically and digitally savvy with the adoption of modern software solutions.



‘Traders Market’ launched in Dubai as part of China’s ‘Belt and Road Initiative’ The Vice President and Prime Minister of the UAE and Ruler of Dubai, HH Sheikh Mohammed Bin Rashid Al Maktoum, recently said that the UAE will play an

SNC-Lavalin appoints Craig Muir to top Middle East position SNC-Lavalin has announced that Craig Muir has been appointed President, Resources, effective April 08, 2019 reporting to Ian Edwards, Chief Operating Officer. As part of the Executive Committee, Muir is based in the United Arab Emirates and leads the company’s global resources sector, including oil and gas, and mining and metallurgy markets.

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integral part in pushing forward international efforts to enhance global economic growth due to its strategic location at the centre of trade routes connecting East and West.

With over 30 years of experience in the offshore and onshore oil and gas industry, Muir is a seasoned executive with world-class expertise in managing large-revenue, high-growth engineering businesses, as well as extensive project experience at some of the world’s leading consultancies. He has worked in many international locations from the UK to the Middle East, Commonwealth of Independent States (CIS) and Far East. “I am delighted to join SNC-Lavalin that

has established a global reputation of delivering some of the world’s leading projects in the engineering and construction industries,” said Muir on this occasion. Muir comes to SNCLavalin from Petrofac where he was the group’s Chief Commercial Officer and a member of their Executive Committee. Prior to his commercial role, he headed up Petrofac’s Engineering and Consulting Services business, where he was accountable for the delivery, performance, strategic growth and development of all reimbursable services.

HH Sheikh Mohammed’s remarks came during the launch ceremony in Beijing of the 60-mn square feet ‘Traders Market’, an international station for the Belt and Road Initiative in Dubai. The Chinese partner in the new market, located opposite the Expo 2020 site, will invest US$ 2.4bn in using the station to store and ship Chinese products from Jebel Ali to the world. The mega project further highlights the UAE’s key role as a strategic partner in China’s Belt and Road Initiative. It will include wholesale and retail outlets that help enhance regional and international trade through Jebel Ali. During his state visit to the People’s Republic of China as the head of the UAE’s delegation to the 2nd Belt and Road Forum for International Cooperation in the Chinese capital Beijing, HH attended the signing ceremonies of two agreements. The first was signed by DP World’s Group Chairman HE Sultan Ahmed Bin Sulayem and Weng Zhao, Chairman of Zhejiang China Commodities to use the ‘Traders Market’ to store and ship Chinese products to the world from Jebel Ali. The Chinese partner in the new market located opposite the Expo 2020 site will invest US$ 2.45bn in using the station to store and ship Chinese products from Jebel Ali to the world. The second agreement was signed by DP World’s Group Chairman with Ma Xuezhong, President of China-Arab Investment Fund Management Co. (Ningxia) and two other corporate stakeholders to create a US$ 1bn ‘Vegetable Basket’ project in Dubai to import, process, pack and export agricultural, marine and animal products to the world through the new Silk Road. The signing ceremonies were also attended by several senior officials including HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group; Dr. Sultan Al Jaber, Minister of State; Khaldoon Khalifa Al Mubarak, the Managing Director and Group CEO of the Mubadala Investment Company and Dr. Ali Obaid Al Dhaheri, the UAE Ambassador to the People’s Republic of China.


DP World UAE Region offers tailored solutions for the petrochemicals industry DP World UAE Region showcased its latest range of offerings for the petrochemicals and chemicals sector at the recently concluded 11th Gulf Petrochemical and Chemical Association (GPCA) 2019 trade show in Dubai. The company highlighted its new door-to-door logistics solutions that covered the full breadth of the supply chain and support customers every step of the way. These solutions are based on generating and leveraging synergies from integrating the activities of its numerous businesses –including Jebel Ali Port, Jebel Ali Free Zone, Dubai Trade, and many others thereby creating one of the most efficient and robust supply chains in the GCC. “The future is vibrant for the regional downstream petrochemical industry as it represents one of the fastest growing chemical markets globally. Through our seamless and efficient supply chain solutions, we are facilitating industry growth and competitiveness in global markets,” commented Mohammed Al Muallem, CEO and Managing Director, DP World UAE Region. The International Energy Agency has reported that global chemical consumption is expected to grow by almost 60% between 2018 and 2050 with the GCC accounting for 12% of all high-value chemicals, DP World indicated in a press communique. Through the ecosystem created between Jebel Ali Port and Jafza, DP World UAE Region offers customised solutions for its clients. These include a wide range of port solutions, port-

centric logistics and value-added services such as warehousing (DG-dangerous goods, Non-DG), ISO Tank storage, cargo mode conversion, transport management, order fulfilment, chemical blending, picking, bagging & drumming, tank cleaning and repair, and freight forwarding, among others. Jebel Ali Port and Free Zone together contribute 33.4% of Dubai’s GDP and 14.9% to UAE’s non-oil GDP, and its global portfolio offers customers integrated solutions with 78 marine terminals and nine logistics parks. DP World UAE Region is one of the leading hubs for the petrochemicals and chemicals sector in the Middle East. Jebel Ali Port handles over 65% of the GCC’s exports in this segment with connections to 140 ports with over 80 weekly services offered. Jebel Ali Free Zone (JAFZA) is home to nearly 500 petrochemical companies.

Dewan Architects and Engineers expands in South East Asia With South East Asian countries experiencing record growth and development and setting new standards for design and hospitality concepts, Dewan Architects and Engineers is making inroads in this fast-growing region. With the vast majority of their work over the past 35 years focused on the Middle East, with key markets in UAE, KSA and Iraq, Dewan Architects and Engineers is also known for its extensive work in Europe, Africa and parts of Asia. The architecture practice is now targeting South East Asia and will be applying their extensive knowledge to work closely with real estate developers there in order to further optimise the work being done in the region. Dewan Architects and Engineers currently operates a branch office in Manila. Established in 2007, it is presently staffed with over 60 BIM-qualified architects. “Philippines is a steady growth market with a fast-developing design scene,”remarked Ammar Al Assam, Executive Director, Dewan Architects and Engineers.

In line with its strategic plan to enter the region, Dewan recently inaugurated its office in Hong Kong with plans afoot to establish another office in Ho Chi Min City, Vietnam, in late 2019. “Our mid-term plan is to handle four to five projects a year from our existing design hubs, and at a later stage to establish a local office that would be self-sufficient in both business development and design,” added Al Assam. Additionally, Dewan Architects and Engineers has offices in Iraq, Kingdom of Saudi Arabia, and Barcelona.

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Historic US$ 1.65bn SharjahKhorfakkan Highway inaugurated New artery and several key infrastructure projects to boost Khorfakkan City on The Emirate’s East Coast HH Sheikh Dr Sultan Bin Mohamed Al Qasimi, Supreme Council Member and Ruler of Sharjah, accompanied by HH Sheikh Saud Bin Saqr Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah recently opened the new Khorfakkan highway. extending 89 kilometers and with an estimated cost of AED 6bn (US$ 1.65bn). The new highway is the latest addition to the world-class roads network of Sharjah and the UAE, linking the arterial Emirates Road (E611) in Sharjah with Wadi Shi Square in Khorfakkan. HH The Ruler of Sharjah and HH The

Ruler of Ras Al Khaimah inspected the intersections, tunnels and underground crossings of the new highway that passes through deserts, plains and mountains. The highway includes 14 intersections, and seven underground crossings along with five pairs of tunnels dug through high mountains. These include Al Sidra Tunnel (2700 metres),

Qafila launches UAE’s first digital freight-forwarder platform Qafila, the Middle East’s first digital freight forwarder, recently announced the availability of its digital freight forwarding services with live notifications and updates on a mobile app. The company was accepted by in5, an enabling platform for students, entrepreneurs and startups into its incubation programme in 2018. Qafila’s digital freight and logistics platform, the first in the region in this sector, is currently offering logistics support for FCL (Full Container Load) by ocean with plans to offer air shipments and LCL (Less Container Load) by mid-2019. It is designed to enhance customer experience, streamline operational efficiencies and provide around the clock customer support. Qafila’s platform offers shippers instant quotes, the convenience of online booking, management of shipment and finally track & trace across the supply

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chain with live notifications on a mobile app. This allows the shipper to create operational efficiencies, saving them not only time but costs in man-hours through

which is the longest covered mountain tunnel in the Middle East. Their Highnesses also inspected Al Rafisah Dam, one of the most important family tourism destinations in Khorfakkan. Spanning a total area of 10,684 square metres, it includes an outdoor seating area for 300 people and three playing areas spanning 410 sqm.

a very transparent process, a top company official revealed. “We have links with over 50 shipping companies globally to enable shippers to get real time quotes and help them to manage their supply chain processes, transparently and in real time. This includes point to point monitoring and updates on the mobile app,”commented Atif Rafiq, CEO and Co-Founder, Qafila. Qafila has been beta testing its platform with real users supported by offline services for supporting processes. Rafiq believes the platform can bring the freight forwarding industry into the digital age through transparent and efficient processes for operators across the region. “We believe quite strongly that enhancing customer experience and digitization is the key to the future of trade & logistics. In a region where governments like the UAE are pushing for Industry 4.0, AI and other smart initiatives across the country, saving time and money is important to success and growth of any business,”added Rafiq.


UAE and Saudi Arabia to boost investment in the maritime sector The first International Offshore Development Congress (IODC 2019) was hosted towards the end April at the Jumeirah Etihad Towers, Abu Dhabi. It discussed prevailing challenges and opportunities in the regional and international maritime sector at special sessions on both days. With the rising demand for freight handling, logistics, and other sub-services, the regional maritime sector is looking ahead into a brighter future. Saudi Arabia and the UAE particularly are becoming key shipping hubs with considerable investments into infrastructure and for their seafaring expertise. According to industry reports, the UAE has invested around US$ 65bn into the development of ports across the country in a bid to elevate its position as a maritime hub. Saudi Arabia’s maritime sector is set to receive a substantial boost with allocations under the US$ 8.8bn set aside for industries including logistics in its recently announced budget for 2019.

The UAE alone handles more than 15 million 20-foot equivalent units (TEUs) a year, and these numbers are steadily increasing as the region caters to about two billion people in China, India and the GCC as well as Russia and Eastern Europe. However, from increased regulations and overcapacity to port investment and infrastructure requirements, the shipping industry faces significant challenges as well. A special session at IODC 2019 hosted experts from shipping, carriers, freight forwarders, transport including Khamis Juma Buamim, Chairman, IODC 2019; Capt. Mohammad Ajjan, Fleet Manager OSV, Zakher Marine International; Jamil Al-Ali, Manager Fleet Engineering Group, Kuwait Oil Tanker Company (KOTC); Eng. Spyridon T. Lalaounis, Senior Manager, New Build Management, Bahri Ship Management; Vaibhav Gupta, Commercial Director, CTS Offshore & Marine Limited and other industry professionals. The key issues facing the region’s maritime and trade sectors were discussed with a

focus on evolving technologies that include artificial intelligence, industrial internet of things (IoT), autonomous surface vessels, block-chain, augmented reality, virtual reality, drones and robotics. The sessions also talked about sustainability and operational shift towards a greener future. Apart from this, the IODC 2019 brought together key industry stakeholders including NOCs (National oil companies), IOCs (International oil companies) as well as all other stakeholders relevant to the Oil and Gas offshore development. Organised by Arab Association of Petroleum Professionals (AAPP) and Maarefah Energy, the event was supported by DCMMI Emirates, World Ocean Council and the UAE Oil & Gas Safety Council.

data analytic requirements as part of their digital transformation initiatives.

“We are seeing a surge of interest in advanced data analytics within the Middle East and Africa. With the opening of our Dubai office, we look forward to better supporting local customers and partners as they Alteryx their data into actionable insights,”commented Abboud Ghanem, Regional Vice President, Middle East and Africa, Alteryx. Although many struggle with turning that data into actionable insights that drive business results, IDC reports spending on business intelligence (BI) and analytics software in the United Arab Emirates is set to reach US$ 42.24mn this year. This reflects a growing demand for analyzing large volumes of granular data that is helping to reinvent industries across the MEA region as they take advantage of the collected data in today’s digital economy.

Alteryx opens new office in Dubai to meet regional growth Alteryx, specialists in data science and analytics, recently announced it is expanding its footprint in the Middle East and Africa (MEA) with the opening of its new office in Dubai. Located in Dubai Internet City, the Alteryx MEA office was officially opened by Dean Stoecker, Chairman and CEO, Alteryx, who welcomed more than 250 executives at the launch event. As a part of its investment in the region and continued global expansion, the new office will further support the success of current and prospective customers as they evolve their

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The vessels have been ordered on the back of long-term charter contracts UAE’s oil and gas logistics leader Tristar Group has signed firm contracts for six new build 25,000 MT DWT, IMO Type 2 Oil and

Chemical Tankers with South Korea’s premier shipbuilder, Hyundai Mipo Dockyard. The vessels will be delivered between the middle of May 2020 and early January 2021. The vessels have been ordered on the back

of long-term charter contracts with oil major Shell. This follows Tristar’s acquisition of six new build, 50,000 MT DWT, MR Tankers from the same yard in 2016, also with long term charters with Shell. “Our business model will continue to be built around the needs of customers and we are confident that if we continue to offer best in class services at competitive pricing there will be immense opportunity to leverage the brand equity that we have built over the years,”explained Eugene Mayne, the founder and the Group CEO, Tristar Group. The vessels will be built to the latest specifications with an improved hull form design. They will meet all the latest regulations and are fitted with Tier 3 Engines to reduce emissions to comply with Tier 3 NOX requirements. The ships are expected to be operational in May 2020. Established in 1998 with headquarters in Dubai, UAE, Tristar is a fully integrated liquid logistics company specializing in petroleum and chemical handling and distribution. Its shipping business has seen rapid growth over the last couple of years and with the latest addition the company shipping fleet will grow to 23 ocean going vessels and eight coastal tankers. It operates in 20 countries and territories in the Middle East, Africa, Asia, the Pacific and the Americas and employs over 2000.

Tristar seminar in Riyadh stresses on driver safety

Kingdom. Tristar has been promoting road safety awareness in the United Arab Emirates (UAE) for several years in collaboration with the Centre for Responsible Business of Dubai Chamber and the Traffic Department of the Roads and Transport Authority. “I would like to thank Tristar for organizing this seminar, and creating this opportunity to share the knowledge and learn about road

safety,”expressed Miasem Bajowaiber, a civil engineer and the only woman speaker at the event held at the Hyatt Regency in Riyadh. Tristar is a fully integrated liquid logistics company specializing in petroleum and chemical handling and distribution. The company has an operating presence in 20 countries and territories in the Middle East, Africa, Asia, the Pacific and the Americas.

Tristar seals deal with Shell for six chemical tankers

All speakers at the recent Tristar Road Safety Seminar held in Riyadh, Kingdom of Saudi Arabia, reiterated that 95% of all road accidents are preventable because they are caused by human errors. Robert Burgon, Executive Head of Training at the Royal Society for the Prevention of Accidents or RoSPA, explained that drivers can avoid accidents by being focused while driving so that they don’t get distracted and make the right judgements especially at junctions and intersections. Tristar Group CEO Eugene Mayne said that to reduce road accidents and fatalities drivers should change bad habits like speeding, talking on the mobile phone and not following rules. He added that Tristar will continue to spread road safety awareness in the

10 MAY 2019


Abu Dhabi Ports has signed a Memorandum of Understanding (MoU) with Dell Technologies that will see the organisations combine their expertise in maritime and IT to develop technologybased concepts, solutions and services specifically for the maritime industry. The MoU with Dell Technologies is designed to provide Abu Dhabi Ports with consulting services and help them leverage high value-added technologies such as blockchain, and artificial intelligence (AI) to fuel their digital transformation journey. Over the past few years, Abu Dhabi Ports has made significant strides in harnessing innovative digital solutions for trade and port communities. In 2018, it launched Silsal, a blockchain-based solution aimed at streamlining trade flows and supply chains. The MoU was signed by Abdullah Al Hameli, Executive Vice President, Corporate Support, Abu Dhabi Ports, and Mohammed Amin, Senior Vice President, Middle East, Turkey & Africa, Dell Technologies. Present on the occasion was Michael Dell and the signing took place at the Dell Technologies World 2019 in Las Vegas – the annual flagship event hosted by Dell Technologies. “We are excited about the growth and opportunities created by the Fourth Industrial

Abu Dhabi Ports picks Dell Technologies to digitalise processes Revolution, and we are constantly striving to deliver products and services that transpose the latest emerging technologies into a maritime context,”remarked Al Hameli. “We are well positioned with end to end solutions to enable Abu Dhabi Ports modernize their IT infrastructure to efficiently operate their traditional applications as well as run their cloud native applications,”noted Mohammed Amin, Senior Vice President,

Middle East, Turkey and Africa at Dell Technologies EMC. “As Abu Dhabi Ports drives ahead with its digitization agenda, VMware, a Dell Technologies company, is excited to provide cutting edge technologies that will help Abu Dhabi Ports leverage the full strengths of its network,” commented Ahmed Auda, Managing Director Middle East, Turkey & North Africa at VMware.

environmental goals ratified by 193 countries, including UAE at the UN in September. “Since our inception in 1998, we made a commitment to be a responsible business and today this commitment underpins every decision we make,”Mayne declared at the workshop. Tristar is promoting SDG No. 3 on good health and well-being and No. 4 on quality

education with its road safety awareness campaigns in the GCC and with its support to the education sector in South Sudan and Kenya, respectively. Thawani presented compelling facts about the SDGs and inspiring stories of individual Leaders, Groups and Organizations who take a stand on social issues they care about and are making a positive difference across the world.

Tristar CEO calls for adherence to UN Sustainable Development Goals stresses on driver safety Tristar Group CEO Eugene Mayne has called on companies in the UAE to support the Sustainable Development Goals (SDGs) of the United Nations focused to end poverty, protect the planet, and ensure prosperity for all people of the planet. Speaking at the UN Global Goals Workshop, organized by International Quality and Excellence consultant Sunil Thawani, Mayne reiterated that business leaders must support the 10 Principles of the UN Global Compact (UNGC) ‘not just by lip service but by action.’ The 10 Principles cover four areas related to human rights, labor, environment and anti-corruption and directly contribute to the 17 SDGs, a set of economic, social and

MAY 2019 11


ACWA Power led consortium signs Oman’s largest utility-scale Solar PV IPP

Aramex Net Profit Rises 4% in Q1 2019 Aramex recently announces its financial results for first quarter ended 31 March 2019. Aramex’s Q1-2019 Revenues grew by 4% to AED 1,234 million, compared to AED 1,190 million in Q1 2018. Net Profit for the quarter rose by 4% to reach AED 108 million, compared to AED 103 million in Q1-2018. Net profit was negatively impacted by the amount of AED 10.6 million due to the implementation of IFRS16 and currency fluctuations. “We continue to benefit from the healthy growth in global e-commerce volumes; however, we have started witnessing pressure on International Express margins due to lower and more competitive pricing,” commented Bashar Obeid, CEO, Aramex. “In Q1-2019, we continued to improve operating efficiencies and accelerated our digital transformation efforts in order to enhance service levels, especially in the last-mile delivery. These initiatives will help us win in the long-term, as we will be able to handle more capacity more efficiently and at a lower cost,” noted Iyad Kamal, COO, Aramex. Aramex’s cross-border International

12 MAY 2019

Express business grew by 7% to AED 533 million. This performance is mainly attributed to the continuous growth in cross-border e-commerce, which registered double-digit growth across most of Aramex’s markets, mainly Turkey, Asia and North America. Shipment volumes surged by 22% in Q1-2019, yet lower margins prevailed.

A consortium composed of ACWA Power, GCC-owned Gulf Investment Corporation (GIC), and Kuwait-based Alternative Energy Projects Co. (AEPCo) has executed the project agreements for the development of Ibri-2 Independent Power Producer (IPP) with the Oman Power and Water Procurement Company (OPWP). The project, to be developed on a BOO (build, own, operate) basis, includes the development, finance, construction, and operation of the 500 MWac solar PV power plant. The project will be located around 300km west of Muscat, and will contribute towards increasing power supplies in the Sultanate. OPWP awarded the project to the winning consortium following an international competitive tendering process that included 12 qualified bidders. The winning consortium submitted the best economic tariff for the electricity that will be sold to OPWP. ACWA Power is the lead investor in the project with a 50% stake, whereas GIC will have a 40% stake and AEPC will control the remaining 10%. The project will be the first utility scale solar power project in Oman and will utilize Solar PV technology to yield 500MWac of power. At peak generation capacity, the plant output will be enough to supply an estimated 33,000 homes with electricity and will offset 340,000 tonnes of carbon dioxide emissions a year. “We look forward to collaborating with our partners and Omani stakeholders to successfully complete this project,” said Paddy Padmanathan, President and CEO, ACWA Power. “Our winning bid for Ibri II Solar PV IPP is a continuation of the progress ACWA Power is making in developing and securing our clean energy footprint in the region,” said Rajit Nanda, Chief Investment Officer, ACWA Power. “GIC is proud to develop alternative and clean utility-scale solar energy project in the GCC,”remarked Meshary Al-Judaimi, Division Head of Financial Services & Utilities, GIC. “This project also demonstrated the Sultanate of Oman’s long term vision in sourcing renewable energy and encouraging investment in the sector,”commented Dr. Hassan Qassem, APECo.


Bahri to make further forays in the Asia-Pacific region Bahri has announced the expansion of its market presence in the Asia-Pacific (APAC) region’s maritime industry. The stronger presence will help the company gain deeper insights into market trends as well as customer needs in chemicals and logistics sectors in Singapore and the wider APAC region. The announcement took place at a recent ceremony held in Singapore, in the presence of Abdullah Aldubaikhi, CEO, Bahri, and senior executives of the region’s oil majors, petrochemical trading companies, and ship brokers. The expansion will also enable Bahri Logistics and Bahri Chemicals, two of five business units of the company, to market their offerings, acquire new clients, serve existing clients, and channelize the communications. Bahri has plans to expand the services of its other business units to the APAC region in the future. “Our expansion in the Asia-Pacific

region represents a key milestone in our journey, and with this, we have come even closer to our customers, allowing us to serve them better offering a wider range of industry services and unprecedented value,” remarked Aldubaikhi. Claus Breitenbauch, President, Bahri Chemicals and Khalid Al Garawi, Senior Manager, Bahri Chemicals also addressed the conference. Bahri Chemicals is the largest owner and operator of chemical carriers in the Middle

East, serving 150 ports worldwide. It owns and operates 36 chemical and product tankers with a capacity of 1.1 million DWT designed to the highest specifications, capable of carrying a wide range of chemical cargoes. The first business unit within the Group, Bahri Logistics, is one of the top 10 breakbulk carriers in the world and operates six new state-of-the-art multipurpose vessels with 26,000 DWT each on a regular liner schedule.

vehicle and topographic data in real-life applications and transmits it to Continental experts for analysis. With the aid of the GPS-generated data, Continental field engineers will be able to identify whether a tyre is being overloaded or underused and thus extend tyre lifetime and adapt operational processes so that overall

productivity is increased.“We see this as extremely important in the OTR earthmoving business, where conditions are exceptionally harsh and the high cost of replacing tyres means that proper tyre servicing and consulting are essential,”commented Enno Straten, Head of Continental Commercial Specialty Tyres (CST).

Continental introduces its new monitoring tool to the Middle East Continental has announced that its newest technological innovation, ContiLogger, is set to arrive in the Middle East in the second half of this year. Targeting Off-The-Road tyre (OTR) customers, Continental’s new consultancy concept offers cost-effective analysis of cycle downtime, distance, speed, lateral forces, cornering and road grade, enabling optimised route management and perfectly coordinated tyre use. Making its world premiere at the world’s leading construction machinery trade fair BAUMA 2019 (8 – 14 April), ContiLogger combines tyres, hardware, software, data and manpower into an individual consulting service approach. Using a range of components including GPS, the new system captures data such as tyre pressure, tyre temperature and

MAY 2019 13


DEWA adds 700MW to the largest power and desalination plant in UAE HH Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and President of Dubai Electricity and Water Authority (DEWA), recently inaugurated the extension project of M-Station in Jebel Ali, the largest power and desalination plant in the UAE. Saeed Mohammed Al Tayer, MD & CEO

of DEWA, noted that the total cost of M-Station with its extension reached AED 11,669 billion with a current production capacity of 2,885 megawatts (MW) and 140 million gallons of desalinated water per day. The expansion cost AED 1,527 billion and added new generating units with a capacity

of 700MW. The extension design has a 90% fuel efficiency rate. This project has been completed with over 20 million safe man hours without Lost Time Injury. Al Tayer thanked DEWA’s partners, especially Siemens, which implemented the project and Mott MacDonald, the project consultant. “The completion of the Jebel Ali M-Station expansion marks another milestone in the long history of Siemens and DEWA as strategic partners,”said Dietmar Siersdorfer, CEO, Siemens Middle East and UAE.

avail exclusive benefits upon attaining Silver, Gold or Platinum Tier Status with PayloadRewards. More enhancements to the ‘earn and redemption’ opportunities will be progressively rolled out. Etihad Cargo is also revealing a renewed

Global Customer Programme, which allows global freight forwarders to partner with Etihad Cargo on three distinct tiers: Global Account, Global Plus and Global Partner, each holding a range of differentiated support levels. “These programs have been designed to reward growth, trust and consistency, embedding a renewed customer-driven culture into Etihad Cargo’s modus operandi,” said Haleema Al Hosani, Senior Manager Global Accounts & Loyalty, Etihad Airways. This latest reveal forms part of a wider review that Etihad Cargo undertook in 2018 to overhaul its commercial offering and align more closely with its customers’ objectives. This entailed the launch of two additional products (FlightValet and FreshForward), the attainment of CEIV Pharma (the first carrier in the Middle East to do so), as well as a refreshed freighter network adding key capacity on core trade lanes demanded by its customers.

Etihad Cargo rebrands cargo loyalty scheme Etihad Cargo has revealed a new Global Customer programme and a rebranded its cargo loyalty scheme named ‘PayloadRewards’. Launched in 2013 as one of the first dedicated loyalty programs for air cargo customers, Etihad Cargo’s revamped PayloadRewards is considered one of the world’s leading loyalty schemes with more than 5,300 active members from 74 different countries. With PayloadRewards, members will continue to earn miles as before, with an additional opportunity to start earning bonus miles for general cargo and premium cargo booked through Etihad Cargo’s new online booking portal at www.etihadcargo.com In addition, similar to the awardwinning passenger loyalty program Etihad Guest, cargo customers can now

14 MAY 2019


Aramex opens new E-commerce Fulfillment Centre in Dubai Company’s FY2018 revenues register 18% increase Aramex has launched a new, partially automated fulfillment centre in Dubai to support the rapid growth of its E-commerce business with B2B retailers. Located in Dubai Logistics City and covering 60,000 square meters, the temperature-controlled centre is one of Aramex’s largest fulfillment warehouses across the region. It features new technologies including a ‘Pick to Light’ system, which uses lightdirected picking technology to improve accuracy and efficiency, and an automated conveyer belt system. “Aramex’s new fulfillment center is an important investment that will help support the rapid growth of our logistics business and our retailer’s omni-channel sales

strategies. The facility’s cutting-edge technology strengthens our position by ensuring fast, seamless and reliable fulfillment,” remarked Iyad Kamal, COO, Aramex. “The centre will expand our global logistics capacity and enable us to help more start-ups and established businesses receive process and deliver orders to customers through effective supply chain management,”noted Saeed Mukhtar, Global Head of Logistics, Aramex. In FY2018, the company’s Logistics and Supply Chain Management revenues grew by 16% to AED 302 million over corresponding FY2017 figures, due to the strong demand for Aramex’s warehousing and other valueadded services across key markets.

Solutions for a healthy world Tranzone operates a state-of-the-art 3PL warehouse in Jebel Ali Free Zone. We have partnerships with the leading pharmaceutical, medical device and animal health companies around the world.

Healthcare Logistic Services: Air Freight Sea Freight Land Transportation Value Added Services Warehousing & Distribution Return logistics Documentation Tranzone FZCO (Member of Banaja Holdings)

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Web: www.tranzone.ae MAY 2019 15


Momentum Logistics commemorates a decade of operations Momentum Logistics, a subsidiary of UAE-based Gulftainer, recently marked its 10th anniversary as a leading third-party logistics (3PL) services provider. Momentum Logistics offers an integrated suite of supply chain management solutions including transportation, freight forwarding, warehousing, logistics cities and container

RAKEZ refocuses on India and the Indian business community Ras Al Khaimah Economic Zone (RAKEZ) has welcomed Ravi Shastri, Head Coach of the India National Cricket Team, former Indian cricketer and TV commentator, as its exclusive Corporate Ambassador to the Indian business community. “I’m confident that Ravi will take our relationship with the Indian business community to the next level – a relationship we started building almost two decades ago,” said Ramy Jallad, RAKEZ Group CEO. “Our ongoing efforts have led to over 3,300 Indian companies choosing RAKEZ as their business destination. That’s 23% of our total company population. With Ravi

16 MAY 2019

services. The company has a client base of over 500. “As we mark our 10th anniversary, it is encouraging to note that we continue to build credibility both at home and abroad,” stated Stuart Mainland, General Manager, Momentum Logistics. Momentum Logistics was established

in December 2008 to support Gulftainer’s terminal operations. Since its inception, the company has expanded its scope and secured independent logistics contracts around the world, including in the UAE, Saudi Arabia, the US, Iraq, Turkey and Pakistan. With operational headquarters located at the Sharjah Inland Container Depot (SICD), Momentum also operates in Port Canaveral in the US state of Florida as part of Gulftainer’s global portfolio. The company has continued to invest heavily in organic growth as well as global expansion. In the past year, it introduced new Scania tractor units and the latest Europeanstandard curtain-sided trailers in a bid to enhance its transport fleet. Momentum Logistics has also continued to expand operations in international markets, including at the Umm Qasr Logistics Centre in Iraq, where the company now offers storage solutions for both chilled and frozen products. In addition, Momentum provides services through its container inspection and repair division, Gulftainer Container Repairs (GCR), across Gulftainer-run terminals in Umm Qasr in Iraq and Jeddah in Saudi Arabia. The company is currently working on developing the Saja’a Industrial Investment Park (SIIP), Gulftainer’s first leasehold initiative, through a multimillion-dirham investment in building a highway that will connect the facility with the rest of the UAE’s road network.

joining Team RAKEZ, we are positive that he will be influencing more Indian business leaders to set up or expand their operations to the United Arab Emirates though RAKEZ,” commented Jallad. Indian companies in RAKEZ are operating across various industries with over 1,600 in the commercial field; nearly 1,000 in services; more than 350 in general trading; and around 100 in the industrial sector. The rest are spread across media, e-commerce, educational, and more. Its Mumbai office, established in 2006 has since been relocated its Mumbai office to a bigger and more central location in BandraKurla Complex (BKC) in 2018. “My goal here is to coach more Indian investors to choose RAKEZ and play it right when it comes to their business,”remarked Shastri.


ACWA Power has signed strategic agreements with three Chinese enterprises on the sidelines of the second Belt and Road Forum for International Cooperation (BRF). The agreements with PowerChina, China Gezhouba Group Company (CGGC) and Bank of China will lay the ground for collaboration in key investments and further involve Chinese expertise in manufacturing power generation and desalinated water production plants that ACWA Power develops and operates. “The sum of growing collaborations between ACWA Power and Chinese entities only solidifies the relationship of trust and companionship between us and our Chinese partners,�said Paddy Padmanathan, President and CEO ACWA Power. The first of three agreements was signed with Wang Lujun, Chairman, SEPCO III. This Engineering, Procurement and Construction (EPC) contract grants SEPCO, a subsidiary of PowerChina, to serve as the EPC contractor of Al Taweelah desalination plant located in Abu Dhabi.

ACWA Power signs strategic agreements with three Chinese enterprises

ACWA Power entered into an agreement with China Gezhouba Group International Engineering Company (CGGC). Mohammed Abunayyan, Chairman, ACWA Power, signed a Cooperation Agreement with Lyu Zexiang,

Chairman, CGGC Intl which outlines that CGGC was announced as the official EPC contractor in 2018 for Nam Dinh 1, a greenfield Independent Power Project (IPP) located in Vietnam.

MAY 2019 17


Emirates SkyCargo transports a priceless historical artefact between Pakistan and Switzerland

Between December 2018 and March 2019, visitors to the Museum Rietberg in Zurich, Switzerland, had the rare opportunity to come face to face with a colossal statue of Buddha more than 2,000 years old. The statue from the Peshawar Museum in Pakistan was safely transported from its home

to Zurich and back by Emirates SkyCargo. The ancient Gandhara Buddha statue was given on special loan by the Peshawar Museum to feature in the exhibition ‘Next Stop Nirvana- Approaches to Buddhism’ at the Museum Rietberg. It was the first time that the statue had travelled outside of Pakistan. Emirates SkyCargo pulled out

Awok.com closes US$ 30mn funding to boost growth

expansion into Saudi Arabia, to enhance the Awok platform empowered by technology development, and to increase Awok’s offering across multiple product categories to cater to the growing demands in the region. It will help reinforce Awok’s team, including attracting global talent and raising the level of customer experience and after sales support. In the near future, Awok will also scale its operations across key growth markets in the GCC countries and North Africa, to bring the same outstanding level of timely service to these locations on the deal, the company revealed in a statement. “These are truly exciting times for Awok which we founded 2013. We have been pioneers in servicing a previously untapped segment of the market with a unique product selection,”remarked Ulugbek Yuldashev, founder and CEO, Awok.com

Awok.com, a leading UAE mass market e-commerce platform, has closed its first external round of financing to pursue its ambitious regional growth plans with the vision of providing consumers with timely and seamless access to value products across the Middle East and North Africa. The US$ 30m financing round is jointly led by StonePine ACE Partners out of its StonePine ACE Fund – a joint venture between StonePine Capital Partners and ACE & Company SA – and Al Faisaliah Ventures, the newly created Corporate Ventures Capital arm of Al Faisaliah Group. The deal is also co-invested in by globally renowned investment group Endeavor Catalyst. The new capital raised will be mainly used for further geographical

18 MAY 2019

all the stops to make sure that the statue weighing 1,700 kilograms, and reaching over 2 metres in height, was transported safely in the bellyhold of its wide-body passenger aircraft through handling processes and security measures outlined under Emirates Valuable, its specialised product for transporting precious goods. “Our standard procedures mention that any precious cargo has to be transported in secure metal door containers. However, for a statue of this size, this was not really an option,”said Julius Mooney, Commercial Development Manager – Speciality Products, Emirates SkyCargo. Emirates SkyCargo also worked with Emirates Group Security and Transguard to ensure seamless security screening, handling and clearance for the statue. The shipment was also monitored continuously by Emirates SkyCargo’s 24X7 operational Cargo Operations Command Centre to pre-empt and avoid any potential obstacles during transportation. Emirates SkyCargo executed the first leg of the movement from Peshawar to Zurich in December 2018 and completed the return leg from Zurich in early April 2019.


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EZDUBAI

Paving the way for E-commerce proliferation

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he ambitious vision of HH Sheikh Mohammed Bin Rashid Al Maktoum, The Vice President and Prime Minister of the UAE and Ruler of Dubai, is manifest in this imposing, ambitious edifice steadily emerging in Dubai South’s Logistics District. Global Supply Chain spoke exclusively to Mohsen Ahmad Al Awadhi, CEO, Logistics Ditrict, Dubai South, on the sidelines of the Seamless Middle East 2019 Ecommerce Exhibition and Conference. GSC: Give us an overview of EZDubai and what are its main objectives? Mohsen Ahmad Al Awadhi (MA): EZDubai (Economic Zones Dubai) is a 920,000 square-metre purpose-built E-commerce zone within Dubai South’s Logistics District targeted to provide a range of logistics facilities and business solutions for startups, SMEs,

20 MAY 2019

innovation labs and incubation centres that support business activities of local, regional and trans-continental companies serving both business-to-business and end consumers. It has six dedicated areas of more than 550,000sqm leasable for E-commerce and a range of business centers such as last mile, e-fulfillment, repair & return, and supply, as well as business blocks (shared buildings), and business blocks for regional headquarters. Once fully developed, the AED 2.1bn (US$ 572mn) project is expected to help bolster Dubai’s position as a strategic hub for E-commerce. GSC: What is the current scenario in the UAE and the wider GCC on the E-commerce industry? MA: Over the past 10 years, E-commerce trade has increased by a staggering 1,500% across the Middle East. Experts in the market have


EZDUBAI

Panoramic view of Muscat

Economic Zones Dubai or EZDubai in the rapidly rising Dubai South enclave, home to the Dubai Expo 2020 venue, is gearing up for the expected surge in E-commerce business through development of the required infrastructure and amenities projected the region’s E-commerce sector will continue to grow from the current US$ 7 billion market value up to US$ 24 billion by 2022. The Majority of transactions comprising over 70% serve online purchases made by consumers in the ‘under 30’ age group. In terms of sector, electronics is the largest market in the GCC and Egypt valued at US$ 2.9 billion, growing 23% annually, while fashion follows at US$ 1.1 billion, with an annual growth of 20% annually. In terms of market behavior, nearly 56% of consumers based in UAE, Saudi Arabia and Egypt start their online shopping journey using search engines as opposed to going straight to retailers’ websites and 55% of shoppers in these countries prefer to use smartphones when shopping online. The UAE remains a leader in E-commerce growth – the country is expected to generate 50% of E-commerce sales in the region. It boasts of high level of regular purchasing from 60% of residents, spending

more than three times on single orders and with an average amount of above US$ 300, which is higher in comparison to other countries. GSC: How will creating a free zone for E-commerce boost businesses? MA: A dedicated free zone will further facilitate the growth of the sector in the region as global consumer demand continues to grow across all demographics, coupled with the increasing competitiveness of smart technology. As a unique industry, it impacts shopping habits, logistics, urban planning and property development by providing convenience to consumers, thereby driving the shift in consumer attitudes. The free zone will further enable retailers to serve their markets better. A dedicated free zone will enable E-commerce businesses find common platform to quickly address emerging challenges in the

MAY 2019 21


Mohsen Ahmad Al Awadhi CEO Logistics District Dubai South Mohsen Ahmad oversees Dubai South’s entire Logistics District as its Chief Executive Officer, leading the overall execution of all operations, and managing its financial planning. He is responsible to set the strategic directions and goals of the District and lay the groundwork for future developments of the district to ensure sustainable growth. He joined Dubai South in 2008, following more than 10 years of experience within the supply chains and logistics sector, holding management posts at Al Futtaim Logistics and Dubai Aluminum Company (DUBAL) as Head of Inbound Logistics. Ahmad has set his sights early on to a career in supply chain and logistics, having completed his Bachelor’s Degree in Logistics and Transportation from the University of Tennessee in the United States and earned a Master of Science Degree in Logistics and Supply Chain Management from Cranfield University School of Management in the United Kingdom. He is currently a fellow member and was previously the Secretary General of the Chartered Institute of Logistics and Transportation (CILT) in the UAE.

22 MAY 2019


EZDUBAI

constantly changing business environment. Having a gateway such as EZDubai will help the sector leverage free zone assets, network, and connection with trusted providers of product or services and become an integrated platform that will allow businesses to manage and improve the business. GSC: What capabilities and facilities can EZDubai provide to address E-commerce needs in the region and attract the biggest E-commerce companies? MA: The strategic location of Dubai South’s Logistics District presents global companies the distinct advantage to easily access key regional markets in the Middle East, Africa and South Asia (MEASA). EZDubai has the support of a strong aviation linkage with leading international airlines serving Europe, India and Africa. It has all the right elements to efficiently implement fast-paced transactions for today’s businesses.

It provides direct access to top-quality and leading last mile providers where fulfillment can take place in hours, not days. This serves the supply chain network with huge time lead and cost-efficiency benefits. EZDubai is designed as a ‘plug & play’ ecosystem, equipped with worldclass physical and digital infrastructure, business-friendly regulations and policies, and availability of global talents. It has also the scalability to accommodate growth for companies. The free zone enjoys generous government support through streamlined customs and licensing processes. For instance, warehousing facilities are developed with the ‘Dual Licensed’ capabilities and hybrid warehouse facilities enable companies to consolidate both onshore and offshore activities under one centralized location. It features facilities that adhere to today’s business needs to run sustainable businesses. It follows the Al Sa’fat Dubai Green Coderated system featuring district cooling, solar PV, and Grade A international specifications.

Among other business setup benefits include 100% foreign business ownership; 100% capital repatriation; 100% corporate and personal tax exemption; 100% import and export tax exemption; and a secure legal environment with transparent rules and regulation. GSC: What are some of the positive initiatives you have seen by Dubai South that is encouraging businesses to open there? MA: Dubai South has been proactively promoting various initiatives to boost business activities of its partners such as startups, SMEs and multinational companies. Recently, the Dubai Aviation City Corporation (DACC), the licensing and regulatory body for Dubai South free zones, opened new opportunities for individual professionals in specialized sectors to secure permit to work under a freelancing scheme, following global trends of a growing number of professionals who choose to have flexible working hours and work-fromhome agreements. Dubai South’s range of business services offer customized solutions and incentives that enable a wide range of businesses opening in the city to meet their specific requirements. Dubai South’s Business Park also has an ongoing program that help connect multinational companies (MNCs) to SMEs at the Dubai South Business Park where a common platform to network is provided for both such as engagement sessions and periodic workshops. GSC: How does EZDubai differentiate itself from other free zone facilities? MA: EZDubai as a free zone complements the need of other businesses located in major other free zones in the UAE and across the region. It provides especially dedicated facilities that would enable a wide range of businesses seeking to meet their need for proximity to world-class transport and logistics infrastructure such as the Al Maktoum International Airport and the Jebel Ali Port. EZDubai is designed to become a full E-commerce ecosystem enabling both B2B and B2C fulfillment, locally, regionally and globally.

MAY 2019 23


AIRPORT OPERATIONS TECHNOLOGIES

Honeywell showcases IOT-enabled solutions for Smart Airports of the Future Honeywell recently showcased the Internet of Things (IoT)-enabled airport solutions for smarter, safer and more secure airport operations at the recently concluded Airport Show 2019 in Dubai. There, the company demonstrated advanced technologies that integrate terminal landside and airside operations

24 MAY 2019

Sonja Strand, Vice President and General Manager, Honeywell Global Airports Business

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ith continued growth in passenger numbers and increased air traffic, investment in the Middle East, the smart airport market is expected to reach US$ 850 million by 2020, mainly spearheaded by Gulf countries. Honeywell’s solutions are intended to improve levels of safety, security and efficiency, key components in driving smarter airports. “With regional governments continuing to make investments in airports to be smarter, safer and more secure, the requirement for advanced technology solutions are more of a priority than ever. Honeywell deploys technologies that leverage IoT to achieve greater efficiency across all airport operations, to safely accommodate growing passenger numbers and to promote safety and on-time performance,” remarked Sonja Strand, Vice President and General Manager, Honeywell Global Airports Business. At the Airport Show, Honeywell demonstrated innovative solutions to create smarter, safer operations across airports, by connecting data

from air traffic control, maintenance and aircraft, improving awareness and predictability throughout airports.

Airside The Honeywell NAVITAS software suite intelligently integrates air and ground traffic control with maintenance operations. Airports can then more easily accommodate growing air traffic while promoting safety and on-time performance. Honeywell NAVITAS includes modular and scalable software components, combined with an intuitive user-friendly interface, providing real-time insights for air traffic controllers and maintenance operators. Specific features of the Honeywell NAVITAS modules enable an increase in the productivity of air traffic controllers by enhancing situational awareness of airport surface operations. It gives controllers access to rich, real-time information on ground, air traffic and meteorological conditions. The system also enables engineers and technicians to manage maintenance by helping them to more effectively monitor system health, more easily perform fault diagnostics and to streamline workflows, which can also often reduce operational costs.

Terminal side Honeywell’s airport terminal management portfolio includes cutting-edge solutions for cyber secure, more efficient building operations within the airport terminal. Honeywell Command Wall, part of the Command and Control Suite, provides insight, agility and automation to better co-ordinate every aspect of complex airport facilities. Combing map-based control, incident workflow and enterprise dashboards, Command Wall allows a more collaborative and faster response to incidents across the terminal. Honeywell Digital Video Manager (DVM), which is a component of Honeywell Enterprise Buildings Integrator (EBI) building management system, offers smarter security and surveillance capabilities for complex building environments, such as airports. Honeywell EBI facilitates the integration of systems relating to security, comfort, life safety and energy control, among other functions. It gives users a single point of access and consistent view of information and resources that enhance a user’s ability to monitor, manage and protect an airport.


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COUNTRY FOCUS REPORT: SAUDI ARABIA

The Kingdom, powering on As the largest country, the biggest economy in the region, the most populated of the GCC and Levantine nations and the only Arab state to make it into the G-20 Forum, the Kingdom of Saudi Arabia is the ďŹ nancial engine and powerhouse of the Middle East. Clearly, given the volatility and resilience of the GCC and the wider region, the transportation and logistics industry in

26 MAY 2019

the Kingdom is at the crossroads of transformation. The socio-geo-political landscape in the Kingdom has also been given a thorough shakeup following Crown Prince Mohammad Bin Salman’s forceful foreign policy initiatives, an assertive and reformist agenda, and his signature Vision 2030. This bold, comprehensive outlook comprises far-reaching


COUNTRY FOCUS REPORT: SAUDI ARABIA

restructuring of the economic, religious, social and political systems in the Kingdom. Chandan Kumar Jha, Senior Consultant, Transportation and Logistics Practice, Frost & Sullivan and the author of this study examines the current transport and logistics landscape in the Kingdom of Saudi Arabia (KSA), including its value to the economy by analysing the growth trends and current barriers which exist in relation to industry practices—Editor

MAY 2019 27


COUNTRY FOCUS REPORT: SAUDI ARABIA

T

here is no doubt the Kingdom of Saudi Arabia (KSA) is a major player in the GCC and Middle East’s logistics and supply chain network. Under the leadership of the Crown Prince, HRH Mohammed Bin Salman, an ambitious programme has been set in motion that is expected to completely transform and diversify the economy of the Kingdom of Saudi Arabia, putting it in high gear and reducing its dependence on oil exports. Logistics and transportation is at the centre of this vision-strategy. While examining the key developments in transportation and storage segments (including government regulations and legislations), the focus is also on technology disruptions and innovative business models, which are impacting service delivery and growth within the industry.

Globally connected, locally invested – Creating economic opportunities The Kingdom’s GDP grew at 2.2% to US$ 782bn in 2018, buoyed by strong oil sector growth and recovery from a slowdown in

2017 when the economy was hurt by weak oil prices and austerity measures. As a major global trade hub, the country is attempting to accelerate its position in the global logistics market to support increased employment and to boost the economy through increased foreign investment. The country is determined to expand and develop its logistics infrastructure such as intermodal connectivity, logistics parks, and ports, which is expected to support the next phase of growth. The KSA has laid a clear future plan, Vision 2030 and National Transformation Programme 2020, in which it envisages decreasing its dependence on oil, increasing industrialisation, and becoming a logistics hub. The KSA logistics industry is likely to grow at a CAGR (compounded annual growth rate) of 4.1% between 2018 and 2024, driven by government initiatives in trade and industry promotion, development of economic cities, infrastructure expansion, and economic diversification. It is trying to unlock the ‘hard’ infrastructure with systems that can drive higher performance, including more rigorous

governance, leaner processes and a more efficient customs system. Through these initiatives, it plans to strengthen its position as a major trade hub and improve its global ranking on the Logistics Performance Index from the current 49 to 25 by 2030.

Transportation – From skyline to shoreline Competition among regional ports is intensive, as the GCC countries try to diversify their economies and leverage the rapidly growing sea trade to become transshipment hub connecting Asia with Africa and Europe. With the focus of attracting foreign investments, the KSA government is developing economic cities in proximity to sea ports / major consumption bases, which would bring manufacturing closer to these bases. Jeddah Islamic Seaport (emerging as a key port in the Red Sea) and King AbdulAziz Port handle more than 50% of the total imports; electronics, automotive, and food products remain the major products imported. Jeddah on the west coast is the main gateway for the KSA into the Red Sea.

Prince Mohammed bin Abdulaziz International Airport in Al Madinah, Saudi Arabia

28 MAY 2019


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OMAN LOGISTICS REPORT

Investments amounting to USD 70 million are being spent to expand the Red Sea Gateway Terminal (RSGT), which would allow shipping lines to deploy larger vessels. To promote the utilisation of the KSA as a shipping route for global third party logistics, a systematic evaluation of port fees should be conducted and fees should be adjusted where required, in line with international standards. Shipping and logistics activity relies heavily on road transport services. The market is heavily fragmented, with only a handful of large trucking companies providing solutions such as FTL (Full Truck Load) and LTL (Less than Truck Load) competing with leading regional and global logistics providers in the Middle East.

30 MAY 2019

Road freight volume in the KSA is expected to grow at 4.0% from 2018 to 2024 driven by the vast industrial base. Roads are an important link in transportation, as most of the last-mile deliveries are also dependent upon them.

Emergence of new economic cities Expansion of cold chain logistics services and development of economic cities are likely to increase air freight volumes in the Kingdom. Air freight is expected to grow at a CAGR of 2.0% from 2018 to 2024 driven by expansion and investments in the logistics sector. King Khalid International Airport, King

Abdul Aziz International Airport, and King Fahad Airport handled more than 90% of the imports by air cargo in 2018. As a result, imports by air cargo freight accounted for approx. 19% of the total imports in 2018. Further, the planned rail network will have connectivity with ports, major transport hubs, warehouses, freight terminals, and distribution centres, decreasing the transport times from coast to coast from 10 days through sea to 13-14 hours by rail. The current line transported 1.8 million passengers in 2018 and also transported 700,000 containers from Dammam Port to Riyadh’s Dry Port. By 2040, the rail network is expected to cover more than 10,000 km.


COUNTRY FOCUS REPORT: SAUDI ARABIA

King Khalid Airport, Riyadh, Saudi Arabia

Infrastructure spend on rail, metro, and bus projects in the KSA is expected to reach US$ 140bn over the next 10 years. Saudi Land Bridge Project, a 950 km line between Riyadh and Jeddah, and a second 115 km line between Dammam and Jubail are planned. When these projects are completed, the transit time for freight between Jeddah and Dammam is expected to be reduced to 13 hours, from 10 days, if transported through sea. However, the slow pace of implementation in recent years warrants upgraded track technologies, efficient control systems and resolution of problems responsible for fast deterioration of sensitive high-tech equipment

with a view to developing safe, reliable, rapid, efficient and sustainable railways.

Warehousing & Cold Chain – Better solutions, to Better Businesses The KSA is emerging as a Logistics hub and customers are demanding modern warehousing solutions at cheaper costs. The main issue is that most of the KSA’s warehouses are just seven or eight meters high with very few exceptions and the majority do not have a sufficient number of loading bays. New generation logistics facilities and fully integrated distribution centers are limited. Demand for new generation logistics

facilities (Build to Suit Type – an agreement to construct a purpose built facility) is expected to rise with the emergence of 3PL companies that handle stock distribution for companies with large and sophisticated supply chains. Along with warehousing services, Logistics Service Providers offer value-added services such as grading, packing, and container stuffing to stay competitive. The KSA accounts for approximately 35% of the cold chain logistics business in the GCC. Oneseventh of the total imports into the country comprise food and related products valued at around US$ 23bn. Riyadh is the most populous city, and a hot bed for warehousing, as most of the industrial

MAY 2019 31


cities are also located nearby. Demand for built-to-suit and automated warehouses are expected to open up opportunities. Changing demographics, growing consumer demand, and the strong impetus for domestic manufacturing and infrastructure are expected to boost the growth of the cold chain logistics industry in the KSA. New technologies such as sensors, robots, Internet of Things (IoT), cloud computing, and business intelligence & analytics are driving down the cost and driving up the speed of adoption of cold chain features in the logistics industry in the KSA. As part of an overall strategy to enable the third party logistics sector in the KSA, regulations around the ownership of land and warehousing should be reviewed by the Ministry of Economy and Planning to support foreign and domestic investors to provide end to end integrated logistical services.

Innovation and technology – An invitation to new Logistic possibilities Freight Transportation, Warehousing, and Freight Forwarding are some of the segments that are likely to undergo disruptive changes. Technological advances such as Autonomous Vehicles, Big Data, Cloud Computing, and Virtual Realty are likely to transform supply chain and logistics services besides providing new business models. The KSA is the largest market for trucks in the GCC. Automation in trucks would enable live tracking and hassle-free transportation reducing accidents, as well as solve the nation’s driver shortage problems. However, driverless vehicles and the use of drones for the delivery of parcel services may see slower adoption rates in the near future due to regulatory issues. The KSA is an important destination for ‘Trade Logistics’. Big Data and analytics would help in forecasting by identifying regular patterns through large data sets. Mobile devices and apps enable remote access to real-time information, eliminating the need for traditional IT infrastructure. The KSA’s Ministry of Communication and Technology has partnered with Blockchain specialists to make faster, safer, and secure transactions. Cloud computing enables remote access through multiple devices reducing the need for IT infrastructure; 32 MAY 2019

cloud-based online freight services are expected to play a key role in penetrating into both existing and new business segments. The KSA is reliant on other nations for most products, except oil. 3D printing technology, though, will revolutionise manufacturing processes and bring them closer to home, reducing reliance on finished products as well as costs.

As the country is emerging as a key hub for logistics in the GCC, service providers are adopting warehouse automation such as automated storage and retrieval system (ASRS), automated cranes, and robots to improve productivity. Companies would invest in installing solar power to cool cold chain storage facilities, which will eventually reduce operating costs.


COUNTRY FOCUS REPORT: SAUDI ARABIA

Night view of the city from the Al Faisaliah Tower, Riyadh, Saudi Arabia

technology, more than 75% of the total Saudi population would shop online by 2024. E-commerce logistics is emerging as a key segment within logistics services with more companies offering specialised last-mile delivery solutions. Last-mile delivery within short timelines and lower costs are still a challenge for most logistics players across the country. E-commerce players are in a continuous pursuit to get products out faster, challenges are growing to tighten capacity and cut costs. Let us consider a common scenario. Airlines are planned to depart on a particular schedule, and there are only so many that can leave a specific place at a specific time. With increasing number of businesses targeting to ship more goods out at an accelerated rate, finding adequate space for them can be difficult especially during peak seasons. Also, the entire supply chain needs to be synchronised to reduce leakages and achieve operational efficiency, which is often challenging in a multimodal network.

Customs & Regulations –

NDP and NDU Telematics, vehicle-to-vehicle communications, and tracking have a strong influence on delivery and service offerings. National Development Plan (NDP) and National Digitisation Unit (NDU) are expected to play a major role in the country’s transformation into a knowledgebased economy.

A combination of national initiatives and advances in digital technologies such as automation, robotics, wearable, autonomous vehicles, and Big Data analytics are likely to accelerate the adoption of digital technologies by LSPs (logistics services providers). Driven by a young population, high disposable incomes, and easier access to

Enablement through Protection Customs is evolving to keep abreast of the global standards. Changes in economic climate, trade agreements and government regulations, require import/export businesses to stay on top of new rules being put in place and consequent increase in import duties. The government has been proactive in dealing with these continuous changes in Saudi Customs; a new platform is being developed to ease the climate by providing shippers with better visibility and preclearance, letting them map out their estimated costs and shipment requirements. Import of goods into the KSA is reserved for licensed Saudi individuals and Saudiowned entities. However, Saudi companies with foreign participation and a license from Saudi Arabian General Investment Authority (SAGIA) may import products and materials necessary to perform the activities authorised by their license. Saudi Food & Drug Association (SFDA) is the sole governing body that sets regulations and standards for food and associated products imported into the country. Most of the laws are on par with the EU and American FDA regulations.

MAY 2019 33


COUNTRY FOCUS REPORT: SAUDI ARABIA

Halal hold However, companies operating in the logistics of food and associated products sectors should abide by the halal regulations during transport and storage. Cool Chain Association has developed a Cool Chain Quality Indicator (CCQI), a quality management system for companies serving perishable and temperature-sensitive products. This would help retailers and brand owners to identify their right supply chain partners and as well improve the quality in the cold chain. VAT is expected to be one of the largest revenue sources for the Kingdom, while the Expat Levy should lead to an increase in the number of Saudi nationals working in the private sector. Licenses for road transport providers and warehouse operators are under review, in an effort to improve efficiency and safety standards.

34 MAY 2019

Planned economic cities are being developed to grow the nation’s economy, boost competitiveness and increase the standard of living for residents. The new economic cities are expected to contribute to 20% of its GDP by 2020 and aid in regional diversification by reducing the stress on existing cities such as Riyadh and the oil-rich Eastern Province, which currently account for about 65% of the population and 75% of the business. 100% foreign land ownership is allowed in the economic cities and the profits can be transferred abroad; however, tax and zakat regulations apply. The KSA is aiming to achieve 75% Saudisation in the private sector by 2020, and the government has mandated companies to recruit, train, and develop Saudi nationals. The transportation and logistics sector is thus developing into

a large and dynamic industry, strongly supported by state led investment in rail, maritime, road, logistics and airport infrastructure. The government’s 2018 budget includes an 86% increase in planned government expenditure on infrastructure and transportation, increasing from US$ 7.7bn to US$ 14.4bn. Public-private partnerships (PPP) are being pursued to fund several key schemes, while a number of the country’s publicly operated transportation facilities are being prepared for full privatisation. The country is right at the crossroads of developing into a unique regional logistical hub; close economic ties with the Gulf Cooperation Council and other Arab countries, as well as constructive relations with Islamic and foreign countries will enable it to achieve this vision.


Integrated Integrated Liquid Logistics Liquid Logistics Solutions Solutions ProviderProvid

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Indicators point to exponential growth for regional E-Commerce There is tremendous scope for E-commerce in the region where prospects remain good, business relatively untapped and where the promise of growth and the harnessing of potential remains high for key industry players and stakeholders

T

he rapid takeoff and proliferation of e-commerce is now a global phenomenon which is also steadily impacting the Middle East. This retail revolution is transforming customer behaviour and business models in the region. The E-commerce sector in this geography is robust with tremendous scope for growth The power-packed and energy-laden two-day (24 and 25 April 2019) conference themed ‘Shaping the Future of e-tail’ and organized by Infinity Global Conferences was held at the Address Downtown Dubai with an impressive speaker panel from leading companies including SAP, Bosch, Godrej Storage Solutions, Be Code, Adapty and PTV Group, among many others. With an remarkable lineup of 60 speakers, 250 delegates, eight sponsors and nine exhibitors the event was an ideal platform for learning from successful case studies, networking with industry peers, garnering

36 MAY 2019

feedback from existing and potential customers and most importantly transacting business. The speaker panel put a spotlight on growth in the region by on-boarding new customers, expansion of product offerings, optimised delivery standards, better retention and customer service standards. The sector despite a conducive policy framework and plenty of investments is yet facing growth challenges that can be attributed in part to prevalent economic conditions and the fact the industry in the region is still in its infancy and needs to develop infrastructure and systems.

Scope for growth Currently, only 15% of businesses in the Middle East have an online presence and almost 90% of the online purchases in the region are shipped from abroad, according to technology research company Gartner. This trend is expected to reverse soon with


E-COMM MENA 2019

Star lineup

the launch of Noon.com, a large regional e-commerce player, the entry of major international players, such as Amazon (through the acquisition of Souq.com), and by increasing technology adoption. According to Forbes Middle East and Marmora MENA Intelligence, online sales in the Middle East are estimated to account for only 2% of the overall retail sales, much lower than the 15% in developed markets:

the untapped potential for e-commerce players is huge. The welcome remarks were delivered by Conference Convener Sandeep Chatterjeee, Senior Manager, Deloitte India, and the opening keynote ‘Building a Global Ecommerce Business in UAE’ was outlined by Bader Almusharrekh, Trade Policies and International Organisation Department, UAE Ministry of Economy.

The first of the series of panel discussions centred on the subject of ‘Global Expansion – marketplace Opportunity and Cross-Border Trade’. The eminent panelists included Omar Yaghmour, Co-Founder & COO, Fetchr; Dennis Lister, VP Cargo Commercial Development, Emirates SkyCargo; Ben Mclean, Head, Key Accounts Sales & E-Commerce, DHL Express UAE; Hisham Albahar, Group CEO, Posta Plus and Selahaddin Burak Omeroglu, Vice President, Cargo Sales (Middle East and South Asia), Turkish Cargo. Another panel discussion focused on ‘Selling in Marketplaces: How marketplaces have changed the face of retail and how to leverage this opportunity’. Participants included Ulugbek Yuldashev, Founder and CEO, AWOK.com; Mohamad Dennawi, Head E-Commerce, Market place operations; Ibrahim Farah, Project Manager and Digital Product Manager, Xpertin; Oliver White, Head Ecommerce, Sephora Middle East. Yet another panel discussion zeroed in on the subject of ‘Desktop to Handheld: Consumer driven changes to the E-commerce sector’. It put the spotlight squarely on a wide range of innovative technologies that are redefining and reshaping the multi-channel shopping experience; the ‘Internet Of Things’ and ‘The connected store – An essential part of a multichannel strategy’; recreating the personalised experience of shopping in-store and online with VR and AR and making smarter merchandising decisions and delivering personalised experiences with Artificial Intelligence. Partakers comprised Sameer Bagul, EVP & Managing Director, Cleartrip Middle East; Julia Jackle, CEO and Co-Owner, Creative971; Kevin Alderweireldt, Founder, Cousteau Studio Caviar Collective; Naveed Ahmed Pirzada, Chief Strategy Officer, Mall. Global; Mohammed Mousa Ali, Director, Digital Business, Emirates Post Group; Faten Elazhary, Head Customer Support, Majid AlFuttaim Holding and Sudipt Shah, Founder and CEO, Digital of Things. Dubai-based Infinity Global Conferences DMCC is a specialised business media company that creates well researched, trade need based platforms where various industry stakeholders come together to meet, interact, exchange ideas.

MAY 2019 37


Saudi Arabia’s top Arabian Gulf port in major diversification and modernisation drive Saudi Ports Authority (Mawani) operates the port using a multi-pronged approach which not only makes it an integrated marine and maritime centre but a comprehensive onestop shop for all Saudi maritime services as well

D

ammam’s King Abdulaziz Port, the largest Saudi Arabian port on the Arabian Gulf coastline and reportedly the second busiest in the Kingdom after Jeddah Islamic Port. It is also among the oldest in the region and traces its origins to over four decades ago. This comprehensive port is now pioneering major industrial and economic developments following a modernisation and diversification drive. It has now expanded from a small berth capable of accommodating only two ships and connected to a 13-kilometre monorail off the coast of Dammam in the Kingdom’s oil rich Eastern province to a huge complex of ports, shipyards and warehouses. It is also a base for an integrated infrastructure of factories and facilities for various maritime and marine activities, just one kilometre from the heart of Dammam.

Eng. Walid Faris Al Faris, Director General, King Abdulaziz Port

38 MAY 2019


KING ABDULAZIZ PORT-DAMMAM

“Operations at King Abdulaziz Port commenced over forty years ago mainly to serve the oil and gas industry, which flourishes in the Eastern Province. However, the Kingdom’s leadership had a vision to make it a comprehensive centre for the maritime industry and we have attained this,” commented Eng. Walid Faris Al Faris, Director General, King Abdulaziz Port. The port has seen regular expansions and today, it covers approximately 190sqkm and is connected to the heart of Dammam, just a kilometre away. The port is the integrated commercial window that connects the Kingdom to the world and its location on the Arabian Gulf makes it ideal for exporting goods to neighbouring markets in Asia and the Indian Subcontinent. Additionally, the port’s central position on the Arabian Gulf coastline makes it a preferred destination for international

shipping lines carrying goods to the Kingdom; the biggest market in the GCC.

360-degree comprehensive strategy Talking about the integrated capabilities of King Abdulaziz Port, Al Faris explained that the port can handle any type of cargo with its unique capabilities. It has four terminals operated by the best port management and operation companies. These include two container terminals; the first, operated by the International Port Services Company, has a capacity of 2.5mn containers TEUs and a 16m deep with 10 berths totalling 2,160m in length. It is equipped with 17 bridge cranes, five of them are fully operated remotely. The second terminal, operated by the Saudi Global Ports Company (Mawani), and has a capacity of 1.5mn containers TEUs, with two berths totalling 700m in length and a 16.5m

deep. It is equipped with 6 bridge cranes and has an additional 600,000sqm area. The terminals are supported by a large number of mobile stackers and container cranes. The port also has a general and bulk cargo terminal in the eastern part, operated by Globe Marine Services Company. It includes 9 berths totalling 1,740m in length and 12 to 14m deep. It features 56,000sqm covered warehouses and 342,000sqm open storage areas. The central cargo terminal, operated by United Technical Co., Ltd, includes 13 berths with length 2,465m and 9 to 14m deep, 44,800sqm covered warehouses, and 372,000sqm open storage areas. Both terminals have adequate cargo handling equipment. Therefore, the port is an ideal destination for huge vessels that can dock on the port’s various deep berths. Waiting time for ships to unload is minimal owing to the quality infrastructure, modern

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KING ABDULAZIZ PORT-DAMMAM

handling equipment and the ability to store bulk and general cargo in covered warehouses to protect them from weather and damage. In addition to the four main terminals, the port has a terminal with 33,600sqm dimension for black cement and clinker export, and has a capacity storage silos around 30,000 tonne for black cement and a 40,000 tonnes for clinker. The terminal has a conveyor belt to directly transfer cement from the two silos to the ships. It can handle 800 tonnes of black cement and 700 tonnes of clinker per hour. Moreover, the port includes a 16,000sqm white cement terminal and two storage silos with a capacity of 8,000 tonnes. The port also has a 60,000sqm.terminal for handling iron ore, with a capacity of 3mn tonnes per year, and two gantry unloading equipment, each with a capacity of 800 tonnes per hour. The port also has a 113,000sqm grain and fodder terminal

warehouses, six of them are air-conditioned. The port also has an inspection warehouse and two container-unloading warehouses. Saudi factories rely heavily on the port’s capabilities to export its products to international markets. The port is indeed a key partner in supporting alternative economy sectors. What makes the port ideal in its operations is its connection to a network of modern highways linking it to all cities of the Eastern Province. As well as, it is also linked by the railway that connects directly to the Dry Port in Riyadh, the economic and industrial heart of Saudi Arabia. King Abdulaziz Port is the preferred choice for factories and companies in cross-border trade which contributes to building the kingdom’s economy as one of the world’s top economies. The Saudi Ports Authority is committed to

repair complex, managed and operated by Zamil Offshore Services Company. Seventy vessels were built in this shipyard and over 360 marine pieces of different sizes and types were repaired or maintained, including huge offshore rigs. Thus, the port is a comprehensive one-stop shop for ships where they can confidently set off to anywhere in the world assured of the proficient services they received. In addition to the port’s capabilities in ship building and repairing, as well as floating docks, it features a 500,000sqm area for manufacturing and assembling of offshore platforms and oil drilling rigs, managed and operated by Saipem Taqa Al Rushaid Fabricators (STAR). This area specialises in manufacturing and assembling of offshore rigs and industrial equipment that support the oil and gas sectors. A total of 72 offshore rigs have been built there for Saudi Aramco and neighbouring countries. The area also houses specialised welding and paint workshops. The port provides office spaces for logistics and maritime and ship management companies. The facilities are equipped with high-speed internet service and provide easy access to electricity and water services that meet the needs of companies, including those with major industrial facilities.

Putting People First with storage silos and warehouses with modern equipment capable of handling grains. The port’s diversification strategy aims at enhancing its capabilities to deal with various types of cargo, including grains, oils, foodstuffs, Ro-Ro goods such as cars, vehicles, and other types of containers, is key to its competitiveness. The port further promotes this position by providing services to ships such as fuelling, food and other supply services.

Ideal environment for import, export and docking Talking about the port’s import and export capabilities and supporting an alternative economy, Al Faris explained that King Abdulaziz Port has advanced infrastructure that helps the Saudi industrial and commercial sectors do business easily. The port has 351,000sqm of storage and reexports area including 22 thermal-insulated

40 MAY 2019

streamlining cargo handling procedures. It takes just 24 hours to clear a container, making the port a hub for the world’s biggest logistics companies. Ship operators at King Abdul Aziz Port also like the seamless procedures for landing of their seafarers and crews, and the ability to visit the city and enjoy its leisure facilities and tourist attractions.

Incubator for the Saudi maritime industry King Abdulaziz Port is not just cranes and quays for loading and unloading. The port includes some of the best marine manufacturing facilities in the Arabian Gulf region. The port houses King Fahd complex for repairing ships, operated by Al Balaghah Holding Group. It consists of two floating docks for repairing ships and offshore rigs over an area of 147,000 square metres. It also houses a marine construction and

According to Engr. Al Faris, the Kingdom should take the lead in the logistics sector in line with the HRH Mohammed Bin Salman Al Saud, the Saudi Arabian Crown Prince’s grand, ambitious ‘Vision 2030’. To ensure its success, qualified Saudi professionals capable of managing and operating all the port’s facilities will need to take over its functions. To this end the Kingdom has established a maritime training academy at the port and has contracted one of the world’s leading marine-training organisations to oversee the operations. “We are now preparing to graduate over 90 marine supervisors. We also train port personnel on operating cranes, facility management and handling the advanced smart infrastructure that makes the port a model for quality and operations,”added Al Faris. “We are proud that we have zero pollution cases in the port thanks to the efficiency of the team and the experience and expertise of the port’s staff,”he concluded.


NEW QUESTER MEENA LAUNCH

UD Trucks recently unveiled, in Bahrain, its New Quester model in the Middle East, East and North Africa (MEENA) region with a radical makeover of the brand’s well-established heavyduty truck with a range of enhancements

UD Trucks’

New Quester to chart new growth trajectory for the logistics industry in the MEENA Region

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D Trucks’ New Quester has been designed with a mission to provide increased operational cost-efficiencies for the logistics-supply chain and transportation industry in the MEENA region as globally and to extend uptime and provide fleet customers with a higher return on investment. The news set of improvements will enable logistics companies across the region to tackle critical industry challenges and boost their bottom line through Smart Logistics. Fuel efficiency, productivity, connectivity, and supporting and developing drivers are top priorities for fleets and transport companies in the MEENA region and New Quester has addressed these challenges with new features such as ESCOT (Easy Safe Controlled Transmission) and UD Telematics.

Going the extra mile UD Trucks recently rolled out the New Quester at an elaborate launch ceremony in the Kingdom of Bahrain. To be introduced in fast-growing regions around the world, the launch of New Quester highlighted UD Trucks’ unwavering commitment to “Going the Extra Mile”for customers’ businesses. Building on proven robustness and reliability, New

MAY 2019 41


NEW QUESTER MEENA LAUNCH

we call our Gemba spirit,”explained Mourad Hedna, President of UD Trucks MEENA on the occasion. “We are humbled by the tremendous confidence and recognition that the Quester line has earned. With New Quester, we are looking forward to carrying on this legacy of being the truck brand that our customers want to partner with,”he continued.

Increased fuel efficiency

Quester introduces key features such as ESCOT automated manual transmission, engines with higher horsepower and userfriendly telematics to deliver greater fuel efficiency, productivity, driver efficiency, safety and uptime. “The truck industry in the region is changing rapidly and customers are increasingly conscious of the total cost of ownership. With New Quester we have the ideal product to address these needs. Moreover, New Quester combines the best of three worlds: UD Trucks’ strong Japanese heritage and craftsmanship; Volvo Group’s innovative technology; and our strong local support for our valued customers, which

42 MAY 2019

From left: Jacques Michel, Mourad Hedna, Toshi Odawara and Toshio Shiratori

The New Quester aims to boost productivity and profitability for business owners and logistics companies, for whom a rise in fuel costs consequently increases operating costs. New Quester delivers enhanced fuel efficiency of up to 10% over the current Quester. “This is aided by the ESCOT automated manual transmission, lighter tare weight and optimised driveline, and is also affected by the operating conditions, driving behavior and vehicle maintenance. It effectively enables businesses to better manage fuel costs and mitigate oil price volatility,”observed Jacques Michel – President, Volvo Group Trucks Asia & Joint Ventures (JVs) Sales


NEW QUESTER MEENA LAUNCH

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NEW QUESTER MEENA LAUNCH

ESCOT includes software which optimises gear shifting according to the engine revs, vehicle speed, loading weight and even road gradient. The smart system also includes a sensor that will select the optimum gear automatically instead of assuming a first gear selection. New Quester’s enhanced fuel performance also aligns with the increasing global focus on curbing fuel consumption and meeting environmentally-friendly regulations in relation to emissions quality standards, all of which effectively reduces the new model’s overall carbon footprint, the company further indicated.

Introducing a more comfortable working environment New Quester introduces more driver-friendly features to make the driving experience more seamless and comfortable. A game changer in the transportation business, New Quester with ESCOT automatically selects the optimal gear at the right time based on the operating condition. This takes away the need for manual gear shifting which, depending on the transportation operations, happens 1,000 to 1,500 times a day. ESCOT’s automated gear

44 MAY 2019

selection also enables drivers to easily adapt to operating New Quester and better focus on driving with ease. “In addition to making driving simple, New Quester also aims to help businesses expand the pool of driving talent with an easy-to-operate gear lever that uses a straight shifting pattern. In certain target markets, for example, the number of female Quester drivers is increasing due to its drivability,” remarked Toshio Shiratori, Design Director, UD Trucks Technology, UD Trucks, Japan, one of the company’s senior officials present at the launch ceremony. He mentioned that the New Quester opens the doors for companies to attract even more prospects to pursue truck driving as a career and diversify the pool of talent for this role. He added that these additional innovations and conveniences are key to supporting transport companies with developing their pool of drivers thereby ensuring optimum performances. New Quester increases overall drivability and safety for drivers with features that focus on increasing drivers’ comfort levels and reducing driver fatigue. Driver fatigue continues to be a serious industry challenge, contributing to up to 20%

of road accidents in the world. To address this, New Quester is developed with an air suspended cab and ride comfort package which reduces cab vibrations by up to 18%. Driver comfort is also enhanced by the ergonomic seats and lumbar support for long-distance assignments.

Boosting profitability and business growth In line with elevating business success through Smart Logistics, New Quester supports effective fleet management and driver performance with innovative customer telematics such as real-time vehicle tracking and geo-fencing for better fleet visibility and optimisation. Such smart connectivity features support the increasing trend of new logistics delivery solutions that are offered by technology and local start-up companies in, for example, the Middle East. “New Quester trucks are equipped with UD Telematics, which make it possible to connect directly to UD Trucks workshops to monitor and detect each vehicle’s condition and service needs before a potential emergency occurs,”affirmed Toshi Odawara, Vice President, Quester Product Line Management. “Preventive maintenance analysis guides customers via monthly driving behavior and fuel consumption reports, ensuring higher uptime and optimised fuel economy over time. All these measures have been undertaken for doing more with less to overcome productivity constraints and streamline fleet management processes,”he further asserted. Owners of the New Quester also enjoy increased uptime, with the clutch life span being two to three times longer when equipped with an ESCOT automated manual transmission as compared to a manual clutch, depending on operating conditions, driving behavior and vehicle maintenance, the manufacturer stated. “At UD Trucks, the company’s Gemba spirit means being close to our customers, and listening to their needs in order to be their most valuable partner in their respective markets and segments,”concluded Hedna.


Subscribe today May 2019 Issue 59

April 2019 Issue 58

March 2019 Issue 57

ENHANCING THE BUSINESS OF LOGISTICS

KINGDOM

ENHANCING THE BUSINESS OF LOGISTICS

ENHANCING THE BUSINESS OF LOGISTICS

CALIBRATIONS THE LOGISTICS INDUSTRY ON A ROLL IN SAUDI ARABIA

TRISTAR RISING

RAIL REVISITED Keeping Track:

“A business exists for a lofty purpose not just profit,”

GCC Rail Projects Gaining Traction

Sultanate of Oman Country Report Investing in Infrastructure

DP World

Breaking new ground in BreakBulk

– Eugene Mayne, CEO Tristar Group

SSI Schaefer

Turkish Cargo

•GSC_APRIL_2019_Cover.indd 1

4/9/19 7:45

Dubai South

Emirates Steel

Strengthened Performance

New Lifeline

•GSC_March_2019_Cover.indd 1

King Abdulaziz Port

Bracing for EXPO 2020

Sanofi Logistics & Distribution Centre

Intelligent Logistics Solutions and Technologies

Relocating to its new hub in Istanbul

3/7/19 6:18

UD Trucks

Major Maritime Moves

Unfurls the New Quester

•GSC_May_2019_Cover.indd 1

5/7/19 21:27

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RENAULT TRUCKS

Renault Trucks debuts its newest truck models in Egypt

Triangle Heavy Equipment, the sole distributor of world’s finest heavy equipment brands in Egypt, recently announced its partnership with Renault Trucks by launching the latest range of models of heavy-duty trucks to meet the growing demands of the booming construction and infrastructure development projects across the country

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he newly launched versatile Renault 2019 truck models include D, C and K ranges; globally renowned for being sturdy and reliable, with low fuel consumption that result into delivering greater productivity and control operating costs. The trucks are equipped with the latest features, delivering a reliable experience to its users, including drivability, comfort and durability. “Our partnership with Renault Trucks comes in line with the expansion of the transport network in Egypt and following up with the infrastructure development goals according to vision 2030. Such valuable partnership will result in more efficient heavyduty transportation process, for an increasingly demanding and aggressive construction and development timeline for the country,” remarked Amr Eltawil, CEO, Triangle Group. Renault Trucks is part of the Volvo Group, one of the world’s leading manufacturers of trucks, buses, construction equipment, marine and industrial engines. Renault Trucks supplies the global transport industry with a wide range of vehicles adapted to local and regional distribution, construction and long-distance activities.

46 MAY 2019

“The heavy duty capabilities of Renault Trucks are built to meet the needs of the fast-paced construction projects Egypt is witnessing today, and with the rising fuel costs, we’re proud to say that the D Range in particular, has proven to reduce fuel consumption by up to seven percent,”noted Gregoire Blaise, President, Renault Trucks Greater Middle East.

D Range Trucks (Distribution) The Gross Vehicle Weight for these trucks ranges from 13 to 18 tons, and power ratings 190 to 280 hp. Comes out of two engines ‘5L & 7L’. Only rigid trucks are available with 4x2 and 4x4 configurations. Now 6-speed or 9-speed gearboxes are available to match the customer’s application. C shape chassis frame (260 mm height) and wheel bases from 3.5 m to 6.8 m will for sure accommodate any size of refrigerated boxes, car carriers, and other add-on options. With its Cab width of 2.1 m; the D range will easily maneuver in the city as easy as passenger car and carry up to 13 Ton goods. High ground clearance but low cab access to enhance driver comfort.


RENAULT TRUCKS

K Range Trucks (Heavy Haulage,

C Range Trucks (Long Haul and Construction) Gross Vehicle Weight starts from 18 to 100 tons, and driven by a range of three engines ‘7L, 11L & 13L’ rated 280 to 500 horsepower coupled to the most advanced automated 12 speeds gearbox OPTI-DRIVER. Rigid and Tractor Head are available with configurations (4x2, 6x2, 6x4, 8x4). C Shape frame (300 x 90 x 8 mm & different length reinforcements 277 x 80 x 5 mm) is carried on Mechanical Suspension or Air suspension.

The specially designed Cab (2.3 m wide on light range and 2.5 m wide on heavy range) offers comfort on board. The robust front end is one of the iconic features; bumper with steel corners or full steel bumper. A standard safety measures such as Electric Parking Brake ‘EPB’activates automatically when the engine stops, Automatic activation of headlamps and windscreen wipers, Bend assist lights. Additional safety on road can be provided with the Tire Pressure Monitoring System‘TPMS’, and the Advanced Emergency Braking System‘AEBS’.

Heavy Construction and Mining) Gross Vehicle Weight starts from 21 to 120 tons (160 Ton under certain conditions). The available engines 11L and 13L are rated 330 to 500 horsepower coupled to the most advanced automated 12 speeds (and additional two crawlers) gearbox OPTI-DRIVER (Opti-Driver Xtended). This gearbox has two software programmes in one; on road (smooth shifting to maximize the fuel efficiency) and off-road mode (to utilize the maximum engine power by shifting gears in 1 by 1). Rigid & Tractor Head available with configurations (4x2, 4x4, 6x4, 6x6, 8x4 & 8x6, 8x8). Nine-ton front suspension with straight axle beam as standard and Xtreme rear suspension up to 38 Tons is available if required. Full steel front bumper allows up to 32 degrees front approach angle and maximize the ground clearance to 395 mm. A standard safety measures such as Electric Parking Brake ‘EPB’ activates automatically when the engine stops, Automatic activation of headlamps and windscreen wipers, Bend assist lights.You can support the uptime and productivity on road when you add the Tire Pressure Monitoring System ‘TPMS’.

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TRANSPORTATION THOUGHT LEADERSHIP

Debunking five pet transportation myths that hurt your business Factor such as the changing economic scenario, globalisation of markets, the increasing pressure by demanding customers for streamlines, cost-effective transportation, is upping the ante for haulage services providers in an increasingly competitive segment. Competition in the transport sector has increased exponentially and this has further enhanced the need for timely and cost-effective deliveries. Keeping this perspective in mind, Gautam Kumar, Co-Founder and Chief Operating Officer, FarEye, explains in this editorial contribution, seamless transport management conundrum is complex and a few key myths need to be addressed and dispelled

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he days are long past when managing transportation was perceived as an afterthought. Thanks to uncompromising customer expectations, this arm of a supply chain and logistics is now as important as planning procurement, managing inventory, and optimising warehousing. However, seamless management of transportation is easier said than done. To begin with let’s clear the cloud that has been obscuring some important facts about transportation for quite some time now.

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Common myths like transportation will continue to be a cost centre, it does not directly impact customer retention, the sector will remain unorganised, transportation management system (TMS) solutions are more than enough to optimise operations and that it’s difficult to track delivery fleet in remote locations should be put to rest once and for all.

and capacity management, eliminating chances of theft, increasing driver productivity, guarantee ROI and ensuring accurate ETAs (expected times of arrival), modern cloud-based logistics platforms can significantly reduce the cost incurred on executing transportation activities and drastically boost profitability.

Myth 1: Transportation and logistics will always remain a cost centre

Myth 2: Transportation has little to do with customer retention

Yes, only if you want it to be. By increasing visibility of delivery fleet, optimising routes

Not true. Unless your customer is absolutely devoid of any sense of urgency, it’s not a


TRANSPORTATION THOUGHT LEADERSHIP

smart idea to strike off the equation that says ‘good transportation equals greater customer retention and loyalty.’ Imagine this: Your business supplies heavy equipment to telecom companies responsible for setting up towers in remote locations. You have sent out a giant truck to deliver antennas and fiber cables to a remote location some 600 miles from your manufacturing unit. According to plan, it should reach the destination within two days. The telecom company has already assigned a team

of engineers that will reach the remote destination on the day the antennas and cables arrive. Alas surprise, surprise! Your delivery truck reaches the locations a day late. A day late, right? That’s just 24 hours just to trivialise the period. What could possibly matter? The downside is the fact that the entire engineering team’s man-hours for a day were squandered. The next set of engineers who were supposed to take over the task from the initial team is now on its way only to wait for another day. So, as the hours keep adding up, the

estimated time to make the tower up and running goes way beyond the budgeted time. And for your telecom customer, this ripple effect can result in losses adding up to millions of dollars. So, if the average waiting time of a site engineer is two to three business days (say 24hrs), then the money value of the engineer’s time wasted will be $600 per site (24 hours@$25). Question is, how long will the customer invest in your services if this keeps happening? Not a tough question to answer.

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TRANSPORTATION THOUGHT LEADERSHIP

Hence, investing in technologies that enhance logistics operations and ensures greater control over long haul deliveries is absolutely imperative.

Myth 3: The transportation industry will remain unorganised, so nothing can be done In fact, a lot can be done about it. It’s true that the transportation industry, especially in developing countries, is fragmented. The involvement of multiple stakeholders, belonging to very different economic and social backgrounds, does make the transportation industry a black box. There is hope in sight – this problem can definitely be solved by leveraging advanced technologies. Advanced supply chain and logistics platforms can create a transparent environment where consignors, 3PLs, truckers, and consignees can seamlessly collaborate and share live updates to ensure all stakeholders are abreast with what’s happening on the ground. So, think of a situation where you, as a raw material supplier, no longer need to burn man-hours on receiving hundreds of calls every hour from customers asking where their shipments are and when it’s going to arrive. Pure bliss right?

Myth 4: Traditional Transport Management Systems is enough to optimise logistics processes Your existing TMS has been very useful till now and the system has served you well. Nevertheless, what got you here will not get you there. Traditional TMS solutions have

50 MAY 2019

limitations when it comes to making your logistics proactive. A mundane problem that your business might be facing is intimating your customers with appropriate ETAs or arrival time of your shipments. We will not be surprised to know if you frequently deal with situations where your customers are disappointed owing to your inability to deliver on time. It’s something like ordering food for breakfast but receiving it at lunch. Obviously, you will eat it as you have paid for it, but still, you will feel cheated. Having said that, you would not have felt let down if you were informed that delivery of your order will be delayed owing to heavy traffic congestion. It is even better if you could have live-tracked the person bringing your order. Modern transportation platforms use control towers that let customers track their shipments on a single pane of glass in real-time and empower businesses to generate accurate ETAs.

Myth 5: It’s difficult to trace the whereabouts of my trucks when they travel through remote areas Yes, that was the case about ten years ago. The very prospect of losing sight of a truck that’s transporting thousands of dollars worth of goods is scary. That however is not the case anymore. Advanced IoT-powered logistics solutions can empower businesses to track delivery fleet even in areas where there is poor connectivity by leveraging the advancements in GPS technology. On the other hand, there is more to this than just gaining visibility of the delivery fleet in remote locations.

Gautam Kumar, COO and CoFounder, FarEye

Known for his problemsolving abilities and creating customer-centric solutions, Gautam Kumar is responsible for handling the diverse business operations and partnerships at FarEye, a company he co-founded in 2013 with Kushal Nahata and Gaurav Srivastava. FarEye developed the award winning eponymously named platform that is enabling digital logistics of enterprises across the globe, FarEye commenced its corporate breakthrough by developing a sensor based automation system that assisted physically challenged people and juggled with GPS tracking systems. FarEye has also successfully digitalised last mile deliveries for several large business corporations.

Imagine your truck suddenly coming to a halt while crossing a location that has previously witnessed incidents of theft. Obviously, the lack of handy information during planning the route had you oblivious about this fact. Now when you can see the truck being idle for more than it should, all you can do is resort to prayers. Modern logistics platforms not only help businesses gain greater visibility of the delivery fleet but also eliminate chances of theft and pilferage by analysing historical data of routes. In technical terms, such platforms can ensure businesses predictive visibility. While there are many such myths that surround the transportation industry, these are the ones that can really stall your business from making progress. We hope now you will have a different perspective while planning your transportation activities.


VOLVO TRUCKS DRIVER CHALLENGE

Winners announced forUAE Volvo Trucks Driver Challenge 2019 The three-day Volvo Trucks Driver Challenge 2019, which this year involved more challenges than ever before, attracted professional drivers from 55 companies. The overall winner of the competition was Tawhed Ali from Trojan based in Abu Dhabi, UAE

The UAE Volvo Trucks Driver Challenge Facts

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he third annual edition of the competition focused on three key areas – safety, fuel efficiency and productivity. The aim of the Volvo Trucks Driver Challenge is to draw attention to the important work done by truck drivers. It is also a way of attracting more trucks drivers in the constantly growing industries of transportation, constructions and logistics.

FAMCO Volvo Trucks Driver Challenge

“The Volvo Trucks Driver Challenge 2019 in the UAE brings together all the different challenges that truck drivers face every day. Their skills are often the critical factor in the safety, fuel efficiency and productivity of our customers,”said Vladimir Knezevic, Managing Director, FAMCO UAE “It’s important that we understand how we can get most out from Volvo Trucks; our transport solution simply will not work without the valuable insights we get from professional drivers around productivity and fuel efficiency,”remarked Fredrik Samuelson, Managing Director, Volvo Trucks Middle East. “Winning the UAE 2019 Volvo Trucks Driver Challenge is a big achievement for us! The final was tough and we were up against many experienced drivers,”said Tawhid Ali from Trojan.

FAMCO Volvo Trucks Driver Challenge Winner Tawhed Ali

• The competition has been held every year since 2017 • The prequalification rounds were organised at FAMCO DIP 2, Dubai, UAE during the third week of April 2019. • This year’s competition involved more than 55 drivers out of which 12 qualified to take part in the UAE final • The competition aims to put the driver in focus and reinforce the importance of skilled and competent drivers • The focus areas of the competition are safety, fuel efficiency and productivity

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52 MAY 2019


PORT OF DUQM ROUNDUP

Port of Duqm emerging as the most preferred maritime hub in the gulf region Oman’s newest port continues its winning ways with series of success stories

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he strategically located Port of Duqm is taking shape in its rapidly-developing hinterland with the services offered at its early operation multi-purpose terminal for break bulk, heavy-lift cargo for mega projects, dry bulk, container and RoRo.

An Authority providing anchorage at the Port The Port of Duqm is a haven for ships berthing off the coast whilst waiting for their turn to discharge of cargo. The port offers facilities for freighters to lower anchor and then unload cargo using specially skilled resources particularly for over-dimensional and odd-sized cargo. One of the biggest semi-submersible vessels with a capacity of 98,000 DWT recently arrived at the Port of Duqm to perform a heavylift discharge operation of two massive rigs transported on board. The weight of each rig was an astounding 45,000 MT DWT. This successful anchorage at the Port of Duqm Company (PDC) is a stand out for its abilities and capabilities to manage such specialized heavy-lift cargo. With many big-ticket and massive infrastructure and development projects in construction, energy and utilities ongoing in the Sultanate of Oman, PDC foresees many more such heavy-lift operations for similar rigs which will position Port of Duqm amongst one of the most preferred ports across the globe performing such massive operation.

Bunkering Services The bunkering service agreement with Oman Oil Marketing and Shell Oman enable the bunkering terminal to provide different grades of quality fuels and lubricants as well as other ancillary facilities to marine liners calling at Port of Duqm. With new global bunker regulations coming into effect as from 2020, the Port of Duqm has a clear ambition to become a future bunker hub serving in the entire region. This vision is boosted by its advantageous and convenient location as well as the availability of the right fuel specs and ability to offer prime bunker services.

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PORT OF DUQM ROUNDUP

Given its close closeness to the major oil & gas and mining projects in Oman, the Port of Duqm is seeking to radically increase its activity levels in the foreseeable future. The Port of Duqm is committed to provide an extensive support and service to Shell Oman’s downstream business operation in the Sultanate of Oman and to live up to its stated goal to be the most preferred Port in the region. With these multiple services and capabilities coupled with excellent hinterland connectivity, it is abundantly clear that the Port of Duqm is steadily steaming towards a coveted position as the premier port for heavy, break-bulk and industrial cargo in the region.

Terminal operator for overdimension cargo The Port of Duqm is becoming the

54 MAY 2019

country’s preferred port of call for over-dimensional cargoes. Its efficient operational force offers a range of multiple, sophisticated, extensive port-handling services for the shipping industry. As a case in point, the Port has competently accomplished a project cargo discharge operation to facilitate the underconstruction Harweel Wind Power Project, one of Sultanate’s key infrastructure projects. Port of Duqm facilitated the arrival of 39 Rotor Blades and Towers for the wind turbines. A major operation to offload and settle 65-meter-long (each) Rotor Blades and 83-meter (each) Tower was well accomplished during the last quarter of 2018. When completed, this 50MW Wind Power Project will be the country’s first wind farm and will provide a major contribution to the

Sultanate’s position as a clean energy leader in the region. This Wind Farm is a joint venture project of the Abu Dhabi Future Energy Company (Masdar) and Rural Areas Electricity Company (RAECO) and is located 556km from Port of Duqm at Harweel in the Southern Dhofar Governorate covering a total area of 200,000 square meters. It is the first project of its kind in the Gulf region and will offset 110,000 tons of carbon dioxide emissions and will electrify an estimated 16,000 homes in the region. For the Port of Duqm the successful and timely delivery of the rotor blades and towers consignment marks an important milestone in supporting the comprehensive logistics of heavy-lift cargo associated with this project.


PORT OF DUQM ROUNDUP

Structural break-bulk cargo Oil Country Tubular Goods (OCTG) pipes, comprising seamlessly rolled pipes replete with casing and tubing used extensively for the oil and drilling industries, is the first structural break-bulk cargo eminently suitable for and naturally attracted to the Port of Duqm. With its unique, convenient location and cast-iron reputation as the ‘one stop shop’ Port equipped with the know-how and proficiency for unloading operations of this nature, the Port of Duqm is considered the entrepôt for the entire OCTG supply business for the entire country. Given its central location midways along the country’s coastline and its nearness to the oil and gas concession and exploratory areas, the Port of Duqm has been groomed

and developed to facilitate functions of the kind shippers and logistics services providers undertake to provide. Large storage and warehousing facilities at the Port of Duqm close to eliminate the need for intermediate and inland stock points and this in turn has economical implications. Consequently, there have been immense cost savings for consignees and consignors for multiple reasons including reduction in inland transport costs; reduction in handling and storage costs due to just-in-time deliveries; cost reduction due to rig returns and repairs; decrease in warehousing costs as no intermediate inland storage is required. It is estimated that the overall cost savings to the industry will exceed US$ 80 million within the next three years. OCTG volumes are on the upswing and

are expected to reach 200,000 MT annually. On an average 5 to 6 vessels arrive every month mainly from China, India, Japan and Brazil in South America. Incidentally, this is also spawning thriving ancillary businesses for repairs, GRE (Glass Reinforced Epoxy) anti-corrosive lining, external coating, threading, slotting and more. The Port of Duqm is becoming the new hub for break-bulk business and for ship owners it opens new avenues to harness these vessels for other businesses thereby facilitating imports for alternative cargo streams as well. Port of Duqm’s vision“to be the most preferred multi-purpose port in the region”is gradually being transformed into reality as its emerging as one of the vital gateways for all cargo vessels.

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E-COMMERCE SCAN

The E-commerce Conundrum

Stuart Milligan

The logistics sector is laden with problems and issues. Among many others thee include problems such as balancing service with cost, managing carbon emissions while delivering more volume, and ensuring safety of workers and the general public in an increasingly busy society. All of these issues are inherent challenges within an E-commerce strategy. The key is to find solutions for these vexing issues for E-commerce to grow explains Stuart Milligan, Course Leader, MSc International Logistics and Supply Chain Management, University of South Wales, in this OpEd contribution.

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he UAE is on the verge of an exciting phase of E-commerce growth, with sector experts forecasting that the market will be worth US$ 10bn by next year, reflecti a 400% growth in 2 years! E-commerce is attractive to retailers because it allows them to reach new and global markets and grow their market share. E-commerce is attractive to the customer, representing a seamless, personalised

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shopping experience that allows them to shop wherever and whenever, for whatever they want. Research also indicates that E-commerce customers spend more per transaction and are more loyal. However, one aspect that is often overlooked is the impact that this has upon logistics. It may sound obvious, though it is often underestimated, that E-commerce requires a different logistics solution to ‘traditional’ offline retailing. In offline retailing, the distribution function manages large volumes to few locations (distribution centre to store). In E-commerce the opposite is true, with individual items being delivered to many different locations (people’s homes). Early adopters of E-commerce have struggled to adapt to these logistical challenges for two main reasons. First, early adopters tried to make E-commerce fit into their existing infrastructure and ways of working, and secondly, the technologyenabled solutions of today were not as well developed or accessible when E-commerce first emerged as a retail platform. The integration of E-commerce into an existing supply chain is enormously complex since different retail sectors present different logistical problems. These problems tend to pertain to inventory visibility and inventory flow.

Non-food E-commerce In the non-food sector, E-commerce can drive a proliferation of stock in the distribution tiers of the supply chain. E-commerce retailers are not bound by the same space constraints as offline retailers and can therefore offer a much greater range of product to the customer. To highlight this development, Carrefour reports that they have a product range of 90,448 SKUs compared to Amazon who report that they offer 564,000,000 different products. It follows that this increased range require additional stock holding. For fastmoving items this presents no real issues. However, for slow-moving items, it can result in retailers holding a large inventory of an item which may take several years to sell, and which may even become obsolete before all of the stock is sold. Shorter cycle times mean that retailers must be able to deliver stock to customers very


E-COMMERCE SCAN

quickly. In order to do this, they either have to hold inventory in locations close to their market or have the ability to move stock very quickly through their distribution network. This means that retailers either have to hold inventory just in case or incur the cost of additional movements, often using lessthan-full truckload movement upstream. Research and case examples indicate that the best solution to optimise availability and cost is to develop strategic relationships with suppliers so that, where geographically and economically beneficial, the suppliers will deliver direct to the customers.

Food E-commerce The perishability of product in the food sector also presents challenges for the E-commerce retailer. There are two predominant models incorporated in the E-commerce food sector. Offline retailers that incorporate an online channel tend to use the stores as a fulfillment centre, operating click-n-collect and home shopping propositions from the store. For perishable goods, retailers guarantee a minimum shelf-life on products. In reality, this means that the focus of the store has now shifted from one where the offline customer is priority, to a strategy where the in-store inventory is prioritised to satisfy online customers who may only represent around 15% of total sales. The result is increased food waste and shrinkage for the retailer. Pure online E-commerce food retailers operate a ‘dark store’, a warehouse where the orders are picked, packed and then shipped to customers homes. This model benefits from a focussed online proposition, bringing with it associated inventory benefits. However, research indicates that the dark store model is only really cost-effective in densely populated areas with high demand. The table below shows the optimal models by sector: Sector Distribution Customer fulfilment Non-food Supplier Store showroom partnerships Food Store as Click n collect fulfilment centre

Last mile logistics Last-mile logistics is still a major challenge for E-commerce strategies irrespective of the sector. Increased E-commerce activity has been associated with increased urban logistics,

leading to increased congestion, poorer air quality, and increased road traffic incidents. In mature E-commerce markets, retailers tend to compete on price of delivery and lead time, often resulting in net shipping costs being greater than shipping revenues received as retailers struggle to meet same day/next day shipping commitments. When E-commerce was first adopted, retailers implemented a common-sense approach to shipping. The customer proposition would be that an online delivery would take 3 to 4 days to arrive. This delivery time didn’t represent the shortest possible time to fulfil the order, it represented a reasonable time for the retailer to optimise deliveries in that geographical region, resulting in fuller vehicles and less trips. If customers needed a quicker delivery time, then they expected to pay a premium for it. The advent of same day/next day deliveries at very low cost has led consumers to expect good to be delivered for next to nothing, if not for free. This model is not sustainable, especially as E-commerce sales continue to rise. Reverse logistics is another significant consideration in E-commerce strategies, with returns of online goods being double those of offline purchases. Traditionally, retailers have viewed returns as a secondary concern, but within E-commerce it must be viewed to be of equal importance as sales. The models that work best are click-ncollect for food items, while buy online, and pick-in-store models are preferred for non-food items. Non-food retailers who use stores as showrooms tend to benefit from increased sales and less returns.

E-commerce technology The advent of Industry 4.0 and its associated technologies promises to be a real game changer for E-commerce. The research and application of these technologies are still very much in their nascent stages, however there is great potential for blockchain, big data, machine learning, autonomous robots and cloud computing technologies to revolutionise E-commerce. We are already starting to see robots entering the workplace, working alongside humans to increase efficiency, and retailers using big data to increase the accuracy of forecasting and programmatic advertising to provide personalised adverts. The big

Stuart Milligan Course Leader, MSc International Logistics and Supply Chain Management University of South Wales Stuart Milligan joined the University of South Wales in 2016 and is the Academic Manager for procurement, logistics and supply chain management. He is also the Course Leader for the MSc International Logistics and Supply Chain Management in the UK, and for the course at the Dubai campus, which will run from September 2019. Alongside teaching, Stuart is studying for a PhD. His research is based on the impact of adopting an omni-channel strategy, and his research interests include supply chain strategy, sustainable operations and the impact technology has upon the supply chain.

challenge with E-commerce is knowing what inventory you have and where you have it. RFID has been widely used in retail for a long time, with the use of blockchain and cloud computing the entire supply chain can be joined together to give live, realtime inventory visibility. This will reduce cycle-time, reduce stock-outs, reduce waste, reduce inventory holding and increase sales.

The future The UAE is on the verge of a very exciting time with regard to E-commerce. Not only because of the incredible growth forecast in the near future but also because its excellent infrastructure, high rate of technology adoption and logistics expertise promises to enable the country to be the leading light in E-commerce.

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Amazon moves to one-day order delivery Amazon ushered in a revolution that is even now constantly evolving and changing the rules of the game. Tom Craig, President LTD Management, Pennsylvania, USA, a leading authority and professional consultant on logistics and supply chain management and regular contributor to Global Supply Chain outlines Amazon’s changing phenomena from retail to operations to logistics

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mazon redefined retailing, E-commerce, and boosted omnichannel with free, two-day order delivery. They did it by transforming supply chain management (SCM) into being the strategic execution and driver to accomplishing it. With this, Amazon generated chaos and disruption in retail and to CPG (consumer packaged goods) and FMCG (fast-moving consumer goods) manufacturers and suppliers. The term ‘retail apocalypse’ was used to describe store closings and the growth of online selling. E-commerce is about convenience. With that the power has shifted to the customer. Before, stores had the power once the person walked in. Now that person can source his needs with searches and apps – and delivery – while staying home. What Amazon did was to develop a new reality and how to sell and service it. Customers have the power now. This contrasts to the prior where retailers had power because customers went to their stores. Not any more now. Customers can source what they want and buy when they want to have it delivered. To do the customer delivery that separated them from the online competition, Amazon

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developed a new supply chain management with end-toend velocity to drive inventory velocity that is required for order delivery velocity. They weaponized SCM (supply chain management) and integrated into their overall strategy. Gaining speed included setting up their own forwarding service in China, leasing planes to move products quickly, buying trucks for deliveries, and more. This meant reverse outsourcing, bringing activities in-house. They have sown seeds of disruption in how supply chains are designed and operate and how logistics can be incorporated as more than separate activities. Now they plan to spend US$ 800 million to be able to provide one-day order delivery. This is a game changer for retailers, e-commerce firms, CPG/FMCG manufacturers and suppliers, supply chain management, and logistics providers and 3PL companies. Across the gamut, customer expectations are being raised. Customer service has new meaning.

What Now? If what Amazon did before was considered

disruption, this action reconceptualizes selling, customer focus, supply chain management, and logistics. The challenge then is what is next for retail, e-commerce, CPG/FMCG manufacturers and suppliers. This test is also with logistics providers and 3PLs as Amazon implements its strategy, as its competitors work to transform, and what is expected with logistics changes to provide velocity.


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Retailers and CPG manufacturers and suppliers A few retailers have been aggressive in competing with Amazon. For various reasons, some retailers and FMCG companies do not have an e-commerce omni-channel with using updated supply chain management. As a result, they have not been aggressive in establishing a robust e-commerce omnichannel capability and have not transformed their supply chains to drive success for the two-day order delivery standard. This includes manufacturers and suppliers who have not adapted their supply chains to

meet the requirements of active retailers and e-commerce firms nor have developed their own strong e-commerce activity. This group has significant work ahead. Some of those slow to adapt also define supply chain performance by logistics costs. They also lament last mile cost. These are misdirection. Logistics costs have little to do with performance. It should be measured by measures that are company related. Perhaps the best metric is the Perfect Order, an order/restock that is delivered complete, accurate, and ontime. It is the ultimate customer-focused result. First, to develop the needed total supply chain, companies should: Recognize and understand the complexity and length. Assess using performance metrics. Map it. Segment Prioritize Design, test, and implement the new supply chain. A little recognized challenge to improving velocity is the presence of logistics providers. Some are placed there with outsourcing. Others are there because of their position – such as ports. All should be evaluated as to need, role, risk and impact on inventory speed. The above analyses give a picture of where the company is – the starting point for change. Different views – assess, map, segment, prioritize – and the insights they provide are important for the design.

Transforming the supply chain raises competitive position and mitigates risk of falling behind for customer sales. In designing, the new end-to-end, omnichannel supply chain with velocity should include these essentials: Integrated Structure – process, technology, organization Time compression. Excess time both delays inventory movement and creates the need for additional inventory as a buffer – and more working capital Focused on both upstream where supply of supply chain begins and downstream where restocking and fulfillment get attention Network aligned to the channels being aggressively serviced for success Remember that a dynamic supply chain in constant flux. Data analytics and predictive analytics are good to position, reposition, restock, stock, inventory at the proper location in the end-to-end Supply Chain. That is good for inventory velocity.

Logistics Firms Amazon has brought in-house, or reverse outsourced, different logistics activities – freight forwarding, planes, trucks, and more. Removing middle parties can improve velocity. These actions have had some call Amazon a logistics company and raised discussions on their offering their services to other companies. This concern has validity. Given the internal benefit of what is being done, they are establishing an end-to-end supply chain service, not a logistics service. Think of it as a single-source, integrated 3PSCM (3rd Party Supply Chain Management) or a SCMaaS (Supply Chain Management as a Service) and the potential it brings to the market. This would be a new service and opportunity. Given Amazon’s supply chain success, it would be an interesting service offering to firms.

Conclusion What Amazon has and is doing will go beyond e-commerce and its Direct-to-Customer. It will cross industries, markets, channels, and countries. Customers will raise their requirements on order delivery and perfect orders. The thinking is – ‘If it works for Amazon, then it should work for any firm.’ Few will be immune from the extended disruption and its transformation.

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CARGO MANAGEMENT DIGITALISATION

Etihad Cargo’s digital transformation ushers in new era of cargo management Etihad Cargo is reaping dividends following the adoption of its air cargo digitalisation and innovation programme six months after migrating to a new technology platform

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ollowing the adoption of a new, advanced technology system, Etihad Cargo has attained a remarkable change in its operations and engagement with its customers. Last year, the carrier embarked on a strategy that saw the introduction of several transformation programmes across its fleet and network, commercial and operational processes, and its physical and digital infrastructure. This culminated in the carrier’s successful front-end systems migration to the market leading IBS iCargo solution in October 2018, and celebrated the launch of its online booking portal www.etihadcargo.com Etihad Cargo now has over 6,000 unique registered users making online bookings

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every month, and the numbers are continuing to trend upwards. Around 20% of the bookings were made online during the last week of March this year. Building on this initial digital investment, round the clock work within Etihad Cargo has continued with the carrier successfully completing trials for another major distribution channel, using automated Freight Forwarder Messaging (FFR) to instantly allow bookings to be made and confirmed.

Successful and seamless roll out These pilots were undertaken with DHL Express and DB Schenker and completed successfully in March 2019, and are in the process of being progressively rolled out

across their global operations as well as to other key forwarder customers. “Etihad has placed investments in digital transformation and innovation at the core of our new strategy, underpinning a renewed customer-driven culture within the organisation,”affirmed Rory Fidler, Head of Technology and Innovation, Etihad Cargo. Another innovation will soon make booking with Etihad Cargo even easier, with the development of a new distribution channel featuring Application Programming Interface (API) along with web services, which will provide customers with quote-tobooking functionality before the start of the third quarter. In addition to the real-time insights afforded by the IBS iCargo platform, the ongoing implementation of market-leading Customer Relationship Management software Salesforce, and use of Enterprise Business Intelligence will provide visibility and insight into customer and market trends and developments. “As we move forward, we will continue to invest in technology and seek to put ourselves at the forefront of the industry’s drive for digitalisation,”added Fidler.


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