Global Supply Chain November 2016 Issue

November 2016 Issue 31

ENHANCING THE BUSINESS OF LOGISTICS

HANDLING THE RETURNS

SUPPLY CHAIN RSA

Expanding into new markets and enhancing old ones

JAFZA

Working hard to be no 1

Dubai Airports

TrafďŹ c movement enhancements

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Best Solution in Petrochemical Logistics

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The return supply chain SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3978847/3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Director: Peter Dass peter@signaturemediame.com Managing Editor: Munawar Shariff munawar@signaturemediame.com Art Director: B Raveendran ravi@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

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

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

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Regionally online retail is a growing sector. A lot of shopping can now be done online - another add on to convenience our busy lives. So, once online shopping gains more popularity and more and more people get used to it, there is bound to be an increase in the returns supply chain business. Which in simple words is what happens to a product when it has to be collected back from the consumer and sent to the brand warehouse.

Other parts of the world where online shopping is at a more advanced stage, this business is vast and comes with its own set of operational guidelines and challenges. Our cover article takes a look at this aspect of the retail industry and how we can learn from other markets in order to transition into a smoother end-to-end solution. Pg 28.

Dubai Airports is ensuring delays are as minimal as possible. HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airports, President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates Group, Chairman of Dubai Air Navigation Services (dans), recently launched Approach Peak Offload (APO) – an innovative air traffic management procedure that has led to an increase in average air traffic movements – from 33.2 to 34.8 - for arrivals during peak hours, as well as reduction of peak arrival delay by 40 per cent at Dubai International Airport (DXB). Page 44.

The global deployment of Radio Frequency Identification (RFID) technology, which can accurately track passengers’ baggage in real time across key points in the journey, can enable the air transport industry to save more than US$ 3 billion (AED 11 billion) over the next seven years. Global IT provider SITA and the International Air Transport Association (IATA) revealed that the highly accurate tracking rates of RFID technology could reduce the number of mishandled bags by up to 25 per cent by 2022, mainly through efficient tracking. The SITA/IATA business case, released at the IATA World Passenger Symposium in Dubai, outlines how this will provide a major saving for airlines, and deliver more certainty for passengers. Initial deployments of RFID by airlines, such as Delta Air Lines, show a 99 per cent success rate for tracking bags. Page 36.

This and so much more, Do write in and let us know your thoughts and feedback.

Munawar Shariff Managing Editor munawar@signaturemediame.com

NOVEMBER 2016 3

November 2016 Issue 31

ENHANCING THE BUSINESS OF LOGISTICS

30 06 News 16 Country report - India Indian economy remains on growth path Manufacturing, services and urban consumption are major contributors to projected growth

24 RSA – Continually improving Expanding into new markets and enhancing old ones, RSA is growing strategically

30 Cover Fixing the growing reverse supply chain problem Retailers are grappling with the growing problem of returned goods, and cost, of return waste 4 NOVEMBER 2016

48 A step ahead 36 Lost baggage? …

Never again!

IATA introduces new initiatives and technologies to make travel easier and more cost effective

40 JAFZA – the trade gateway The work behind the scenes that contributes to the success of the freezone

44 Traffic movement enhancements The implementation of Approach Peak Offload has led to a boost in the air traffic movements capacity at Dubai Airports, and a reduction in fuel consumption

Important points to consider for a logistics centre of excellence for supply chain

50 6 keys to an effective returns programme What best practices should you incorporate into your reverse logistics program?

52 Guest column Adapting to the ‘new normal’ Mustapha Kawam, President and CEO, Globe Express Services, writes about the changing face of supply chain management

54 Addressing an important demographic Strengthening the resilience of women and girls in the Arab region

Oman Air Cargo wins Best Cargo Airline

Abu Dhabi Ports scoops three awards at the 2016 Maritime Standard Awards Abu Dhabi Ports has won three prestigious awards at the 2016 Maritime Standard Awards of the Middle East and Subcontinent. The company was recognised for its excellence in the maritime industry, and was awarded the Deal of the Year Award for the recent agreement signed with COSCO Shipping Ports Lmtd-Abu Dhabi; the Technology and Innovation Award in recognition of its port community system, Maqta Gateway; and the Maritime Standard Woman in Shipping

6 NOVEMBER 2016

Award, which was given to Noura Rashed Al Dhaheri, Cruise Terminal Manager, for her valuable contributions and efforts in developing the cruise terminal at Zayed Port.

Representatives from Abu Dhabi Ports received the awards at the ceremony held at Atlantis The Palm in Dubai, under the patronage of His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airports; President of the Dubai Civil Aviation Authority; Chairman and CEO of Emirates Group.

Oman Air Cargo has been awarded ‘Best Cargo Airline for Valuable Goods – North and East’, at the India Cargo Awards 2016, held in Delhi. The award highlights the recent developments in the Cargo division, as Oman Air embarks on an aggressive growth plan for its Cargo operations.

Mohammed Al Musafir, SVP Cargo – Commercial, said, “We are honoured to receive this award as a testament to our focus on customer satisfaction and offering best-inclass services to our clients. As Oman Air Cargo looks to strengthen its presence in the region, winning an award based on Internet customer voting is a true mark of our attention to customer feedback, which drives our continuous endeavours in service refinement.”

India Cargo Awards is India’s first internet voting-based awards, launched in 2015, and supported by Ministry of Civil Aviation as well as Air Cargo Agents Association of India (ACAAI), Domestic Air Cargo Agents Association of India (DACAAI), Express Industry Council in India (EICI), Federation of Indian Export Organisations (FIEO), and Federation of Freight Forwarders’ Association in India (FFFAI). Representing Oman Air Cargo at the awards were Jagjeet Sohal, Airport Services Manager, Delhi, and Deepak Mishra, Sales Manager Delhi for Sharaf Cargo India Pvt Ltd – Cargo GSSA India.

Qatar Airways increases flights to KSA Qatar Airways has announced an increase in services to Dammam and Riyadh, connecting travellers from Saudi Arabia to more than 150 worldwide destinations through the award-winning Hamad International Airport in Doha.

From October 30th, 2016, Qatar Airways will add another eight flights a week to Riyadh, and one more daily flight to Dammam, increasing its connectivity to the two major Saudi cities. Through its hub in Hamad International Airport, Qatar Airways will operate four flights a day to King Khaled International Airport in Riyadh, and five daily flights to King Fahad International Airport in Dammam.

Qatar Airways, the official sponsor of Al-Ahli Saudi FC and FC Barcelona, recently announced hosting a friendly football match bringing together both teams to play at Shiekh Thani Bin Jassim Stadium (Al-Gharrafa Stadium) on December 13th, 2016.

Qatar Airways holds first group safety and security conference

His Excellency Akbar Al Baker, Group Chief Executive of Qatar Airways addresses senior management at the company’s first annual group safety and security conference, held recently at the airline’s hub in Doha.

Qatar Airways Group held its first annual conference on safety and security for its staff, with an agenda designed to embed the Group Policy that safety and security is the highest priority, as expressed in all Corporate Values. The team members were educated on the robust processes spanning several operational areas.

Named Priority 1, the one-day conference aimed to provide companywide awareness on how various departments are implementing bestin-class processes, to share information, and enhance collaboration throughout the organisation. Over 600 executive leaders, managers and supervisory staff from the Qatar Airways Group attended and participated in 16 interactive sessions. The conference was opened by His Excellency Akbar Al Baker, Qatar Airways Group Chief Executive.

Qatar Airways Senior Vice President Group Safety and Security, Ashish Jain, delivers a presentation at the airline’s first annual group safety and security conference, titled ‘Priority 1’.

Senior Executives from the Qatar Airways Group attend the ‘Priority 1’ safety and security conference at the Oryx Rotana Hotel in Doha, Qatar.

Qatar Airways Group Chief Executive, His Excellency Akbar Al Baker (centre right) and Captain Abdulrahman Al Hammadi – Director of Air Safety Department, Qatar Civil Aviation Authority (centre left), Ashish Jain – Qatar Airways Senior Vice President Group Safety and Security and other distinguished guests attend the airline’s first annual ‘Priority 1’ safety and security conference.

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International climate agreement calls for environmentally preferable alternatives Companies and industries across the Middle East are set to increase their efforts in using alternative coolants for air-conditioners and refrigerators, following the signing of a global agreement to reduce greenhouse gas emissions.

More than 190 countries agreed to an amendment to the 1987 Montreal Protocol that would phase down the use of hydrofluorocarbon (HFC) materials, which are currently used in air-cooling systems, refrigerators, and as blowing agents in foam for thermal insulation. This amendment is the result of efforts that began in 2015 during the Dubai Pathway meeting.

By reducing the use of chemicals with high global-warming-potential (GWP), the historic

amendment aims to limit the global temperature increase to no more than 0.5 degrees Celcius by the end of the century.

Honeywell Fluorine Products Middle East has developed and is producing next-generation, environmentally preferable alternatives that are available today under its Solstice® product line as an option to accelerate the transition from HFCs and other high-GWP materials.

The company estimates that global adoption of Solstice products will reduce global greenhouse gas emissions by an equivalent of 475 million metric tons of carbon dioxide by 2025, the equivalent to removing 100 million cars from the road for one year.

Dubai Trade and Imdaad collaborate to offer advanced e-payment solutions Dubai Trade and Imdaad have announced the integration of Imdaad’s website and Dubai Trade’s secured e-Payment gateway, Rosoom. Almost 3,000 of Imdaad’s customers can now process payments online, eliminating the need to visit its customer service centres for payment transactions.

The partnership reflects both organisation’s commitment to adopt smart solutions and sustainable development.

Rosoom will also allow Imdaad’s customers to choose from a variety of payment options, including major credit cards, direct debit by linking to the online internet banking portals of major banks, and pre-payment tools, such as the e-Dirham. Imdaad’s new e-services portal, accessible through www.imdaad.ae, will

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also enable its customers to enquire about work orders and invoices online.

Rosoom is compliant with the latest 3-D secure requirements, which aim to reduce fraudulent transactions and provide greater protection Eng Mahmood Al Bastaki to the businesses connected to it. The facility is also the exclusive e-Payment gateway for major organisations such as DP World, Jebel Ali Free Zone (Jafza), National Industries Park, Dubai Auto Zone (DAZ), Jumeirah Lakes Towers, Palm District Cooling, and Nakheel. 5. Jamal - Linkedin Image

Three CSR awards for Tristar The Tristar Group’s corporate social responsibility (CSR) initiatives have been recognised and awarded by three institutions in a span of six days. These awards reinforce the company’s philosophy, from when it was established in 1998, to be a responsible business.

Tristar Group CEO Eugene Mayne received the CSR Label certificate from Dubai Chamber Chairman H E Majid Saif Al Ghurair. The CSR Label has been designed to provide a diagnostic model, as well as a learning and development tool that will help companies define and improve their CSR strategy, related policies, and management practices.

UAE-China trade ties deepen with landmark judicial cooperation agreement Trade ties between the UAE and China have received a significant boost with the signing of a landmark cooperation agreement between two of the countries’ key commercial courts.

The Shanghai High People’s Court, the foremost business court in the commercial and financial centre of mainland China, and the DIFC Courts have agreed to work together to achieve shared strategic objectives, provide the basis for future judicial exchanges and deliver legal excellence.

The DIFC Court is the first foreign commercial court to cooperate closely with the Shanghai High People’s Court, with the agreement designed to reinforce commercial links between the two countries by bringing certainty to businesses through enabling them to trade securely. The agreement was signed by the respective heads of the two courts, Chief Justice Michael Hwang and Vice President Sheng Yongqiang, ahead of Dubai Week in China.

In a related but separate move, the DIFC Courts has published a guide for law firms and business on the mutual recognition and enforcement of monetary judgments in China and UAE. The guide is based on the existing 2004 Judicial Assistance Treaty between the People’s Republic of China and the UAE, and each court system’s own laws, and is available on www.difccourts.ae.

GE signs MoU with University of Bahrain to develop an innovation ecosystem GE has signed a Memorandum of Understanding (MoU) with the University of Bahrain to work together to strengthen the skills of young Bahraini engineers, and prepare them for advanced technical careers in line with the needs of employers and industry within the Gulf and wider region.

The strategic MoU underlines the spirit of industry-academic collaboration to promote training and applied research among Bahraini students, graduates and young professionals, and embed the

necessary skills that are needed to enter the workforce both now and in the future.

A series of planned activities and programmes will be rolled out as part of the long-term agreement, whereby GE and the University of Bahrain will work to develop a vibrant Research & Development (R&D) ecosystem in the Kingdom. The two entities will work on educating, developing, and training mechanical, electrical, industrial and computer engineering students working across the Digital, Power and Aluminum Smelting Sectors.

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Pure Harvest Smart Farms receives venture investment from Shorooq Investments Container shipping market still rocked by unpredictability Xeneta says that in-depth analysis of Q3 container shipping costs reveals positive trends for the beleaguered container carrier segment. However, the market remains highly complex and unpredictable, with the ‘Hanjin Effect’ already ebbing away.

According to Xeneta, which crowd sources shipping data from more than 600 major international businesses, covering more than 60,000 port-to-port pairings, and over 17 million contracted rates, the recent collapse of Hanjin laid the foundations for a trading period like no other.

States Xeneta CEO Patrik Berglund,“Looking at today’s data, we can already see that prices are trending down somewhat, meaning the Hanjin Effect is history. There is clearly still an issue of structural overcapacity, albeit more balanced now, and that pushes prices down – with risks for both the carriers and BCOs/shippers. Short term rates on the number two route – Far East Asia to North Europe – actually fell by 24 per cent in Q3.”

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On the plus side for carriers, Xeneta’s CEO notes that reported market low rates have risen spectacularly since Q1, climbing by 258 per cent from the end of that quarter to the beginning of Q4.

The data and trends are complex, Berglund admits, but the feedback from Xeneta’s network of global shippers is perhaps simpler to decipher.

He explains that large volume shippers seeking long-term contracts are reporting carriers aren’t prepared to negotiate near the bottom end of the current market, where many of the older, expiring long- term contracts sit.

Berglund adds the caveat that it’s“too early”to accurately predict the market for 2017 though, citing the unpredictability of a segment that changes almost daily. He argues that the only way for both shippers and carriers to keep up with these dynamic developments, and get the best prices for cargoes, is to utilise the latest business intelligence and analytical tools.

Pure Harvest Smart Farms announced the launch of its presence in the Middle East, following the close of a foundational investment of USD 1.1 million (AED 4040245) from Abu Dhabi-based Shorooq Investments to fund the regional development of a transformative agribusiness solution.

Concurrent with the announcement of the new venture, Shorooq acquired a 3.3-hectare farm site in Nahel, UAE, where Pure Harvest intends to establish the nation’s first high-tech, commercial-scale greenhouse, capable of year-round tomato production. The Company’s regional headquarters, to be based in Abu Dhabi Global Markets, will be led by Founder and Chief Executive Officer Sky Kurtz, and by Co-founder, Director and local partner Mahmoud Adi.

Xeneta CEO Patrik Berglund

DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem with President Petro Poroshenko during their meeting in Ukraine recently.

DP World signs MOU to develop logistics in Ukraine

Etihad Airways expands India – UAE services Etihad Airways today announced the expansion of scheduled services between Abu Dhabi and India as strategic partner Jet Airways unveiled new routes and additional frequencies to further strengthen their partnership in one of the world’s fastest growing aviation markets.

From early 2017, the two airlines will expand their services between the UAE and India by adding 28 weekly flights and three further Indian cities. With the newly-announced flights, the airlines’ cooperative services will cover 18 Indian cities with 280 flights each week.

The cargo market to and from India will also be enhanced through the additional capacity, supporting the 14 weekly freighters operated by Etihad Airways Cargo to five cities across the country – New Delhi, Mumbai, Ahmedabad, Bengaluru and Chennai.

DP World has recently signed a Memorandum of Understanding (MoU) with the government of Ukraine to collaborate on matters of mutual interest, including the development of logistics capability in the country. On a recent visit to Ukraine, DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem signed the MoU with the Ukrainian Minister of

Infrastructure Volodymyr Omelyan, and later met with President Petro Poroshenko, Prime Minister Volodymyr Groysman, senior ministers and officials.

Bin Sulayem also delivered a letter of intent from DP World for its P&O Maritime subsidiary to develop the tug and pilot boat services of Odessa port on the Black Sea.

DP World reports 2.2 per cent gross volume growth DP World Limited handled 47.5 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals during the first nine months of 2016, with gross container volumes growing by 2.2 per cent on a reported basis, and up one per cent on a like-for-like basis.

Their European and Indian subcontinent terminals continue to deliver a robust performance, while conditions in Australia and Latin America remain challenging. The UAE handled 11.1 million TEU, down 6.7 per cent year-on-year due to a reduction in lower-margin transhipment cargo.

Ooredoo wins 21 ‘Stevies’ Awards for Business Excellence Ooredoo was awarded 21 International Business Awards (IBAs), the leading global recognition of company performance and best practices, as well as ‘The People’s Choice Award’ in the telecommunications category, at a high-profile ceremony held in Rome, Italy. The International Business Awards, also known as the ‘Stevies’, honour the achievements and positive contributions of organisations around the world, receiving entries from more than

60 countries. This is the fourth year in a row that Ooredoo has been recognised by the awards, with judges citing Ooredoo’s success in integrating business innovation and the development of market-leading products with its strong communityfocused approach.

With 2016’s impressive results, Ooredoo has now been among the awards’ top ten most highly-recognised companies for three years running.

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Visa signs exclusive co-branded cards partnership with Etihad Aviation Group’s Global Loyalty Company Visa, a global payments technology company, signed a multi-year partnership with Global Loyalty Company (GLC), to develop a range of co-branded credit, debit and charge cards in the UAE, Saudi Arabia, India, Germany, Italy and Serbia. The GLC manages the four frequent flyer programmes of Etihad Airways Partners (Etihad Airways, airberlin, Alitalia,

From left to right: Yasser Al Yousuf, Managing Director, Etihad Guest; Darren Peisley, Chief Executive Officer, Hala Group; Kamran Siddiqi, Group Executive – Central & Eastern Europe, Middle East & Africa region, Visa; and Ihab Ayoub, Visa General Manager – Middle East and North Africa region.

Jet Airways, Air Serbia, Air Seychelles, Etihad Regional, and NIKI). The frequent flyer programmes include Etihad Guest, MilleMiglia, topbonus and JetPrivilege. This partnership will see the GLC issuing Visa products across the UAE, India, Italy, Germany, Saudi Arabia and Serbia, and will also look to expand to new markets.

Gulf Navigation Holding expands its fleet Gulf Navigation Holding PJSC is expanding the company’s fleet through a strategic longterm partnership with Wuchang Group, China’s heavy industry giant. The move aims to meet the increasing demand for

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transferring chemicals from the UAE and other GCC countries to global markets.

The signing ceremony took place during the Maritime Standard Tanker Conference, in the attendance of H E

Shaikh Daij Bin Salman Bin Daij Al-Khalifa, Chairman of Arab Shipbuilding and Repair Yard, H E Hani Al Hamli, Secretary General Dubai Economic Council, Eng Rashed AlHebsi, CEO of TASNEEF,

Ali Shehab Ahmed, Deputy Chief Executive of KOTC, and H E Aydin AlAftan, President of Turkish Shipbuilders’ Association “GISBIR” in addition to key decision makers from both parties.

Opportunities in Middle East logistics sector

Airlines look for new ways to solve a USD 60 billion problem Bad weather, natural disasters and strike action cost the travel industry up to an estimated USD 60 billion annually, equating to some eight per cent of global industry revenues, a new report on flight disruption finds today.

Airline Disruption Management, written by leading airline IT consultancy T2RL and commissioned by Amadeus, also finds that disruption spreads ‘virally’ throughout the travel ecosystem: the knock-on impact of planes and crews not arriving as intended means highly optimised networks see further cancellations and delays often from a relatively minor initial problem.

T2RL’s analysis for the report identified a range of findings based on interviews with leading experts from organisations across the travel industry, including American Express GBT, ANA, Gatwick Airport, IATA, Southwest Airlines, Star Alliance, Swiss International Airlines, and Yas Viceroy Hotel.

The current economic conditions mean that now is a good time to invest in the oil and gas logistics sector in the Middle East, according to experts speaking on day one of Breakbulk Middle East held at ADNEC, Abu Dhabi. Following the official opening by H E Dr Abdullah Al Katheeri, Director General, Federal Transport Authority, global management consultants A T Kearney discussed the impact of low energy prices on the region’s oil and gas transportation sector. Eduard Gracia, Principal, A T Kearney, explained that due to these low costs, high-cost oil and gas basins have lost economic appeal, and therefore investment globally has both reduced and concentrated on the low-cost reservoirs in the Middle East.

Cyril Varghese, Logistics Director from global EPC firm Fluor, moderated a panel that discussed the ways companies should manage risk, particularly in light of several high

profile bankruptcies of global firms working in the sector. There was consensus that there would be further consolidation of firms to enable them to weather the depressed economic landscape.

At the conference, a number of industry experts delved into a case study highlighting the kind of challenges faced by regional logistics operators, and how they have been addressed on a flagship development in the Gulf – the Upper Zakum UZ750 field, ZADCO’s major offshore drilling development 80 kilometres off Abu Dhabi’s coastline, one of the world’s most complex projects. The panel discussion was moderated by Matteo Pollara, Logistics Director, Petrofac Emirates, who provided an overview of the challenge set by ZADCO to reach a strategic target to increase input at the site to 750,000 barrels of oil per day for the next 25 years.

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The new Maritime Dubai corporate identity.

DMCA launches new ‘Maritime Dubai’ initiative As part of the ongoing initiatives to cement Dubai’s leadership in the global maritime map, the Dubai Maritime City Authority (DMCA) has launched its new ‘Maritime Dubai’ initiative. Placed under the management of Dubai Maritime Cluster Office, the initiative seeks to sustain the local maritime sector’s exceptional achievements

and lay the foundation for a new phase of development based on ambitious vision to promote Dubai as a maritime gateway to regional and global trades.

‘Maritime Dubai’ also focuses on encouraging members to engage in new businesses through trade promotion; attracting more foreign ships owners,

SERCO awarded extension to the Downtown Dubai Trolley System

by Emaar Serco has announced a three-year contract extension by Emaar Properties to continue management of the operations and maintenance of the Downtown Dubai Trolley System until 2019. Serco’s participation in the David J Greer, CEO project began in August Serco Middle East 2014, when engaged by Emaar Properties under an early operator involvement contract, giving advice on the system during the design phase.

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H E Sultan Bin Sulayem, Chairman of Dubai Ports, Customs and Free Zone Corporation and President of DMCA, unveiling the new Maritime Dubai identity.

operators and shippers to Dubai; promoting the emirate as a global centre for maritime training; facilitating communication mechanisms for all stakeholders; and organising international events to keep all stakeholders up-to-date with the latest maritime developments and information.

DarkMatter and NetApp announce partnership DarkMatter and NetApp have announced a partnership to jointly develop and deliver secure data storage and big data analytics solutions. With regional government and enterprise users increasingly looking to leverage big data analytics to drive business and operational improvements, large public and private cloud data storage solutions are required, which not only integrate seamlessly with their business processes, but also demonstrate the highest levels of security and cyber threat mitigation.

Through this agreement, customers in the Middle East will benefit from DarkMatter’s implementation of resource-efficient and scalable NetApp technologies that quickly ingest and analyse data, thereby empowering end-users with actionable insights in a predictable and efficient manner. These advantages are combined with DarkMatter’s recognised expertise in cutting-edge cyber security implementation and systems integration.

In the future, regional customers will enjoy the fruits of new collaboration between the two companies’ respective research and development labs. DarkMatter and NetApp software engineers and developers will work on multiple flash and data storage technologies with the goal of delivering innovative, highly secure, high performance cyber security defence and big data analytics solutions.

Mark Gibb

dnata announces new senior management appointments dnata has announced two new appointments to its senior management team. Steve Allen will take over as Divisional Senior Vice President, UAE Airport Operations, and Mark Gibb has been appointed as Senior Vice President, dnata Safety and Standards, responsible for dnata’s safety culture globally and the company’s One Safety programme.

Allen has 15 years of experience in British Airways, and helped design Heathrow’s Terminal 5 before joining dnata in 2008 as Vice President Operations, where he

was instrumental in the birth of the One dnata Strategy. He is part of the Emirates Group Innovation board, and currently serves as a board member at two UAE based group companies, Transguard and Plafond.

Prior to joining dnata, Gibb held senior leadership roles in the energy sector, most recently with Veresen, and before that with Nexen and Shell. With over 25 years of work experience, he has led successful change programmes in a multinational, regional and start-up organisations.

Steve Allen

Airbus group lends its support to the Fourth Annual QMARSEC 2016 Airbus Group has confirmed that it will be an official participant at the 2016 Qatar Maritime Security - Coastal and Border Surveillance Conference (QMARSEC).

Edwin Pittomvils, Senior Vice President and Head of Security Solutions for Airbus Defence and Space, an acknowledged leader

in the defence industry, will join the roster as keynote speaker. The involvement of Airbus Group further cements the position of QMARSEC as the indispensable opportunity for leaders of regional and international militaries to gather, learn and share ideas about the future of maritime security.

NOVEMBER 2016 15

COUNTRY REPORT - INDIA

Gadi Sagar artificial lake, Jaisalmer, Rajasthan, India

16 NOVEMBER 2016

COUNTRY REPORT - INDIA

economy remains on growth path According to the World Bank’s India Development Update, the country is remaining firmly on its growth path. Sectors such as manufacturing, services and urban consumption are major contributors to this projected growth

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he Indian economy will continue to post robust growth in the coming years, says the latest India Development Update of the World Bank. The Update also reviews the current challenges in India’s financial sector and analyses some of the impacts of the recommendations of the 14th Finance Commission on Indian states.

According to the Update, India’s economy expanded at a faster pace in financial year (FY) 2016 even as a number of its growth engines stalled. Agriculture – having faced two consecutive drought years – rural household consumption, private investments, and exports have not performed to potential.

The oil bonanza most directly benefited the government, which for the first time in five years exceeded its revenue collection targets

NOVEMBER 2016 17

COUNTRY REPORT - QATAR

and used the resources to contain the fiscal deficit, transfer more resources to states, and spend more on infrastructure. Capital spending by the central government was ramped up, its efforts amplified by state governments that had additional resources from larger fiscal devolution.

But it was urban households who were the main drivers Capital spending of growth in FY 2016. The by the central manufacturing and services sectors, which expanded 7.4 government was and 8.9 per cent, respectively, ramped up, its also created urban jobs.

Inflation abated, primarily efforts amplified by because of lower food prices. state governments Lower inflation raised real incomes, and allowed RBI that had additional to cut interest rates, which resources from favored the financiallyconnected urban households. larger fiscal To remain on this growth path and sustain growth at devolution. But 7.6 percent into FY17, the it was urban challenge for the Indian economy is to activate the households who stalled engines – agricultural were the main growth and rural demand; trade; and private investment, drivers of growth while ensuring that demand in FY 2016 from urban households and public investments, what the Update describes as the working engines of the economy, do not run out of fuel. The dissipation of the large boost from historically low oil prices in the past year will make this a challenging task, but prospects of a normal monsoon will help, the Update suggests.

The Update, a twice yearly report on the Indian economy and its prospects, expects India’s economic growth to be at 7.6 percent in 2016-2017, followed by a modest acceleration to 7.7 percent in 20172018 and 7.8 percent in 2018-2019. Even while uncertainty about the momentum of growth is high and downside risks substantial, these risks can be balanced in the short run by the possible upside from a favorable monsoon, says the Update. According to the Update, the most significant near-and mediumterm risks stem from the banking sector and its ability to finance private investment which continues to face several impediments in the form of excess global capacity, regulatory and policy challenges, in addition to corporate debt overhang.

“There are good reasons for confidence in India’s near-term prospects. However, a pickup in Jaisalmer, Rajasthan, India 18 NOVEMBER 2016

COUNTRY REPORT - INDIA Famous Wangfujing snack street, Beijing,China

NOVEMBER 2016 19

COUNTRY REPORT - INDIA

Chitli Qabar Bazar, Market street of old Delhi, India

other hand, concerns have investments is crucial to Inflation abated, arisen about growing nonsustain economic growth in the longer term. The recently primarily because performing assets (NPAs) and declining credit growth, approved Bankruptcy Code of lower food particularly in public sector is helpful in this regard, and banks (PSBs). once it is implemented it will prices. Lower The Update suggests help unleash the productivity inflation raised two key reform fronts for that Indian firms need in order to create jobs and real incomes, and the financial sector. First, accelerate the ongoing become globally competitive,” allowed RBI to structural transformation said Onno Ruhl, World Bank Country Director in India. cut interest rates, of the sector toward one that is more marketIn less than three decades, which favored oriented and competitive, India’s financial sector has for example by providing evolved from an essentially the financiallya roadmap for relaxing state-controlled system connected urban government mandates on toward one with greater banks. Second, address participation of private households the NPA challenge, both banks and generally more by its branches (through competition. Banks currently recapitalisation of PSBs and providing tools have capital levels in excess of regulatory for banks to manage stressed assets), and its requirements, regulations have been roots (through stronger governance of both strengthened, and overall credit growth commercial banks as well as the corporate in real terms has been resilient. On the

20 NOVEMBER 2016

sectors that have generated the largest share of NPAs).

“India’s financial sector has performed well on many dimensions and can be a reliable pillar of future economic growth.

However, accelerating structural reforms and addressing the non-performing asset (NPA) challenge remain urgent tasks,” said Frederico Gil Sander, Senior Country Economist and main author of the India Development Update.

Another significant step taken by the government has been the greater devolution of the spending power from the center to the states and local bodies, the Update says. States are now responsible for 57 percent of the spending, which accounts for 16 percent of GDP. Of this, nearly 74 percent of the funds are untied (compared to an average of 57 percent during the 13th Finance Commission period), allowing more flexibility to states.

An analysis of the FY17 budget documents of 20 states suggests all states gained following the implementation of the 14th FC recommendations in FY16, but the extent of gains varied significantly.

Tax devolution increased everywhere, even for states that saw a reduction in their inter-state share, such as Bihar and Rajasthan. Overall, transfer of grants to states increased by 0.7 percent of GDP in FY16 compared to the budget estimate of a net increase of 0.5 per cent.

Health and education expenditures increased in almost every state in FY16.Combined health and education expenditures increased in 13 of the 14 states for which data was available.

Education expenditures generally increased more than health, likely on account of implementation of the Right to Education Act and as states allocated additional amounts to cover lower contributions from the centrally sponsored schemes.

On average, states increased health and education expenditures by 0.4 percent of GSDP. Uttar Pradesh spent over one-third of its additional resources on health and education. Rajasthan and Kerala stand out as spending the equivalent of over 70 percent of additional resources on health, education, and infrastructure.

-www.worldbank.org

Sustainability in relation to transport of goods and people.

MAN Truck and Bus are constantly developing products and innovative solutions to provide operators of commercial vehicles and passenger transport services with sustainable transport systems. They are designed and engineered to make a positive contribution to the environmental, social and economic sustainability of the area they serve. Sustainability in transportation is predominantly measured by the effectiveness of the unit to move the load or people in an efficient, environmentally friendly manner thus reducing the impact on the climate. In short term, the improvements in fuel efficiency and reduction in vehicle emissions are contributing to an increase in air quality and the environment in which we live. MAN Truck and Bus do not just focus on the vehicle, it also focuses on ProfiDrive training and educating the driver to use the vehicle correctly which contributes to the achievement of highest levels of fuel efficiency. Therefore, a key element to sustainable transport is the training and professional ability of the driver of the vehicle. www.man-middleeast.com

Government of India and World Bank sign US$650 million agreement for the Eastern Dedicated Freight Corridor Project

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he Government of India and the World Bank recently signed a US$650 million agreement towards the third loan for the Eastern Dedicated Freight Corridor (a freight-only rail line) that will help faster and more efficient movement of raw materials and finished goods between the north and eastern parts of India. The project was approved by the World Bank Board on June 30, 2015.

The loan and guarantee agreement for the Eastern Dedicated Freight Corridor Project was signed by Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; M.K. Mittal, Director, Finance, Dedicated Freight Corridor Corporation(DFCCIL) and Hisham Abdo, Operations Manager and Acting Country Director, World Bank India, on behalf of the World Bank.

The Eastern Corridor is 1,840 km long and extends from Ludhiana to Kolkata. The World Bank is supporting the Eastern Dedicated Freight Corridor (EDFC) as a series of projects in which the three sections with a total route length of 1,193 km will be delivered sequentially, but with considerable overlap in their construction schedules. EDFC 3, approved by the Board on June 30, 2016, will build the 401 km Ludhiana–Khurja section which goes through Punjab, Haryana and Uttar Pradesh. The project will help increase the capacity of these freight-only lines by raising the axle-load limit from 22.9 to 25 tonne axle-load (upgradable to 32.5 ton axle loads) and enable speeds of up to 100 km/ hr. The DFC lines are being built to carry bulk freight trains of 6,000 to 12,000 gross tonnes.

The project is also developing the institutional capacity of the DFCCIL to build and maintain the DFC infrastructure network.

“The objective of the EDFC project is to augment railway freight carrying capacity along the Railway Corridor between Ludhiana and Kolkata. The project will

22 NOVEMBER 2016

benefit industries of Northern and Eastern India, which rely on railway network for transportation of material inputs and exports that would accelerate creation of jobs in the northern and eastern regions of the country,” said Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance.

The first loan of US$975 million for the 343 km Khurja-Kanpur section in the EDFC program was approved by the World Bank Board in May 2011 and is already under implementation. The project has already awarded contracts worth Rs 5,500 crore. The second loan of US$1.1 billion for the 402 km Kanpur-Mughalsarai section was approved by the World Bank Board in April 2014 and

is in the implementation phase. The major contracts for civil works and systems has been awarded with a total value of Rs 6,300 crore.

“Implementing the Dedicated Freight Corridor program will provide India the opportunity to create one of the world’s largest freight operations. The corridor, which will pass through states like Uttar Pradesh, will benefit from the new rail infrastructure, bringing jobs and muchneeded development to some of India’s poorest regions,” said Hisham Abdo, Operations Manager and Acting Country Director, World Bank India.“Moving freight from road to rail will reduce the carbon footprint of freight,” he added.

COUNTRY REPORT - INDIA

The Gateway of India, Mumbai, India

The EDFC is part of India’s first Dedicated Freight Corridor (DFC) initiative – being built on two main routes – the Western and the Eastern Corridors. These corridors will help India make a quantum leap in increasing the railways’ transportation capacity by building high-capacity, higher-speed dedicated freight corridors along the Golden Quadrilateral.

Currently, the rail routes that form a Golden Quadrilateral connecting Delhi, Mumbai, Chennai and Kolkata, account for 16 per cent of the railway network’s route length, but carry more than 60 per cent of India’s total rail freight.

Augmenting its transport systems is a crucial element of India’s trillion-dollar infrastructure agenda. Since the 1990s, road

transport has advanced more rapidly than the railways, and now accounts for about 65 per cent of the freight market and 90 percent of the passenger market in India, and those shares are growing.

“The Indian Railways urgently needs to add freight routes to meet the growing freight traffic in India, which is projected to increase more than seven per cent annually.

These freight lines will wholly transform the capacity, productivity, and service performance of India’s busiest rail freight corridors. At completion, it will be able to more than double its capacity to carry freight, with faster transit times, being more reliable and at lower cost,”said Ben L. J. Eijbergen, Program Leader,

Economic Integration and the Task Team Leader for the Project.

Significant Green Impact: In addition to the efficiency improvement and other operational benefits, the project is expected to bring in significant reductions in Green House Gas (GHG) emissions.

A Green House Gas Emission Analysis was conducted by DFCCIL for the Eastern DFC Project. The analysis shows that the Eastern corridor is expected to generate about 10.48 million tons of GHG emissions up to 2041-42, as against 23.29 million of GHG emissions in the absence of EDFC – a 55 per cent reduction in GHG emissions.

Economic opportunities are also being explored along the freight corridor. The government is planning to set up integrated manufacturing clusters using EDFC as the backbone. These clusters will be set up with an investment of about $1 billion on either side of EDFC. The loan, from the International Bank for Reconstruction and Development (IBRD), has a 7-year grace period, and a maturity of 22 years. -www.worldbank.org

NOVEMBER 2016 23

COMPANY UPDATE - RSA

RSA

Continually improving Expanding into new markets and enhancing old ones, RSA is growing strategically.

Munawar Shariff spoke to Abhishek Ajay Shah – co-founder and MD, RSA Logistics and Director of the Board at RSA-TALKE – to find out how

24 NOVEMBER 2016

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hen RSA entered Kenya in the 3PL space, it was on the back of customers in the Middle East, who were asking them to extend their services to East Africa. At the time, they first looked into solving the challenge of border clearances within East Africa, and transportation.“Since then, we have progressed into being a full-fledged 3PL provider, with an open yard of 25,000 sq metres and a facility for project logistics, finished vehicle logistics (FVL), and oil and gas. Further, we provide warehousing services for our retail and manufacturing customers to assist them in their growth. Finally, we moved into offering on-site logistics solutions for customers who have their own facilities, but were not clear on how to optimise their logistics operations. We step in and operate for them, giving them a business to business guarantee on operations,”says Abhishek Ajay Shah, co-founder and MD, RSA Logistics and Director of the Board at RSA-TALKE. When RSA entered the market, it was fairly similar to what it still is today. There is a highly fragmented supply chain, due to multiple risks that occur at different points of the supply chain. Their value addition was always to bring in a higher quality product for the MNC’s that would have liked to enter the market. Today, there is a flurry of foreign direct investments into the 3PL space, as Africa’s prominence as the final frontier continues.

COMPANY UPDATE - RSA

The Kenyan logistics market is expected to grow by 60 per cent through 2020. Kenya, being geographically blessed in terms of the surrounding population sizes has a significant advantage over other landlocked countries and is under pressure to have highly efficient ports, airports, and road infrastructure to serve those markets.

Logistics has been a vital part of how products get to the local populations, and export, in particular perishables, for which Kenya has been known.“We see the entire East and Central African geography as a key part of our long term strategy, and we believe in the local leadership’s goals to make Kenya a regional hub for the future,”says Shah.

UAE and region In terms of local business, one must understand that the core of a functioning and reliable chemical supply chain is the management system for health, safety, security environment, and quality (HSSEQ).

Given the nature of the products handled, utmost care is needed, and this can only be managed with an HSSEQ programme, which is stringently adhered to by all members of the organisation. A top-down approach to safety, combined with state-of-the art facilities, and highly knowledgeable and well trained staff are key.

Says Shah,“Being a logistics service provider, our value lies in our people, processes, and the technology we use to execute the service. We are consistently

these service providers can investing in all three differentiate themselves, in aspects to deliver an even Our in-house IT order to elevate themselves more amazing experience team is a proactive from vendor to partner to our customers. However, in all the markets we department at RSA, status for cargo owners.

“The main benefits of operate, human capital engaging in active digital are transparency and costs tend to be the collaborative potential, as largest aspect that we communication the various logistics partners must contend with, due with the customers in a supply chain can be to continual training and connected through clouddevelopment of our team.” to better based networks to deliver Two years ago, the optimised results. This boosts ME region had no understand their overall operational efficiency. issue with government requirements, Customer service can also funding, due to the be vastly improved through higher oil prices.“Now, and deliver a CRM software, as well as in some countries, local more efficient and being able to offer customers infrastructure investment new solutions through has seen a tremendous friendly service innovation,”he explains. slowdown, which has, in Being future ready, in RSA’s itself, impacted the entire opinion, is something that has come up as a supply chain. Coupled with that, the cost buzzword recently.“However, our foundation of operations has only continued to rise in and ethos has always been around being terms of the housing market and rate of ready to embrace the future. Thus, one of inflation, which has put even more pressure our core strategies was to always invest in on many organisations’ bottom line. Finally, technology to be one step ahead. At this there’s global volatility. Being headquartered stage, all we can say is that we are continually in the ME, we are used to it. However, it is preparing for the next step and working now on a global scale, ie, with Brexit and closely with our customers,”Shah smiles. the US election. We need to be more agile to As a company, RSA’s core strengths lie adapt,”he muses. in their specialist team and technological Leading players in the US$ three trillion capability, both of which continually allow (AED 11 trillion) chemical industry are being them to scale up operations. Says Shah,“Our advised to leverage logistics for their own specialist team is what drives the 360 degrees competitive advantage, and digital is the way

NOVEMBER 2016 25

COUNTRY REPORT - QATAR

supply chain solution that we offer our customers, having some of the leading talent in the industry in documentation, freight forwarding and warehouse operations. This is the key factor that has allowed us to offer onsite logistic solutions to our customers. Our in-house IT team is a proactive department at RSA, engaging in active communication with the customers to better understand their requirements, and deliver a more efficient and friendly service. The versatile team can integrate with all customer systems, generate

26 NOVEMBER 2016

customised reporting, as well as develop applications. The mandate of the IT team at RSA is to provide real-time data to customers for better decision-making and automate processes through innovation to make them faster, better and cheaper.�

This is where big data comes in. Big data ultimately enables you to improve operational efficiency, customer experience, and the ability to offer newer, better products and services, based on intelligence derived from the market. It is considered the next

revolution in business, and the commercial potential is immense. “The immediate benefits of Big Data are already plenty for logistics providers. We can use volume predictions to determine peak times and allocate resources accordingly. Parcel health can be assessed to determine the optimal route, in terms of safety, for fragile goods, for example.

Big data helps with risk analysis. It is also critical in transportation, to analyse vehicle health, and driver efficiency. We can also

COMPANY UPDATE - RSA

give customers a better understanding of time of delivery by observing trends in the movement of goods on repeat routes,” he explains.

RSA is now expanding to India, where operations will mirror what they are offering in the UAE.“However, with the passing of the centralised general sales tax in India, we are anticipating a boom in logistics, and preparing for the warehousing and transportation opportunities that will come with it,” Shah states.

Another exciting development is the progress in cold chain solutions. In June, they broke ground on a brand new facility, which is a dedicated, 10,800 pallet-positionwielding, high-tech warehouse that can store products up to minus 25 degrees centigrade.

“Our goal is to bridge an evident gap in the cold chain market, and provide a complete and committed solution, which maintains the integrity of the cold chain from manufacturer to consumer. This includes a transportation and distribution service offering,”he says.

The new facility, under the banner RSA Cold Chain (RCC), is located in the Dubai South free zone. However, it is in the non-bonded section, so there’s ease of access as well as ease of business.“In the run up to the Expo, we are anticipating a huge spurt in the movement of food products. The demand for processed food will apparently exceed US$ 175 billion (AED 643 billion) in the MENA region by 2020. We are ready to take on this challenge and deliver on our promise to serve the customers in a holistic way,”he concludes.

NOVEMBER 2016 27

COVER STORY

30 NOVEMBER 2016

COVER STORY

Online shopping is so much more convenient in these busy times - no driving, no looking for parking and more time to do other more important things, right? So what about if you don’t like a product that you ordered or it comes in a faulty state. You return it. And retailers are grappling with the growing problem, and cost, of return waste, says Kelsey Lindsey

Fixing the growing reverse supply chain

problem ver the years, retailers have become very good at the supply chain – the process of getting goods from the manufacturing plant to the customer.

But today, many retailers face a different challenge: taking those goods back, a process referred to as the ‘reverse supply chain’.

Every year, two million tonnes of retail returns are loaded into landfills, according to Environmental Capital Group, many of which are already brimming to capacity, and contributing to environmental problems like groundwater contamination and greenhouse gas emissions.

Many retailers expect the problem and cost of retail returns to grow, thanks to the rise of e-commerce, and more retailers offering free shipping and free returns. A recent study from eMarketer forecasted e-commerce sales in the US will grow 15.6 per cent in 2016, with e-commerce’s share of total retail sales poised to surpass ten per cent by 2018. Large

NOVEMBER 2016 31

COVER STORY

Every year, two million tonnes of retail returns are loaded into landfills, according to Environmental Capital Group, many of which are already brimming to capacity, and contributing to environmental problems 32 NOVEMBER 2016

retailers, from Macy’s to Target and Wal-Mart, have vowed to grow their omnichannel and e-commerce capabilities, offering new options to customers in order to compete with Amazon.

As retailers ramp up their offerings to keep up with changing consumer expectations and shopping habits, experts say the industry must place a greater emphasis on the reverse supply chain.

With the changing tide, retailers are finding they must be equipped to process returns from multiple channels in an efficient manner: an investment that makes environmental, and business sense, albeit one they have not traditionally focused on.

The forward supply chain’s ugly stepsister The reverse supply chain has historically been regarded as the forward supply chain’s ugly stepsister, an unmanageable ‘nuisance’ that siphoned away costs, according to Jonathan Byrnes, senior lecturer at MIT’s Center for Transportation and Logistics. But eventually, retailers couldn’t ignore lost profits.

As the costs stemming from a lax reverse supply chain hurt their margins, larger retailers began focusing on it about 15-20 years ago. In 2016, it’s becoming increasingly urgent. “Today, retailers have serious margin problems, especially from

COVER STORY

omnichannel competitors,” says Byrnes, adding, “So, they are looking under every rock,” including the reverse supply chain.

Part of the problem is that the process for returns hasn’t changed much over the years. Many returns to stores were, and still are treated more or less in the same way, according to Ann Calamai, Director of Sustainability for Logistics Technology company Optoro.

Once an item – let’s say a toaster – is returned, it is then kept at the store until the weekly arrival of a truck that transports the toaster and other returns to a central facility. At the warehouse, piles of unwanted merchandise are relegated

to a corner to be dealt with - maybe in a week, maybe in a month. Retailers can choose to refurbish the toaster and resell it, recycle it for parts, sell it to a liquidator, or dispose of it right there.

“What we’re seeing in that reverse supply chain is a lot of touches: The liquidator sells to other liquidator, who sells to wholesaler, and wholesaler has a flea market, or it’s an eBay shop – regular ol’ folks reselling merchandise,” Calamai says.

But if the goods do end up in the landfill, they will most likely stick around for years and years. Rubber boot soles take about 50-80 years to decompose in landfills; leather shoes, 25-40 years;

wool clothing, one to five years. With the number of returns likely to grow each year, the number of rubber boot soles and leather shoes festering away in landfills for decades will likely only increase.

“It’s unsustainable to constantly take natural resources and produce a product that’s eventually going to be thrown away. Summarily, it’s unsustainable to run a business not making money and not growing,” says Adam Siegel, VP Sustainability and Retail Operations at the Retail Industry Leaders Association.

“So sustainability, to me, goes handin-hand with business environmental opportunities.”

NOVEMBER 2016 33

The growing problem of retail returns

Once an item – let’s say a toaster – is returned, it is then kept at the store until the weekly arrival of a truck that transports the toaster and other returns to a central facility.

At the warehouse, piles of unwanted merchandise are relegated to a corner to be dealt with

34 NOVEMBER 2016

As consumers move online to order anything from a new camera to a new dress, retailers are grappling with high return rates.

In 2014, returns accounted for 8.89 per cent of all retail sales, up from 8.60 per cent in 2013, according to the National Retail Federation (Because the NRF changed its survey methodology in 2015, those figures aren’t comparable to previous years.) In total, US retailers lost more than USD 280 billion (AED 1,028 billion) in sales due to merchandise returns in 2014. If merchandise returns were a retailer, it would have been No 2 for sales in the Stores Top 100 list that year, according to the NRF. Most retailers expect that number to grow, thanks to the rise of e-commerce and more retailers offering free shipping and free returns, according to a Gartner survey of 300 retailers cited by MarketWatch.

“More and more stuff is coming back, and the traditional way that retailers are handling this inventory is pretty wasteful and inefficient,” says Calamai.

This process is costing retailers. While larger retailers have specific teams dedicated to their reverse supply chains, smaller and medium-sized retailers are still scrambling to create efficiencies. According to Byrnes, retailers generally lose 10-20 per cent of their profits to returns, an avoidable loss that can have serious effects in an already-competitive retail environment where even the smallest of margins can make a difference.

But retailers are not only losing money when they process returned goods. They are also losing valuable warehouse space,

according to Byrnes - prized square feet that could be used to process the growing influx of e-commerce orders almost every retailer is experiencing.

Retailers also have to work around the unpredictable nature of the reverse supply chain. Unlike the forward supply chain, which is tightly controlled by seasons and trends, the reverse supply chain can be completely erratic for retailers without the right analytics technology.

“The reverse supply chain is not the outbound supply chain run backwards,” explains Byrnes, adding,“It’s completely different, with completely different economics, and it needs a completely different optimisation.”

While a retailer can reasonably predict that parkas will be in-demand in the winter, it has little indication that customers will return a certain parka in droves. This problem is exacerbated by the habits of online shoppers, some of whom tend to buy apparel merchandise in a couple of sizes, and return those that don’t fit.

“Outbound is a retailer buying in big volume from merchandiser, where you can optimise it because its repetitive, you can forecast it, and all the factors can really be tightened,”Byrnes explains,“If you look at the reverse, it’s like a salmon swimming upstream, it uses different facilities, you do not want to co-mingle it on your shelves, and, once more, everyone calls [with returns] and they want to talk to you.”

How retailers can fix it While the factors playing into the reverse supply chain can be hard to predict, there are tangible steps retailers can take to reduce waste and save money. Both Siegel and Byrnes say that one of the first things retailers can do is to look upstream, diminishing returns by analysing the way products are sold to customers. Or, as Byrnes put it,“getting the right product to the right customer”.

This starts with customer service, both in-store and online. Talking to the customer, getting to know their preferences, and then recommending the perfect shirt, shoe, or household appliance to fit their needs helps guarantee that the customer is going to be happy with the product and not return it.

Of course, this style of highly personalised

COVER STORY

service requires a highly skilled and trained employee - and most likely, an increased investment on the part of retailers.

Online, retailers like North Face are launching sophisticated chat capabilities on their websites to bring service representatives to the online shopper. Powered by IBM’s Watson, the chatbot asks targeted questions to help customers filter through the vast inventory on North Face’s site, similar to the help that shoppers receive from salespeople in stores. In beta testing, customers engaged with the tool for an average of two minutes, with 60 per cent of them clicking through to product pages.

Byrnes also points to reviews as an effective mechanism that online retailers can use to guarantee customers get the right fit.

“I think that companies like Amazon are offering a lot of folk wisdom (through their reviews) about what is going to fit and what isn’t going to fit,” Byrnes says,“I think reviews are a way for potential customers to say, ‘Would this be right for me?’”

While good customer service is a way to reduce returns, it won’t eliminate them altogether. When customers do take or send

back a purchase, enhanced software is needed to efficiently process it. This could be something as easy as scanning a returned item, then using software to quickly determine the next best home for it, based on the item’s resell value, condition, and price. This ‘home’ can include the retailer’s shelves, a trip back to the manufacturer to be stripped for parts, recycled, or donated - anywhere but the landfill.

Like many things in retail today, the need for retailers to adapt these measures is urgent, according to Siegel.“The only way companies

are going to be able to survive changing consumer behaviour is they get really strong reverse supply chains, and get smart at how they develop this,”he says, adding,“You’re not going to succeed if you’re losing money off your reverse supply chain because inevitably, it is going to grow. The better the reverse supply chain, the better the environmental impact: If you have a tight reverse supply chain, that’s going to be a better environmental opportunity and a better business opportunity.”

Source: www.retaildive.com

NOVEMBER 2016 35

BY AIR

Lost baggage? … Never again!

At IATA’s World Passenger Symposium, recently held in Dubai, IATA introduced new initiatives and technologies to make travel easier and more cost effective for all stakeholders. IATA is bringing some real change in the industry

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he global deployment of Radio Frequency Identification (RFID) technology, which can accurately track passengers’ baggage in real time across key points in the journey, can enable the air transport industry to save more than US$ 3 billion (AED 11 billion) over the next seven years.

Global IT provider SITA and the International Air Transport Association (IATA) revealed that the highly accurate tracking rates of RFID technology could reduce the number of mishandled bags by up to 25 per cent by 2022, mainly through efficient tracking. The SITA/IATA business case, released at the IATA World Passenger Symposium in Dubai, outlines how this will provide a major saving for airlines, and deliver more certainty for passengers. Initial deployments of RFID by airlines, such as Delta Air Lines, show a 99 per cent success rate for tracking bags.

In particular, RFID will address mishandling during transfer from one flight to another, one of the key areas identified by SITA and IATA, where the technology could help improve baggage handling rates. RFID technology will ensure that airports, airlines, and ground handlers are able to keep track of bags at every step of the journey, and ensure the right bag is loaded onto the correct flight. The technology also supports IATA’s Resolution 753, which requires airlines to be able to keep track of every item of baggage from start to finish by 2018.

The deployment of RFID would build on the already significant savings delivered by the smart use of technology for baggage management. According to the SITA Baggage Report 2016, technology has helped reduce the number of mishandled bags by 50 per cent from a record 46.9 million mishandled bags in 2007, saving the industry US$ 22.4 billion (AED 82 billion).

This improvement comes despite a sharp rise in passenger numbers over the same period.

36 NOVEMBER 2016

BY AIR

NOVEMBER 2016 37

COUNTRY REPORT - QATAR

Capital spending by the central government was ramped up, its efforts amplified by state governments that had additional resources from larger fiscal devolution. But it was urban households who were the main drivers of growth in FY 2016

Jim Peters, Chief Technology Officer at SITA, said,“The airline industry is at the brink of a revolution in baggage tracking.

Deploying RFID globally will increase accuracy and reduce mishandling rates. This is a win-win situation – passengers will be happier, operations will run smoother, and airlines will save billions of dollars.”

Agreed Andrew Price, Head of Global Baggage Operations at IATA,“Over the past few years, we have seen more work to help airlines introduce and reap the benefits of RFID technology through better observation of their baggage operations. This has included trials, and, of course, the Delta Air Lines implementation. The advances in the technology and the immense benefits it

38 NOVEMBER 2016

brings to the airline industry has prompted IATA to revisit and fully explore the benefits of RFID today.”

“We are investing in RFID to further improve our baggage handling rates and improve the customer experience. RFID technology provides us with more data and more precise tracking information throughout the baggage journey,”reiterated David Hosford, manager of baggage performance strategy at Delta Air Lines.

The SITA/IATA business case shows that the improvements in handling rates do not come at a great cost. RFID capabilities can be deployed for as little US$ 0.1 per passenger on average, while generating expected savings of more than US$ 0.2 per passenger.

With some big airlines and airports already introducing RFID technology, combined with

the fact that it is compatible with existing barcode technology, adoption of RFID across all airports could provide a positive return for airlines, both in cost savings and passenger satisfaction.

SITA’s and IATA’s assumptions are based on RFID being deployed in 722 airports (representing 95 per cent of passenger numbers globally) over a six-year period, between 2016 and 2021, while the savings are calculated over seven years. The figures for 2016 take into account the RFID infrastructure already deployed, or about to be deployed, at multiple induction points on the baggage journey.

SITA’s research into RFID and baggage tracking is part of its ongoing investment in research for the benefit of the entire air transport community. Baggage tracking is one of the five community research programmes that SITA has launched to address some of the industry’s most pressing challenges. The

BY AIR

others are identity management of the future; the facilitation of IATA’s New Distribution Capability (NDC); an industry-wide disruption warning system; and enhancing cybersecurity across the industry.

Passenger services conference approves resolution on ONE Order Standard IATA has gone a step further to make passenger journey easier. It has adopted a resolution on a standard for the ONE Order initiative at the Passenger Services Conference (PSC). Leveraging the data communication advances from the New Distribution Capability, ONE Order will modernise and simplify airline order management, including the delivery, fulfilment and accounting processes related to airline products and services.

For passengers, ONE Order will mean the gradual disappearance of multiple reservation records in favour of one document, and a single order number.

“ONE Order will eliminate the need for passengers to juggle different reference numbers and documents along their journeys. With ONE Order, the only thing that passengers will need to be instantly recognised is their order number. It will greatly simplify the passenger experience and remove one of the hassles of travel - trying to find the correct document or number when dealing with an itinerary change or a travel disruption,”said Aleks Popovich, IATA’s Senior Vice President, Financial and Distribution Services.

The fundamental objective of ONE Order is to replace multiple rigid and paper-based booking, ticketing, delivery and accounting methods with a standard order management process based on a single customer order record that includes all the data: customer details, order item(s), including the air

ticket and additional products and services, payment, billing and fulfilment status information. The role of the Resolution is to put in place the framework for the industry to work with a single order, replacing a reservation, and separate accountable documents (e-ticket and electronic miscellaneous documents covering things such as ancillary products) as is the case today.

“Full adoption of ONE Order is a multiyear, multi-stage process that will engage many participants in the travel value chain, including airlines, travel agents, global distribution systems, passenger service system suppliers, airline e-commerce platforms, and others. We look forward to working with our partners in all areas to bring about this much-needed modernisation programme,”concludes Popovich.

NOVEMBER 2016 39

FREEZONE UPDATE

the trade gateway Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, Chairman of Ports, Customs and Free Zone Corporation, tells GSC everything that goes on behind the scenes that contribute to the success of the freezone

J

sizes to accommodate the afza started requirements of any company operations in of any size, and plots of land 1985, and today, for large-scale operations, its more than such as manufacturing, and 7,000 companies extensive warehousing to suit employ nearly 144,000 the needs of its diverse multipeople. What is the strategy national client base. for such success?

Jafza’s strategic location, Jafza has put in place a midway between Europe, vibrant and highly proactive Asia and Africa; its excellent business model, which multimodal logistics capability focuses on providing (next to the Middle East’s seamless services and support largest container port; 40 to its clients, in order to minutes away from the facilitate them to focus on region’s largest aviation hub, their core activities. Our one- Sultan Ahmed Bin Sulayem and well-supported with the stop shop model is a leading finest logistics and supply chain management example of our various customer-driven companies, who are based in Jafza), which offerings. We provide everything our customers facilitates efficient access to a potential market need under one roof, namely licensing, of two billion consumers, and an incentive registration, leasing, immigration services, etc. package that offers 100 per cent ownership, 0 All these services are also available online. per cent tax regime, unrestricted repatriation An outstanding logistics infrastructure is of funds, and recruitment of personnel, makes one of Jafza’s key strengths. A range of stateJafza one of the most favoured investment of-the-art facilities are provided at Jafza, destinations for global companies interested which include pre-built modern warehouses, in the region. ready to be leased, office space in various

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NOVEMBER 2016 41

FREEZONE UPDATE

What are the biggest challenges in operating Jafza, and continuing to attract companies/ institutions to base operations there?

Jafza’s facilities, including the office space, warehouses, and showrooms are in high demand, and our occupancy has reached 85 per cent. Though more facilities are being constructed, we are now moving vertical with the multi-storey concept; from warehouses to car storage.

What is your vision for how Jafza will develop over the next decade?

Last May, Jebel Ali Free Zone launched a string of new projects that will continue to position Jafza as one of the world’s leading free zones, attracting leading businesses from around the world.

The new projects include: Multi-storey warehouses: The concept of a multi-storey warehouse meets the increasing

42 NOVEMBER 2016

demand for Jafza’s facilities, as the free zone has reached high occupancy levels. Jafza has always been known as an innovator, and these are unique projects in the region. The project is located in Jafza South, strategically close to the Expo 2020 site, occupying an area of 207,000 square metres. The warehouse includes four floors, to be built in stages, with a total capacity of 500 units. The warehouse will range from 300-500 square metres, with average office space of 80 square metres.

Light Industrial Units/Warehouses: Jafza plans to construct a new complex for light industrial units and warehouses suitable for storage, as well as administrative office space. It will initially comprise 455 thermallyinsulated units, with the warehouse measuring 270 square metres, and individual office space estimated at 75 square metres. The units will cater for the integrated needs of the supply chain and logistics sector, enabling customers to distribute to regional markets

Onsite Residences: A new complex,

consisting of 30 buildings, each with 10 floors, will now be built to tackle the issue.

It will be able to house almost 30,000 employees, with restaurants, retail stores, and recreational areas planned alongside Of the various services/privileges you offer, what do your members consider to be the most important, aside being able to retain 100 per cent foreign ownership?

Jafza offers incentives to its customers to enable them to do business with greater ease and profitability. These consist of 100 per cent foreign ownership – in comparison to non-free zone areas, where majority local partnership is required; zero per cent corporate tax for a period of 50 years, a concession that is renewable; unrestricted repatriation of capital and profits; zero per cent import or re-export duties; zero per cent personal income tax; no currency

restrictions, and no restriction on hiring foreign employees.

Jafza’s product offerings ensure that you will find the right set-up for your needs, including plots of land, warehouses, showrooms, customised development solutions, offices, retail outlets, a business park, and even on-site residences.

How has the UAE free zone model changed over the past 30 years, and are there now too many? Should we expect to see consolidation of free zones?

Jafza, being the first free zone in the UAE, has set standards for others to emulate. Free Zones in the Emirate complement each other, and don’t compete. We have specialised free zones that operate in core sectors such as Industries and Logistics, Media, IT and Technology, Finance, Aviation, Education, and Sports. Dubai has 21 free zones, and under the Dubai Free Zones Council, we are

working cohesively to streamline various processes; thus ensuring consistency in the management and operations of all the zones.

where we have 1,090 plus companies, while 960 companies are functioning in the F&B, Pharmaceutical, and Packaging industries.

What impact has the slump in oil prices had on Jafza, if any?

By country or region, who are Jafza’s biggest trading partners? Can you give us some details?

Despite the challenges that surround the international market, Jafza is attracting new companies to set up their base here. As earlier mentioned, our facilities are running at 85 per cent occupancy. Companies based in Jafza continue to expand, and are requesting for additional facilities.

Could you provide a breakdown of the number of companies/employees in say, the top five industrial sectors housed within Jafza?

Logistics, Retail, and General Trading is the largest sector in Jafza, with over 1,300 companies operating, with a workforce of more than 30,000. This is followed by the IT sector,

In 2015, Jafza generated trade worth US$ 87.6 billion (AED 322 billion).

Below are the largest trade partners with Jafza.

Country

Total (USD Billion)

China

12.67

Saudi Arabia

7.92

Vietnam

5.34

USA

4.14

Iran

3.84

India

3.28

Iraq

3.05

NOVEMBER 2016 43

AIRPORT REPORT - DUBAI AIRPORTS

Tra ffc

mo

e ev m

a h n e nt

GSC explores how the implementation of Approach Peak Offload has led to a boost in the air traffic movements capacity at Dubai Airports, and a reduction in fuel consumption

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ired of delays at the airport? Dubai Airports is ensuring delays are as minimal as possible. HH Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airports, President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates Group, Chairman of Dubai Air Navigation Services (dans), recently launched Approach Peak Offload (APO) – an innovative air traffic management procedure that has led to an increase in average air traffic movements _ from 33.2 to 34.8 - for arrivals during peak hours, as well as reduction of peak arrival delay by 40 per cent at Dubai International Airport (DXB).

H E Mohammed A Ahli, Director General of Dubai Civil Aviation Authority (DCAA) and CEO of Dubai Air Navigation Services (dans), stated,“Under the guidance, sponsorship and leadership of HH Sheikh Ahmed Bin Saeed Al Maktoum, we are committed to, and are continuously striving to ‘Transform the Sky’ through developing and launching several key air traffic movements capacity enhancement projects in the Emirate of Dubai.”

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m e nc

s t en

AIRPORT REPORT - DUBAI AIRPORTS

NOVEMBER 2016 45

AIRPORT REPORT - DUBAI AIRPORTS

This has also advanced solutions in the “Developing and Aviation community. The implementing innovative enabled dans to procedure is one of several procedures such as APO play a key role solutions implemented have enabled us to deliver by dans to drive further enhanced air traffic in enhancing the efficiency in the aviation management services, and sector, as it increases accommodate the rising overall traffic the volume of air traffic demand of our prestigious flow efficiency, movements, while reducing clientele with up to 86 per cent during peak hours. We while concurrently possible delay timings for airlines. have significantly invested playing an active Since its recent our resources in thoroughly implementation, the APO assessing the procedure from role in conserving procedure has reduced March 1st, 2016, and until the environment peak arrival delay for Dubai its implementation in live arrivals, which resonates in operations through fast time the effective reduction of and real time simulation fuel consumption, and adds to cost savings exercises. This, in turn, has reinforced our for the airlines. This has also enabled dans to efforts in building the safety case of the play a key role in enhancing the overall traffic procedure which has been approved for flow efficiency, while concurrently playing an implementation by the GCAA,”he added. active role in conserving the environment, Exclusively designed and developed by as the implementation of this procedure the experienced operations team in dans, enabled reduction of CO2 emissions by up to the APO procedure was created for Dubai’s 447 tons on monthly basis. operational environment, reflecting the most

46 NOVEMBER 2016

Dans is the Air Navigation Service Provider, which manages the Dubai and Northern Emirates airspace. dans also provides air navigation services for airport authorities and numerous prestigious airlines, including the World’s busiest airport in terms of international passenger numbers - Dubai International Airport (DXB).

The APO procedure is a concept that is based on the possible re-allocation of lighter wake producing category aircrafts to Runway 30R during arrivals peak periods, thus accommodating the arrival flow more efficiently, with the concurrent use of both runways at Dubai International Airport. One of the key components of this unique procedure permits lighter category aircraft to maintain a horizontal separation of 4.5NM behind the A380 Super aircraft while landing. Experts at dans reached the new levels between aircrafts based on the results of the safety case, which included an in depth quantitative and qualitative wake data analysis.

Trucks.MercedesBenzME.com

The Actros. Made for ME. Built in Germany. Home in the Middle East. The Mercedes-Benz Actros enjoys a reputation for supreme power, reliability and safety since many years – in the Middle East and all over the world. No wonder that the Actros is the first choice for everyone who wants to stay ahead of the competition. With an unreached level of quality, the Actros is the truck to trust, even after hundreds of thousands of kilometers in operation under the harshest and most challenging conditions.

Features like the automated Mercedes PowerShift gearbox and FleetBoard® telematics guarantee best fuel efficiency and uptime. Combined with the unmatched resale value of the Actros, low Total Cost of Ownership over the vehicle lifecycle is assured.

Find out more about “The Actros. Made for ME.” on our website or visit your nearest Mercedes-Benz Truck distributor.

“[The Actros] contributes to the achievement of our objectives through its outstanding performance, low cost of maintenance compared to other models, and lack of malfunctions (…).”

Mr. Farooq Al-Fakih Dep. General Manager, ALDREES Comp.

Fleet of 1,326 trucks, Saudi Arabia

MANAGEMENT

A step ahead Unilever is planning to create a Centre of excellence for supply chain. Tom Craig, President, Ltd Mangement, presents some important points to consider for this

U

nilever is recognised as having one of the best supply chains in the world, per Gartner. The company’s global scope and success validate this status. It infers a certain alignment of supply chain management (SCM) with the corporate strategy.

Taking this success a step further, Unilever is planning a Center of Excellence (CoE) for supply chain management. Setting up such a centre with a world-class supply chain programme would only be a continuation of their existing excellence in quality.

The CoE concept is still fluid – it can be designed, built, and operated as they believe would be most beneficial. To that extent, the following needs to be considered: What is the mission and purpose of the group and of each project they undertake?

What are the goals?

What value and benefits will it generate for both Unilever and for the supply chain group?

Will it focus on best practices, as is sometimes done with a CoE? Or will it go further and work to take supply chain management to a higher level?

These are perhaps the first questions that should be addressed, with answers that are clearly understood by everyone.

There is much complexity within the company-wide supply chain, which creates significant opportunities. There is also the potential of using supply chain management as part of a Unilever blue ocean strategy. This could address opportunities, such as B2B and B2C global ecommerce and multichannel sales. Elevated, integrated technology, and process and time compression are examples of sub-projects that would go with these.

Consider this: What is the structure?

Will it be a corporate effort that presents its work to others? Or will it be a collective, collaborative effort?

48 NOVEMBER 2016

It should ideally be a blended endeavour between corporate and regional Unilever teams. Depending on the project, there should be internal and external stakeholders and outsiders who can present objective comments to guide the effort. Blending is important for team involvement and for implementation--so that the work of the group is adopted throughout the company, and is not viewed as a dictate by an authoritative body.

Various online technologies and collaborative tools should enable this approach. Depending on the respective projects, the leader of the particular work could rotate through key parts of the supply chain organisation, both corporate and regional. The size of a team should not be so large as to make it important for the work and decision-making required.

And finally: Where should it start?

How does it identify and select projects?

Various groups within the company likely have their own ideas of what projects the CoE should work on. Another approach is to do a holistic analysis of the global supply chain.

Core components to the assessment are — Process Technology Organisation Product flows Information flow Best practices Key performance measures Capacity, utilisation, and scalability of supply chain Financial flow Cost The results should be used to guide possible projects. Project results and performance are important to validating and increasing support for the centre of excellence.

MANAGEMENT

NOVEMBER 2016 49

REVERSE LOGISTICS

customers to return to any physical location, regardless of where they made a purchase, is convenient, as is offering ship-to-store.

Save the sale

6 keys to an effective returns programme

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he modern consumer doesn’t have to go anywhere to buy your product.

Technology enables people to be shoppers - and informed ones at that - anywhere there’s a connection to the net. This has fundamentally altered how point-of-sale business is done. As e-commerce has exploded, the process of returning merchandise has also been changed for good. Having an effective online returns program is vital for any business today that wants to maintain superior customer service and operational efficiency.

Clarity is key

strategies that can simplify

You must make all aspects of your returns policy as clear as possible. First, your return policy and instructions must be very easily accessible on your website and app, and written with the utmost clarity. Is there a prepaid return label included in the shipment of the goods? If not, make it easy for the customer to print one by making it accessible from your returns screen. Tell your customer exactly how long it will take to get the refund, and don’t miss that deadline.

your returns process,

Provide options

What best practices should you incorporate into your reverse logistics program?

UPS outlines these

save revenue and improve customer satisfaction 50 NOVEMBER 2016

No one likes to return merchandise, but you can make it easier on your customers by providing multiple options for your customers to return merchandise. Allowing

Work with your customer to understand why they’re making the return. Often times, especially in personto-person interactions, you’ll be able to prevent the return in the first place— or at least make a good impression. Perhaps the customer will go through with the return, but a pleasant experience will help drive loyalty, which will result in future sales.

Preserve the value If your customer follows your return instructions correctly, you will get your merchandise back, but that’s not enough.

You want to make sure that the value of it has been preserved. Having an efficient, careful back-to-inventory process will help get the product back out onto the shelf for the next customer. Delays in processing the merchandise’s journey back into inventory may result in a missed sale. And a damaged or broken item is no good for anyone.

Quick refunds Refunds on credit and debit purchases are never going to be immediate, but processing online returns quickly increases the likelihood that you’ll be able to make another sale to that same customer. A faster refund may even lead to a bigger sale than the first transaction.

Integrate technology Your entire returns process must be in line with the technological expectations of the modern consumer. Provide tracking numbers that are easy to input on any device, so that a customer can stay in the loop no matter where they are.

-www.supplychainbrain.com

GUEST COLUMN

Adapting to the

‘new normal’ In this exclusive column, Mustapha Kawam, President and CEO, Globe Express Services, writes about the changing face of supply chain management in the 21st century

A

players must bear in mong numerous mind that their methods game-changing, that have worked in the influential past might not be as factors, key effective now. They will macro-economic need to seek solutions transitions and shifts in trade to address the future patterns have the most dramatic requirements of growing effects on the overall global cities and booming supply chain process. World populations with highexports, accounting for a high disposable incomes. percentage of global gross Exports, for one, are domestic product (GDP) and no longer among the rising international capital flows main industry growth between countries, for instance, drivers. Infrastructure are helping set the pace in the Mustapha Kawam is becoming a major logistics industry. determinant for growth, with urbanisation At home, the landscape is no different. to cities where robust economic activities By the year 2030, the GCC is expected to are mostly centred. There is also the need be ranked alongside the world’s busiest for supply chain players to be highly flexible trade lanes, thus opening up major logistics to meet consumer requirements at multiple opportunities and profitable supply chain locations, with multiple transport modes, prospects. Take, for example, the UAE’s case, at different times. Another major feature with the government’s focused economic of a flexible supply chain is its ability to diversification plans further driving growth easily adapt to unexpected changes and across industries, including, if not most circumstances. especially, the supply chain industry.

Logistics solution providers must also Times, however, have changed in recent think ‘international’, widening their scope to years. New unavoidable trends, such as include global, mature and emerging markets next-generation technologies, have been into their overall business growth strategy. To introduced to the regional and global save on costs, secure speed, and reduce the markets, and it bodes well for the entire risk of delays, alternative transport modes regional logistics industry to pay attention to and routes are required as well to support the these transformative developments. Logistics

52 NOVEMBER 2016

continuing trend of outsourcing of logistics services. Manufacturing is being brought closer to the end users amidst rising labour and transportation costs. Multi-channel sourcing is another key trend, given that end consumers increasingly source via a wide range of multiple channels, ranging from brick and mortar shops to e-commerce.

Like in other industries, technology has the most disruptive effect on logistics. Cutting-

GUEST COLUMN

edge tools and advanced solutions are essential to support the increasing complexity and dynamism of today’s modern supply chains. Artificial intelligence (AI), an exciting field in robotics, is proving to be an emerging trend that is expected to reshape the industry.

AI is predicted to play a major role in the supply chain process in the years to come.

For example, machines could replace humans in picking up goods and loading

them onto self-driven vehicles. The advent of such sophisticated technology will definitely change the way in which supply chain managers perform their roles, which will increasingly have a strategic technological focus.

Green logistics, and an increased focus on sustainability, are also expected to redefine supply chain activities in the near future, especially as customers are choosing socially

responsible companies as a response to an increased awareness on environmental preservation.

Freight forwarders must do their utmost best to adjust and familiarise with the advancements in supply chain management.

With significant changes in regional and global logistics markets, staying up-to-date on the latest trends is more important than ever before.

NOVEMBER 2016 53

WOMEN IN BUSINESS

O

n October 19th and 20th, in a landmark move, the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women) officially adopted the ‘Sharjah Declaration’, with the aim to strengthen the resilience of women and girls in the Arab region. The announcement was made at the closing session of the Investing in the Future Conference.

The ‘Sharjah Declaration’ has the blessings of His Highness Sheikh Dr Sultan bin Muhammad Al Qasimi, Supreme Council Member and Ruler of Sharjah, and his wife, Her Highness Sheikha Jawaher bint Mohammed Al Qasimi, Chairperson of The Big Heart Foundation (TBHF), Chairperson of NAMA Women Advancement Establishment.

The second Investing in the Future Conference, which took place on October 19 and 20, at Al Jawaher Reception and Convention Centre, and was held under the theme ‘Building the Resilience of Women and Girls in the Arab Region’, was organised

by TBHF and the Empowerment of Women (UN Women).

The closing ceremony was attended by Her Highness Sheikha Jawaher bint Mohammed Al Qasimi, wife of His Highness the Ruler of Sharjah, Chairperson of NAMA Women Advancement Establishment (NAMA); HE Sheikha Lubna Al Qasimi, Minister of State for Tolerance; Sheikh Salem Bin Abdul Rahman Al Qasimi, Chairman of the Ruler’s Office; international representatives from government and non-government organisations, decision-makers, academics, and field experts.

Dr Phumzile Mlambo-Ngcuka, United Nations Under-Secretary-General and Executive Director of UN Women, commended the efforts of conference partners and the hospitality of Sharjah.

She stressed the importance of continuing to build partnerships and alliances among governments, international organisations, civil society organisations, and youth groups to change negative gender stereotypes, and to protect women from the threats of armed conflicts, humanitarian crises, and the waves

54 NOVEMBER 2016

Addressing an important

demographic

WOMEN IN BUSINESS

HH Sheikha Jawaher Al Qasimi during the closing ceremony of IIFMENA

The recently-held Investing in the Future Conference saw many significant resolutions and discussions, which aim to strengthen the resilience of women and girls in the Arab region

of extremism ripping through the region.

Focus should also be given to women’s economic empowerment as a mean to fight poverty, and to engaging men and boys in the struggle for gender equality in the region.

“These topics are at the heart of the Sustainable Development Goals, and of achieving a true Planet 50-50 by 2030,” said Dr Mlambo-Ngcuka in her closing remarks, adding,“The energy of the men and women during these past two days has been significant and palpable.”

Mohammad Naciri, UN Women Regional Director for Arab States, delivered the Sharjah Declaration for the Rights and Empowerment of Women and Girls, which reads as follows: Representatives of states, governments, international organisations, and civil society institutions met in October 2016 in Sharjah, UAE, to discuss the resilience of women and girls in the Arab region. The principles established at the meeting took the form of the following: Participants recognise that it is not possible to build sus/tainable peace based on marginalisation, exclusion, and inequality, noting that women have a catalytic role as agents of change, and as leaders in reconciliation, peace-building, and countering violent extremism.

They recognised the need to engage men and boys to challenge the structures, beliefs, practices, and institutions that sustain men’s privileges, as well as the need to address inequalities between women/girls and men/boys.

Participants also recognise the positive potential of young people, both male and female, in promoting peace and security, emphasising that the adoption of the sustainable development agenda, with its dedicated goal on gender equality and the mainstreaming of gender equality across all 17 goals, demonstrates that development, human rights, peace, and security are interdependent.

They reiterated that civil society, including women´s organisations, plays a vital role in the sustainable and peaceful development of a community and country, and should be engaged in the decision-making process at all levels.

Participating experts called for the mainstreaming of gender in all plans, policies, and programmes, which are aimed

NOVEMBER 2016 55

WOMEN IN BUSINESS

Most principles stipulated in the Sharjah Declaration focus on the involvement of women and girls in promotion of peace and achieving stability, which is an extremely important issue amid the difficult conditions experienced by many countries in the region at empowering, protecting and supporting refugees and internally displaced people (IDPs); the pursuing of practical, targeted actions that address the needs and rights of women and girls, and the engagement of men and boys as partners for gender equality.

The experts acknowledged the findings of the Global Study on Women, Peace, and Security, which reported that the chance of a peace agreement lasting 15 years increases by as much as 35 per cent when women participate in the negotiations.

Recalling the commitments made by Arab Member States in the Cairo Declaration for Arab Women and the Strategic Plan for Women Empowerment, as well as the 2030 Sustainable Development Agenda, which call for gender equality in all areas of public and private life, and a commitment to achieving the Sustainable Development Goals, the participants called on member states to create national mechanisms and develop national action plans to guarantee implementation of the Regional Strategy and Executive Action Plan on ‘Protection of Arab Women: Peace and Security’.

They call upon member states to intensify co-operation with religious institutions to ensure women’s rights within Islam, as well as women’s rights in other religions practiced in the MENA region; to protect women and girls from all forms of violence, particularly during wars and conflicts; to promote religious discourse that creates awareness; to ensure that women’s rights are protected in

56 NOVEMBER 2016

Sheikha Lubna Al Qasimi during her speech

the family and society, and to actively work toward a culture of peace and security.

The participants noted that extreme poverty and hunger could be eliminated by 2030 if between 9.5 and 13 per cent of global military spending was channelled to improve agriculture and rural infrastructure in impoverished communities.

They indicated that women and girls need to be included and specifically targeted in planning for economic recovery and resilience, with special consideration given to their needs regarding education, livelihoods, skills development, employment, and access to resources, particularly for female-headed households, and considering socio-economic restrictions placed on women and girls.

Participants emphasised the important role of women as agents of economic stabilisation

and growth, and that economic outcomes are more likely to be inclusive when women are involved. They reaffirmed that ‘no action is not an option’, and that it takes governments, businesses, development partners, men, women, and all relevant participants to work in a coordinated and sustained partnership framework to realise inclusive and equitable peace and stability.

While stressing that data show a persistent underinvestment in gender equality and women’s empowerment in humanitarian assistance, the participants called on all donors to invest in women´s empowerment and leadership, particularly in relation to development and emergencies.

HH Sheikha Jawaher Al Qasimi: Women’s involvement is a guarantee for sustainable development and prosperity

WOMEN IN BUSINESS

Dr Phumzile Mlambo-Ngcuka during her speech

Her Highness Sheikha Jawaher Al Qasimi lauded efforts by representatives from government and non-government organisations, as well as representatives from UN organisations and civil bodies who contributed to drafting the Sharjah Declaration, which aims to strengthen the resilience of women and girls in the Arab region.

She expressed her deepest thanks to all those who contributed to enriching the conference and its sessions with their ideas and opinions, which demonstrated their moral commitment and humanitarian interest in empowering women in the region and the world.

Said Sheikha Jawaher,“Most principles stipulated in the Sharjah Declaration focus on the involvement of women and girls in promotion of peace and achieving stability, which is an extremely important issue amid the difficult conditions experienced by many countries in the region. This is because the lack of security threatens women’s mental and physical integrity, and hinders them from becoming an active agent designing the future, ensuring sustainable development and prosperity.”

Sheikha Jawaher underlined the need to empower women economically and

58 NOVEMBER 2016

Mohammad Naciri, UN Women Regional Director for Arab States during his speech

facilitate the process of granting them the necessary finance to launch projects, the right to participate in government tenders and procurement, and provide the skills to maximise their contributions in various economic activities.

She also called for the collection and analysis of data and statistical indicators on women’s participation in economic development in the Middle East, to promote women’s roles in business sectors.

Her Highness acknowledged that the protection of women’s rights, building capacity, developing skills, and offering equal job opportunities, must be at the forefront of empowerment programmes implemented by government bodies and civil society organisations, to encourage women and girls to engage in public life.

HE Sheikha Lubna Al Qasimi: Government laws provide effective and official support for women In her keynote address during the ceremony, Sheikha Lubna said:“The natural equality between women and men is obvious.

Both are human beings in the end, and they need to support each other. Therefore, they must be equal in life opportunities and aspirations for a better future. We must concentrate our effort to promote gender

integration to maintain human stability and cope with the inevitable changes and developments that come with time.”

Sheikha Lubna, Minister of State for Tolerance, said that the UAE has come far in empowering women, quoting His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE:“We have moved beyond the phase of empowering women. Indeed, we are empowering society through women. This is reflected in the constant and consistent achievements made by the nation’s women.

The UAE ranks first globally for treating women with respect, according to the World Economic Forum Report 2013, and also leads the Middle East and North Africa in terms of gender equality. A perfect illustration of the empowerment and social confidence in women and girls of all ages is the success of a number of Emirati girls who recently managed to conquer Everest Summit,”she said.

Sheikha Lubna underlined that the UAE’s focus on supporting women is not limited to the local arena, as the UAE is also keen, under the guidance of its wise leadership, to help other countries promote gender equality. The UAE is actively involved in undertaking several mandates relating to women’s rights through the United Nations

WOMEN IN BUSINESS

women entrepreneurs is a pillar to spur economic growth, since women’s entrepreneurial potential and capabilities have not yet been fully utilised. Women entrepreneurs can play a prominent role in leading the economy, and in doing so, create jobs for themselves and others. This is why we should increase women’s abilities to participate in the workforce, and strengthen their participation in entrepreneurial activities.”

She went on to say that creative initiatives and programmes should be launched to support women’s entrepreneurship.“Efforts must also be made to improve these targeted efforts through collecting more consistent data for the study of women’s employment and entrepreneurship that can Gender equality, be run from home,”she concluded. equal opportunities Ahmed Abou El Gheit: Enas Makkawi, Director of Women, Family and Children’s for women and girls Gender equality is the Department at the Arab League during her speech only way to achieve to have access to comprehensive economic education, healthcare, development should support women’s and other international organisations. This Ambassador Ensa entrepreneurship is reflected in the steady increase in Emirati decent employment, Makkawi, Manager of the at a government women’s contributions to various positions political participation, Directorate of Women, level in its quest to of responsibility in the business sector and Family and Childhood at consolidate the culture charitable societies, as well as in various and economic the Arab League, said in a and attractiveness professions and posts across the country. speech delivered on behalf of entrepreneurship “Emirati women enjoy more than mere empowerment is the of Ahmed Abou El Gheit, among female Emiratis. encouragement, because government only way to achieve Secretary General of the HE stressed that legislation and laws provide a broad scope of Arab League,“We highly official and tangible support for women. This is the UAE encourages comprehensive appreciate the unwavering well illustrated by the Cabinet ruling four years women’s participation in economic development efforts made by Sheikha economic development, ago, that all boards of directors of companies Jawaher bint Mohammed and government entities must include women, and major efforts have Al Qasimi through the Big been made to inspire making the UAE only the second country women entrepreneurs. Sheikha Lubna added Heart Foundation to support women’s issues after Norway that makes the representation of that there are further steps needed to address on national and regional levels. This has women on boards mandatory.” culminated in launching the NAMA Women certain factors, which may alienate women Add Sheikha Lubna,“This ambitious Advancement Establishment to grant women from running or developing their own approach is enhanced by the eagerness of their full political, economic and social rights enterprises.

Emirati women to gain more knowledge, be as key partners in community development.

She called for establishing platforms for more creative, and further develop their skills.

We also appreciate the valuable efforts women to communicate and exchange We see this through the growing interest in undertaken by UN Women on a regional ideas, a move that will not only stimulate using the latest communication and learning level to protect women and girls and advance creativity, but will also give women a sense technology, and the enthusiasm of many their positions.” younger women and girls to take on scientific of support and self-confidence, enabling Makkawi added:“Arab women’s issues have them to better prepare and succeed. Women research and innovation.” always been a priority on the agenda of Arab can achieve great success in networking and She referred to a UN study that shows League meetings. The Arab League has always cooperation with other women owners of the UAE among top countries in women’s sought to promote the role of women and girls small enterprises, and help them establish empowerment, with Emirati women in Arab societies, stemming from its belief that representing 60 per cent of the total national other projects within their community. women are the backbone of progress, security, Continued Sheikha Lubna,“Supporting workforce. She emphasised that the nation

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and peace in societies. Gender equality, equal opportunities for women and girls to have access to education, healthcare, decent employment, political participation, and economic empowerment is the only way to achieve comprehensive economic development.”

The ArAb LeAgue pLAns To hoLd An InTernATIonAL ConferenCe In JAnuAry 2017, In ConJunCTIon wITh un women, AL AzhAr AL shArIf, And The unITed nATIons speCIAL represenTATIve of The seCreTAry-generAL on sexuAL vIoLenCe In ConfLICT, To Address ALL forms of vIoLenCe And exTremIsm In The regIon. The event will involve religious institutions, and regional and international organisations concerned with human rights, in activating of the memorandum of understanding signed in March 2015, by the Arab League with the Office UN Special Representative of the Secretary-General on Sexual Violence in Conflict.

She added:“The current situation in the Arab region requires developing new methods to deal with issues of peace and security in the region, and to strengthen mechanisms to stop violence through mediation, peacekeeping control, and much more.” She highlighted the important role of teaching and educating new generations, and promoting the concept of human rights, without overlooking the essential and effective role that women can play in building sustainable peace in Arab communities.

Makkawi concluded by saying:“ We have to work together to address all threats and risks facing the security and safety of women and girls, and develop the means to combat terrorism in all its forms, and bring peace and security in the region. We need to promote the values of true Islam and fight the culture of extremism that sparks such hatred.

We must advance our Arab communities and maintain their cohesion and stability, with an emphasis on the importance of women’s participation in peacebuilding, and the promotion of dialogue as a method to resolve conflicts. Equality and development cannot be achieved if there is no security and stability.”

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Female assertiveness highlighted as an integral factor in women’s empowerment The importance of female assertiveness in women’s empowerment was a key theme in the IIFMENA conference. Titled ‘Strategic Partnerships for Economic Development’, the discussion explored the initiatives and actions needed to develop women’s capabilities, with the panelists highlighting issues that included training women to have a strong voice in the workplace, as well as in other areas of their lives. The session, which took place on the final day of the two-day forum, was moderated by Mohammed Naciri, UN Women Regional Director.

Discussing how assertiveness helps women with their career prospects, Roshaneh Zafar, Kashf Founder and Managing Director, Kashf Foundation, highlighted a study from Stanford University that found that women were one-and-a-half times more likely to receive a promotion if they were regarded as having assertive traits. She outlined how her organisation in Pakistan was encouraging women who had recently married to stand up to their family, as it was often their in-laws that were behind the decision for her not to remain at work.

“We found that more often than not it is the in-laws who persuade recently married women to stop working, so we started an initiative titled ‘Not without my mother-in-law’, which aims to reassure a working woman’s in-laws that their new daughter will be safe from any harm if they stay at work. We invite them all in for a friendly chat, and help them to realise that now that the young woman is a part of their family, there should be no reason for her to stop working if she doesn’t want to,” she said.

Also commenting from a Pakistan perspective on the importance of generating female assertiveness was Kaiser Naseem, Regional Head of Bank Advisory Services, IFC. He explained how increasing women’s capacity in this regard was not only a CSR initiative, but one that also has a strong financial incentive.

“We encourage women to be assertive through our entrepreneurship schemes, and we also work with commercial banks to provide services to women. Less than five per cent of women in Pakistan have access

to banking services, but when they do, they prove to be much more loyal customers than men. We run a ‘gender sensitivity’ programme that helps banks sell their services to women. One bank, HBL, had an increase of deposits in women’s accounts from 10 million (AED 350520) to 50 million rupees (AED 1752601) in the space of one year after starting the programme,” he said.

Citing how women can take a lead in the revolution that sees more and more people working away from the office environment, Fadi Ghadour, Chairman and CEO, Wanada Capital, said, “About 25 per cent of the working population today does not go to the office to work. We need to be able to bring work to women and take advantage of their skills to close the knowledge gap. We live in a digital world where we are all connected – physical attendance at an office is no longer a requirement to be an effective worker. We need to think innovatively and use technology.”

Finally, effective child care and baby-friendly workplaces were brought up as being important considerations for women’s empowerment.

Speaking about her own experiences as a new mother, Noura Salim, Social Development Executive Director, said that she was now more acutely aware of the need for facilities that accommodate recent mums.

“I am breastfeeding, and am fortunate to be in senior management with my own office. This is important as I can express in privacy when I am at work. However, many new mothers are not in the same position as me, and it has made me realise that there is a real need for such areas for mothers in every workplace,” she said.

Her sentiments were echoed by Beatrice Cernuta, Director of Strategy and Operations, at Tarbi. “Where legislation is not in place to support women workers experiencing maternity, then the workplace needs to step in. This is what is happening in the United States. It is one of the few countries in the world that doesn’t offer paid maternity and paternity leave, but we see that employers are filling this gap. This is what is needed to encourage women to continue pursuing their careers,” she said.