Global Supply Chain April 2016 Issue

April 2016 Issue 25

ENHANCING THE BUSINESS OF LOGISTICS

MAN ENOUGH! MAN Trucks and Bus on the regional transportation industry

DHL Best place to work!

Oman’s Dry bulk logistics corridor

Project Falcon ENOC fuels progress

                                                                                                                                                        

The status of regional commercial transport 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 Directors: Deepak Chandiramani Deepak@signaturemediame.com 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.

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

Our cover feature is a detailed chat with Franz Freiherr von Redwitz, Managing Director, MAN Truck & Bus Middle East and Africa FZE about all aspects of the regional transport industry from falling oil prices to safety, technology, staying ahead of the competition and the future - 3D printing of spares and other parts. Since the construction industry, which is one of the mainstays of the commercial vehicle industry has been severely affected by the low price of oil which has in turn affected demand for commercial vehicles and trucks. The transport sector, however, is doing well, and there is a big shift in terms of demand from construction to long haul vehicles. (Pg 24).

DHL Express UAE currently employs more than 1,000 certified specialists across a number of departments Operations, IT, HR, Finance, Commercial and Customer Service. Three years in a row, DHL Express has been officially recognised and awarded the ‘Top Company To Work For’ 2016 in the UAE by the Great Place to Work Institute. Anu Daga, Head of HR DHL Express UAE tells GSC that getting the right people on the DHL bus is instrumental to the company’s success. The selection process at DHL is thorough and transparent, and focusses on hiring the right “mindset and attitude”. They test for knowledge and skills, but experience has shown that the latter can be trained and developed to an extent, so the focus is on behaviours and competencies.“We seek employees who are able to demonstrate attributes that DHL believes are key to our success.”More on page 40.

All this and so many more trending topics inside. See you next month.

Munawar Shariff Managing Editor Signature Media munawar@signaturemediame.com

APRIL 2016 3

April 2016 Issue 25

ENHANCING THE BUSINESS OF LOGISTICS

24 06 News 32 The solution to water shortage?

16 Country report - Oman Crystal Lagoons develops Omani Ports - Enhancing multimodal links Omani Ports are also investing in establishing greater multi-modal links

18 Country report - Oman Omani logistics - creating new synergies Peter Young, Director, Oman Logistics Centre, speaks about the country’s plans and strategies

20 Country report - Oman Stability = growth Omans retail sector continues to experience stable growth

24 Cover MAN enough!

A look at the commercial vehicles industry in the region with MAN Trucks & Bus Middle East 4 APRIL 2016

technologies to produce water without using energy

34 3PLs and logistics

service providers - is the future changing?

Reverse outsourcing. Cutting out the middle man. Not using the usual suspects

40 DHL gets it right Three years in a row, DHL Express has been officially recognised and awarded the ‘Top Company To Work For’ 2016 in the UAE

46 Fuelling progress ENOC to commence construction of Project Falcon extension to Al Maktoum International Airport

58

48 Heading towards a bright future

Frost & Sullivan’s latest analysis reveals Oman’s logistics industry is to witness transformation

52 A connected GCC Faris Al Mazrouie, CEO, Etihad Rail, gives a few insights on the progress of the rail project

56 Oman’s dry bulk logistics corridor

SOHAR builds on existing infrastructure to boost mining and minerals sector in Oman

58 The pay packet for 2016 What can you expect this year? Will you get a pay raise, will you not?

2020 READY

We can help your business grow.

When it comes to integrated logistics solutions across the supply chain, you can trust Al-Futtaim Logistics to get your business moving ahead.

Automotive: Vehicles, Spare Parts, Machinery | Retail: Fashion, Footwear, Food, Electronics, High Tech, Furniture Engineering | Industrial | Project Cargo: Heavy Lift and Break Bulk | Humanitarian

P.O. Box 61450, Dubai, United Arab Emirates. Tel: +971 4 881 8288, Fax: +971 4 881 9157 e-mail: contact@aflogistics.com www.aflogistics.com

DP World at strategic investment summit in France DP World Group Chairman and CEO HE Sultan Ahmed bin Sulayem recently met the President of France, Francois Hollande, and senior government and business leaders at a major investment summit at the Élysée Palace in Paris.

France’s attractiveness as an investment location and DP World’s projects in the country were highlights of the discussions, which also covered infrastructure development, port centric development,

Abu Dhabi International Airport wins ‘Airport of the Year’ at the Air Transport News Awards 6 APRIL 2016

distribution and export hubs, rail freight, customs, and other logistics topics.

HE Bin Sulayem said, “France has many attributes, such as a skilled workforce, good infrastructure, proximity to the European hinterland, and a unique position with coastal access to the Atlantic Ocean, Mediterranean and North Sea. It was a privilege to highlight our operations there, and to provide our knowledge to this major economic

Abu Dhabi International Airport (AUH) has won ‘The Airport of the Year Award’ in the 10-30 million passengers category at the Air Transport News (ATN) Awards held in Salzburg, Austria.“Winning this award is a huge honour for Abu Dhabi Airports as it reflects a strong vote of confidence from our passengers who appreciate the high quality services that we provide. It takes a collaborative effort to win such an award, and it is down to the extraordinary hard work and commitment of all those involved in

power as it seeks to develop investment opportunities in the future.” DP World operates marine terminals in the ports of Le Havre and Fos, responsible for handling approximately 50 per cent of all of France’s container traffic.

Top: The President of France, Francois Hollande, HE Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World and senior government and business leaders at the investment summit.

running Abu Dhabi International Airport that we have received this recognition,” said H E Ali Majed Al Mansoori, Chairman of Abu Dhabi Airports.

Airports were judged on several criteria for the award category including: airline, service quality, passenger friendliness, innovation and entrepreneurship, financial performance, and corporate social responsibility. AUH was also awarded the ISO 22301 Management System Certificate for Business Continuity Management in February this year.

Wilhelmsen ships service warns of firefighting compliance

Andrew Sheriff

ENEC supports first Women In Nuclear Global Annual Conference in Middle East

New amendments to the safety of life at sea convention (SOLAS), which are now in force, have laid down extensive ground rules for firefighting on ships designed to carry containers on or above the weather deck and built on or after January 1st, 2016. Wilhelmsen Ships Service’s (WSS) Unitor lance and X-flow water monitor have been specifically designed to meet all the requirements of the new SOLAS rules.

“As container ships have increased in size, so too has the need for effective measures to ensure the safety of the crew and cargo when substantial numbers of containers are carried on deck,” says Andrew Sheriff, Business Manager, Safety, WSS, adding, “Given the sensitive cargos carried on many container ships, crew members need to be able to respond quickly and effectively in an emergency situation.”

SOLAS Regulation II-2/10.7.3 requires at least one water mist lance to be carried on the vessel. In addition, ships designed to carry five or more tiers of containers on or above the weather deck must carry mobile water monitors – the number needed depending on the breadth of the vessel. This regulation is for new

Under the Patronage of H H Sheikha Fatima bint Mubarak, Supreme Chairwoman of the Family Development Foundation, President of the General Women’s Union, Chairwoman of Motherhood and Childhood Supreme Council, ENEC has announced that Abu Dhabi will host

vessels delivered in 2016, but WSS also encourages owners to consider the package for existing vessels.

the 24th Global Annual Conference of the Women in Nuclear (WiN) organisation.

The event will mark the first Annual Conference of WiN in the Middle East, and is scheduled to take place in November 2016.

The WiN conference draws attendees from around the world, from a network of more than 25,000 members in more than 100 countries. Participants from the United Arab Emirates (UAE) include representatives from the Federal Authority of Nuclear Regulation, Khalifa University and Health Authority-Abu Dhabi, among others.

The role of women in nuclear energy has been recognised by the leadership of the UAE, through the Emirati Pioneers initiative. In its first edition, His Highness Sheikh Mohamed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai commemorated Amani Al Hosani as the first female Emirati nuclear engineer.

APRIL 2016 7

First Vehicles supplies new fleet of fuel-efficient buses to ONTC

In a first major win, First Vehicles, in partnership with the Al Izz Group, has struck a deal with Oman National Transport Company (ONTC) to supply 40 low-floor city buses along with an after sales-service to ONTC. First Vehicles will supply the popular and fuel-efficient VDL brand of buses to be operated as public city buses.

The popular VDL brand is one of the leading Western European manufactured bus brands. Specialising in public transport buses and high end luxury coaches, VDL is renowned for its quality, safety, durability, comfort, low fuel consumption and low maintenance costs.

Emirates SkyCargo tops Air Cargo Excellence Awards

Emirates SkyCargo has won top placing in the Air Cargo Excellence Awards 2016

8 APRIL 2016

Emirates SkyCargo has topped the industry with its win in the Air Cargo Excellence Awards, organised by Air Cargo World. The annual awards recognise the best air cargo companies and airports in the airfreight industry, and are based on the Air Cargo Excellence Survey, which was established in 2005.

Customers rate the finalists on several factors, including the quality of customer service, such as tracking of shipments and electronic air waybill (e-AWB) capabilities; performance, such as timeliness of delivery and space availability; and value, such as competitiveness of rates, route network and quality of special services. Emirates SkyCargo, which achieved the highest scores on these performance factors, was given the Diamond award, the top placing for the category of air carriers with over one million annual freight tonnes carried.

Qatar Airways Signs United for Wildlife transport industry declaration Qatar Airways has signed the United for Wildlife Transport Industry Declaration at Buckingham Palace in the presence of HRH The Duke of Cambridge and The Rt Hon the Lord Hague of Richmond.

Qatar Airways Chief Officer Cargo, Ulrich Ogiermann, attended the ceremony to sign the declaration, which focuses on the illegal trade in African elephants, rhinos, some big

cats, and pangolins that originates from and transits through East Africa.

“We are extremely proud to be part of this initiative that recognises the need to protect endangered species from illegal trade and transportation,” said Qatar Airways Group Chief Executive, His Excellency Akbar Al Baker, adding,“It is important that we work together as an industry to prevent violations of the regulations that have been put in place to safeguard these animals and to adopt a zero tolerance policy regarding illegal wildlife trade.

The United for Wildlife declaration, which is supported by the International Air Transport Association, commits the participating airlines to increase passenger, customer, client, and staff awareness about the nature, scale, and consequences of illegal wildlife trade. It will also develop mechanisms to enable the transport sector to receive and share timely information about the transport of suspected illegal wildlife and their products, including methods of transportation, key routes, ports and other locations.

Express and air cargo operations hit by Brussels terrorism Following the deadly terrorist attacks in Brussels, express and forwarding companies based at Zaventem airport, as well as those who make use of the transit hub, have put in to motion a number of contingency plans. The explosions occurred at 8.00 am, resulting in multiple deaths. The airport was closed on March 22nd, 2016, with passengers and staff being advised to avoid the area completely.

Flights and cargo operations at the airport have been suspended with a time for the resumption of operations as yet unknown. This has had an inevitable impact on the movement of freight across the region, particularly considering Zaventem’s role within European networks.

Source: www.ti-insight.com

APRIL 2016 9

Air Arabia takes off to Sarajevo

A senior Air Arabia delegation recently joined the carrier’s inaugural flight from Sharjah to Sarajevo as part of three-day programme to commemorate the start of flights to Bosnia and Herzegovina. The delegation was led by the Chairman of Air Arabia, H E Sheikh Abdullah Bin Mohamed Al Thani and other Royal, official and trade guests, who participated in a series of events, highlighting the importance of this new route to bilateral trade and tourism.

Flights to Sarajevo, the capital and largest city of Bosnia and Herzegovina, operate thrice weekly on Wednesdays, Fridays and Sundays, departing Sharjah International Airport at 08.15 am, arriving at Sarajevo International Airport at 12:20 pm. Air Arabia’s move to start direct flights to Sarajevo from its main hub in Sharjah is aligned with the carrier’s strategic expansion throughout Europe, and is a significant addition to its existing network from its main Sharjah hub.

Dubai Trade and Nakheel join forces to bring ‘Rosoom’ to customers

Eng. Mahmood Al Bastaki, CEO, Dubai Trade

10 APRIL 2016

As part of its commitment to Dubai’s smart city vision, Dubai Trade, the premier cross-border trade facilitator, has partnered with Nakheel to offer its Rosoom online payment services to the developer’s 45,000 customers. The partnership allows Nakheel customers to use Rosoom as a convenient, online payment system to pay service charges for owner associations, community management and club fees. Users will be able to pay online using international or domestic major credit cards such

as Master Card and Visa. With no fraud transactions, no major complaints from users and no downtime cases, ‘Rosoom’ has proven to be the most convenient, trustworthy and reliable system of its kind. Users can choose from a variety of payment options such as credit cards or direct debit by providing a link to the online internet portals of major banks.

Banks currently integrated with ‘Rosoom’ include Mashreq Bank, HSBC, Habib Bank, Emirates NBD, CBD, Dubai Islamic Bank, and Standard Chartered.

Nakheel CEO Sanjay Manchanda

From left to right: Etihad Airways’ Vice President – Financial Reporting, Shelley Cole; Chief Financial Officer, James Rigney; President and CEO, James Hogan; Chief People and Performance Officer, Ray Gammell and Vice President Emiratisation Strategy, Ali Al Shamsi take part in the ribbon cutting ceremony.

Etihad inaugurates revenue accounting centre in Al Ain

Amna Al Blooshi, GBSS Operations Manager, addresses guests at the official opening of the centre in Al Ain.

Etihad Airways has announced the official opening of its dedicated Revenue Accounting Centre of Excellence in Al Ain. The centre, known as Global Business Service Solutions (GBSS), aims to become a pioneer in revenue accounting, whilst creating long-term economic value for Al Ain and the emirate of Abu Dhabi. By leveraging the Emirati workforce, and in particular women, who make up more than 95 per cent of its employees, the centre is committed to supporting the development of Al Ain as a thriving regional business hub.

GBSS offers a range of competitively priced services and today provides Etihad Airways and its partner airlines, Air Serbia, Etihad Regional and Air Seychelles, with access to industry best practices and the latest airline developments to optimise results and redirect valuable internal resources. In addition, other partner airlines will also be supported in the coming months.

More than 300 Emiratis were hired during the first year of operation and more will be recruited as the centre grows. The centre places a strong focus on empowering women in Al Ain by providing a wide range of training and development opportunities in a number of specialised areas.

GBSS is committed to equipping its female employees with the skills they need to continue to play an integral role in the economic diversification of Al Ain.

James Hogan, President and CEO of Etihad Airways, meets GBSS employees during a tour of the new centre.

Etihad enhances maintenance efficiency and safety Etihad Airways Engineering has enhanced its aircraft maintenance capability with a new Automated Tool Control (ATC) system which provides engineers with greater tool access, handling and traceability, and eliminates the risk of tools being lost in critical aircraft systems during maintenance.

Connected by Wi-Fi to a central server, and capable of providing an audit trail of the last 15,000 transactions, the automated system tracks the tools that are selected and is immediately able to identify any broken, lost or unreturned tools.

The toolbox can’t be opened until the engineers scan their badge against the reader mounted on the front of the box. The badge identifies the engineer as an authorised user and the box unlocks. Using the built-in touchscreen, the engineer confirms their job task (work order / task number) and job location.

The new system was successful trialled at Abu Dhabi International Airport in November 2015, and was rolled out across all Etihad Airways Engineering maintenance bays in January.

Standing alongside the new Automated Tool boxes in the hangar are (left to right) Isam Fares, Manager GSE, Tooling and Stores, Michael Adams, VP MRO Services, and Reinhard Luksch, Head of Logistics and Operations at Etihad Airways Engineering.

An aircraft engineer accessing the new Automated Tool System in front of an Etihad Airways’ A330 aircraft undergoing routine maintenance.

APRIL 2016 11

RAKIA opens doors to media companies Alnatura opts for CycloneCarrier warehouse shuttle system from Swisslog

12 APRIL 2016

Ras Al Khaimah Investment Authority (RAKIA) now welcomes media companies and professionals to establish their media related companies in Ras Al Khaimah’s competitive landscape. In support of this step, RAKIA signed a Memorandum of Understanding (MoU) with the National Media Council (NMC) to support the issuance of media licences.

Activities that can be carried out with media licences include TV and radio broadcasting, publishing, advertising, communications, media monitoring and services, production and film support, music, entertainment, and events management amongst many more. In addition to media licences, RAKIA offers industrial, commercial, trading, and consultancy/services licences under free zone and non-free zone jurisdictions.

Less than two years after commissioning a fully automated high bay warehouse at its Lorsch location in southern Hesse state, Alnatura plans to implement the innovative and highly dynamic CycloneCarrier warehouse shuttle system in its distribution centre.

For this, the German organic foods supermarket chain will continue to rely on the expertise and technical capabilities of warehouse automation expert Swisslog. The system is expected to go into operation in early 2017.

Alnatura continues to experience strong growth. Knowing that costefficient and effective logistics processes are needed to keep pace with the ongoing expansion of the network of distributors and stores supplied by Alnatura, the company has decided to implement Swisslog’s new CycloneCarrier small-parts warehouse shuttle system. The goal of this project is to centralise the supply structure for delivering low-volume drugstore items to Alnatura’s more than 100 stores.

Aeros granted utility patent for cargo airships aerostructure Renault Trucks K Range

Renault Trucks C Range

Renault Trucks strengthens its optimised transport solutions in the Middle East Renault Trucks Middle East has strengthened its range of financing solutions, aftersales support services, and pioneering transport solutions for all customers throughout the Middle East. The optimised solutions offered by the French manufacturer will help increase productivity, truck efficiency and decrease the overall cost of truck ownership for fleet managers.

Following the launch of three new state-of-the-art models in November 2014, Renault Trucks Middle East has streamlined its transport solutions offering in order to provide regional customers with the best-in-class maintenance packages.

These solutions provide the latest in product technology and enhanced efficiency, which allows customers to

increase uptime, improve service and maintenance, reducing the total cost of ownership.

The latest in Renault Trucks’ innovative offerings is ‘Infomax,’ the all-round business support solution.

This single, cost-effective programme allows fleet managers to follow and analyse the efficiency of their entire fleet, while also educating drivers on the impact of fuel consumption by means of graphics and tables with indicators, encouraging them to drive economically. Managing this type of vehicle information, together with the fuel-efficient design of the Renault Trucks’ range, will deliver real cost savings that reduce the overall cost of ownership and boost bottom line profitability.

Aeroscraft Corporation (Aeros) has announced that the United States Patent and Trademark Office (USPTO) has granted Aeros U S patent number (U S Pat No. 9,266,597) for an important sub-system, empowering the innovative Aeroscraft cargo airship. The Utility Patent covers the multi-functional ‘Aerostructure for Rigid Body Airship,’ or ‘Aeroshell’, which defines the outer shape of the lighter-than-air (LTA) vehicle, while serving structural and operational functions as a unique internal truss system.

The Aeroscraft’s patented Aeroshell provides the major external frame of the vehicle, and includes three main structural features: a rigid internal main frame, which carries all primary moment and shear loads induced, the vehicle’s skin (or envelope), which forms a semi-rigid membrane, and a rigid Aeroshell frame interposed between the main frame and the skin. The internal main frame serves as the main load supporting structure of the vehicle, and is structurally capable of handling bending moment.

The lightweight rigid structural Aeroshell design provides aerodynamic stability while increasing the aerodynamic lift compared with the cigar shaped hulls of earlier zeppelins, increasing payload accommodation, airspeed and maneuverability, particularly in high wind conditions.

APRIL 2016 13

Plans for Al Maktoum International Airport Passenger Terminal Building expansion

Sheikh Ahmed Bin Saeed Al Maktoum signs agreement with Al Jaber LEGT Engineering and Contracting for Airport Expansion

14 APRIL 2016

His Highness Sheikh Ahmed Bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority, Chairman and Chief Executive, Emirates Airline and Group, and Chairman, Dubai Aviation City Corporation, signed a contracting agreement with Al Jaber LEGT Engineering and Contracting LLC [ALEC], paving the way for the Passenger Terminal Building expansion at Al Maktoum International Airport.

Under the agreement, the first phase of this project, which increases the built up area of the Passenger Terminal Building from the existing 66,107 sq metres to 145,926 sq metres, will be completed by June 2017. It is expected that following additional planned extensions, the airport will handle up to 26.5 million passengers per year by 2025.

Al Maktoum International Airport will ultimately have the capacity to handle over 220 million passengers per year.

As part of the proposed expansion work of the passenger terminal, the arrival building, which houses the public hall for arrivals, the baggage claim area and related services, as well as the arrival Baggage Handling System, will feature a new immigration hall for 55 control counters, visa and passenger utilities. The departure building will see the expansion of the public hall, commercial areas and offices, as well as the check-in hall, which will house 64 check-in counters. An additional 10 counters will be specifically dedicated to business check-in. Expansions will also include 12 new boarding lounges and the extension of the emigration transfer and security area. A new baggage screening area for arrivals will be added, while the current baggage reclaim area will see three new carousels.

The MAN TGS – safe and efficient transport.

The high-torque Common Rail engines from MAN combined with the MAN TipMatic® automated manual gear shift system provide the driving force. TGS with its high payload ability, fuel efficient operation and unique ergonomics focused on driver performance and comfort combined with the optional intelligent assistance systems is setting the new standard for long-distance transport vehicles. The MAN TGS delivers your freight on-time, safely and efficiently every time, the Lion is guarding your load.

Discover the efficient MAN TGS: man-middleeast.com

Omani Ports Enhancing multi-modal links

ing cess of add ro p e th in re city to the a C states a p C a c G r , e s rt in o ta p on y re Us) of new c esting in establishing cent industr E re (T s to it n g u in t rd n inv ale Acco ty-foot equiv s. Omani Ports are also n e tw ies m 7 1 some r trade facilit rt facilitie e o tt p e b ’s d la n u a s in s Arabian Pen greater multi-modal link

W

hile some of this will go towards meeting domestic demand, there is also significant regional competition.

Yet this logistics race comes at a time of unprecedented consolidation in global shipping. Major players in the container industry are forming“super alliances”, and pooling their container traffic on ever-larger vessels, which make fewer calls. The result is a global decline in trans-shipment, with even established ports such as Hong Kong seeing rapidly falling TEU volumes.

New model Oman’s ports are increasingly turning to a new model to drive growth in the logistics sector. Rather than trans-shipment, improved trade facilitation and better access to onward land and air routes are seen as the key to future success. David Gledhill, CEO of the Port of Salalah, has seen container volumes fall three per cent in 2014, and saw throughput in 2015 to fall still further, just topping 2m boxes.

However, general cargo rose by 30 per cent from 7.94m tonnes in 2013 to 10.31m in 2014. The opposing trends lead Gledhill to conclude that Salalah’s future lies in better exploiting its potential as an import/ export centre.“Salalah Port has mainly been about trans-shipment, which is in decline globally,” Gledhill told OBG.“To replace that we need to refocus on the import/ export market, which requires connectivity.”

Connectivity can mean a number of things. In terms of physical connectivity, Gledhill can already see a number of easy wins for the port, particularly in rail links.

16 APRIL 2016

“Salalah offers Oman Rail one of the few opportunities in the Gulf to build a railway from scratch that will be viable from day one,” he said.“Currently, we’re sending two hundred trucks a day up and down the mountain fetching limestone and gypsum. There is huge demand in India for this product, and the quality in Oman is very high. We are exporting a million tonnes a month.”

While often built to serve a particular purpose, multi-modal links such as rail also tend to bring additional benefits. The economic rationale for the 93-km rail link from Salalah to Thumrait resulted in a lot of interest from international companies when the tender was floated in June 2015. However, as Gledhill points out,“Once you pass the mountains to Thumrait, it is cheap to keep going. It’s flat land to the rest of the country.”

Port Connectivity Another segment where improved connectivity could bring benefits lies in better links between Oman’s own ports.

Tarik Al Junaidi, acting CEO of Oman Shipping Company, is hoping to establish a feeder line that will link Salalah with Duqm in the centre of the country and Sohar in the north.“We are currently in talks to run a line, starting with a single multi-purpose vessel with a capacity of 350 containers, or 8000 tonnes,”he told OBG.“As it stands, we are not very integrated into the internal logistics market, owing to the fact that we grew out of export-focused liquefied natural gas shipping. There should be better integration, though, as there is a great deal of potential here that could be tapped.”

-www.oxfordbusinessgroup.com

COUNTRY REPORT - OMAN

Port Sultan Qaboos cruise terminal in Muttrah, Muscat, Sultanate of Oman

APRIL 2016 17

Omani logistics creating new synergies

the eaks about p s , e tr n e C istics and Logistics g n lo a r m e O th o r, o to , Direc ng a sm ompliance c e Peter Young and strategies in creati th d e e n ns riorities country’s pla nt within. Synergising p vate sectors nme ent and pri m rn trade enviro e v o g of both

W

hat role is the private sector expected to play in the Logistics Vision 2040, and how is the government developing strategies to encourage this?

Peter Young: The private sector’s role is critical to the success of the Oman logistics strategy. The strategy itself was developed by a group of some 65 individuals from both the private and public sector. The government’s role is to act as a key enabler by improving the delivery of government services, particularly in the area of trade facilitation. The involvement of the private sector at every level is critical and will ultimately determine the success of the strategy.

Whatever improvements a government makes, whether it is in increasing the ease of doing business, building the physical infrastructure, or facilitating training programmes, it is the private sector that will benefit and create economic growth and employment for the country as a whole.

It is therefore simply not possible to have a meaningful strategy that does not include the private sector. If the government wants to raise standards in logistics, say in training or the adoption of technology, it must initiate programmes with a focus on targeted investment and develop legislation that will be adopted by the industry.

18 APRIL 2016

The private sector also has to invest its capital, resources and manpower to support the government in getting these measures adopted across the country and the industry.

How is the Customs environment being streamlined, and what can be done to ensure that import/export procedures are more efficient?

Young: There are considerable efforts being made in this area, and Oman Customs is making major progress.

However, trade facilitation is not confined to Customs, but requires the active participation of a great number of government entities, some of which are sometimes unaware of the impact that they can have. This is why the trade facilitation program is a top priority. It involves streamlining and automating all of the processes and procedures which impact the transport and logistics industries. At present seven ministries have been prioritised, and they are working hard against tight deadlines to ensure that Oman quickly becomes one of the most logistics-friendly countries in the region. As a first step, the Oman logistics centre has catalogued approximately 3000 governmentto-business processes, 250 of which directly impact the movement of cargo.

The challenge is to systematically review and streamline each of these processes across the various ministries and to stop more being added. The

government determined that there should be only one approval required for any government service, that it should not be necessary to visit a government office to receive the service and that payments should be electronic. It is also important to review how initiatives implemented by government impact the private sector. For example, a new government computer system, while streamlining the process for a government department, may also add additional layers of work for the private sector.

This simply reinforces the role of the private sector in the implementation of the logistics strategy.

In what ways is the government working with educational and vocational institutions to offer opportunities in logistics for young Omanis?

Young: The modern concept of logistics is fairly new to Oman. The transport and logistics sector is not seen as a natural career choice. Part of the strategy seeks to address this, not only by creating an awareness of the opportunities, but also ensuring that the necessary vocational and higher education programmes are in place and that they match the requirements of the industry. It is equally important that processes are consistent and conform to the best international standards.

-www.oxfordbusinessgroup.com

COUNTRY REPORT - OMAN

APRIL 2016 19

COUNTRY REPORT - OMAN

Stability = growth

tic ped domes lo e v e d s s le da retail sector patterns an i r n e a m m u O s n e o th c from ing different of its GCC neighbours, investment g n ti c ra Despite hav tt e a , nds wth t than som e stable gro from leading global bra c n e ri retail marke e p x e continues to ers, as well as interest nonetheless nal develop io g re d n a l loca

A

ccording to preliminary figures produced by the Central Bank of Oman (CBO), the wholesale and retail segments of the services sector contributed OR2.1bn ($5.4bn) to the Omani economy in 2014, equivalent to 6.6 per cent of total GDP. This figure represented growth of 2 per cent on 2013 figures, down from the previous year’s 4 per cent. The growth figure is also less than half that for the economy as a whole, at 4.6 per cent, or indeed the average across the services sector of 13.1 per cent.

Regulation Part of the explanation for the slowdown in retail growth may have to do with changes to the regulatory environment. Since 2011 Oman’s retail sector has been subject to strict price controls, enforced by the Public Authority for Consumer Protection (PACP).

The controls were motivated by a rapid increase in prices occasioned by the boom in commodity markets following the global downturn. As an oil exporter that imports many of its consumer goods, Oman is heavily exposed to such cycles, and the controls have had the positive effect for consumers of suppressing consumer price inflation (CPI) in recent years. Having peaked at around 4.5 per cent in 2011, CPI has since fallen to 1.1 per cent in 2013 and 1 per cent in 2014.

In recent years the government has attempted to overhaul the price control system established in 2011, and the

20 APRIL 2016

situation currently remains in flux. A Cabinet decision in March 2014 attempted to limit the PACP’s responsibility to controlling the price for 23 essential products, including rice, flour, meat, fish and other staples. The price of other commodities not included in the list would thus be set by market forces. However, a royal decree issued shortly after stated that the implementation of the Cabinet decision would be delayed until a new Consumer Protection Law had been issued. In fact, three laws regulating the sector were passed later that year: a new Commercial Agencies Law, which came into effect in July 2014, significantly liberalised the Omani market, enabling foreign principals to now act through multiple agents in Oman, or even sell directly to consumers.

This was followed later in the year by a new Consumer Protection Law, and Oman’s first Competition and Anti-Monopoly Law.

Consumer Growth A.T. Kearney, a management consultancy firm, estimates total retail sales in the sultanate currently stand at $11.9bn per year, with a compound annual growth rate of 7.6 per cent since 2010. Recent growth in consumer spending has been boosted not only by price controls – which have arguably kept retail prices below the prevailing rate of inflation – but also wage increases. In July 2013 the government raised the minimum private sector wage for Omanis by 60 per cent to OR325 ($841) per month, while CBO figures show that

A typical souvenir shop in Nizwa City, Oman APRIL 2016 21

COUNTRY REPORT - OMAN

Ramdas, one of Oman’s oldest companies, local consumer habits remain quite different to those in neighbouring GCC countries, and particularly the UAE.“People in Oman are still somewhat diffident about indulging in malls,”he told OBG.“They are reluctant consumers, although habits are definitely changing. We’re finding though that malls are tending to become weekend destinations, while there isn’t much organic growth in the new hyper- and supermarkets. They seem to be cannibalising each other’s market share.”

As such, he sees more potential in what he describes as the“friendly neighbourhood store”segment, with Khimji Ramdas planning to launch nine such stores in partnership with Spar International by 2016.

Real Estate

Fisherman returns from fishing, Barka, Oman

government spending on wages, salaries and allowances grew by 35.3 per cent in 2014 to reach OR3.3bn ($8.5bn). The combination of the two factors has resulted in an increase in purchasing power for Omanis, which is in turn translating into rising consumer spending, though it is likely to also be squeezing retailers’ margins.

Companies are looking to increase productivity through new technologies.“There is also room for more e-commerce. Growth here is slow, but it is clear that mobility will be key when it takes off,”Satish Moorjani, CEO of Mustafa Sultan Group told OBG. Not all regulatory reforms have favoured an increase in consumption, however.

Recent changes to bank regulations have lowered the ceiling on personal loans from a maximum of 40 per cent of total bank credit to 35 per cent. Partially as a result, car sales have fallen by an estimated 25-30 per cent over the past 12 months, while

22 APRIL 2016

consumer confidence also declined by 10 points in the final quarter of 2014 (the last period for which figures are available).

Despite the fall, the absolute value of the index remained high, with two-thirds of the sultanate’s citizens believing their financial conditions will improve in 2015 and the future in general.

Underlying these recent figures is more than a decade of strong growth in consumer purchasing power. According to figures released by the National Centre for Statistics and Information (NCSI) in early 2014, average household income had risen by 83.9 per cent over an 11-year period, reaching an average of OR1172 ($3034) per month, and as high as OR1459 ($3777) in Muscat. The same figures show that average household spending hit OR930 ($2408) a month, with around 30 per cent of spending going on food.

According to Sridhar Moosapeta, CEO of the consumer products group at Khimji

Muscat has seen rapid growth in capacity in recent years, although it remains a small market in comparison with the neighbouring UAE. A.T. Kearney’s annual Global Retail Development Index, which ranks the top 30 emerging markets for retail investment, placed Oman in 26th position in 2015. While concluding that the outlook for Oman remains “fairly positive”, the company nonetheless highlighted the comparatively slower pace of retail development as the reason for the fall.

OBG estimates current gross leasable area (GLA) in air-conditioned malls to stand at approximately 353,000 sq metres as of end2015, with two new developments entering the market during the year. The Avenues Mall, a 105,000-sq-metre (80,000 sq metres of GLA) Lulu Group development located in the Ghubrah district, opened its doors to the public in May 2015, while Panorama Mall, a 21,000-sq-metre development by Allied Business Corporation, opened in late 2015 just a stone’s throw away.

Indeed, Ghubrah looks set to become the retail hub of Muscat, with Muscat Grand Mall, a 65,000-sq-metre development

by Tilal Development Company which opened its doors in 2012, also located in the neighbourhood, and set to add an extra 100 retail units in a new expansion. While experiencing less rapid growth than the neighbouring UAE and Qatar, Oman’s retail sector is attracting significant investment from both domestic and foreign investors.

-www.oxfordbusinessgroup.com

ONLY THE BEST IS GOOD ENOUGH

STEAM CLEANERS

RIDE ON SCRUBBER DRIERS

COLD PRESSURE WASHERS

OUTDOOR SWEEPERS

HOT PRESSURE WASHERS

WALK BEHIND SCRUBBER DRIERS

For any cleaning challenge, we have a solution. We understand the demands of your business, whatever industry you operate in.

For more information, Please visit www.karcher.ae or call us on Tel: +971 4 886 1177

COVER STORY

MAN enough! n iherr vo e r F z n Fra aging z, Man Redwit ruck MAN T r, o t c e Dir East Middle & Bus E, talks rica FZ f A d n riff a ar Sha w a n u ial to M mmerc o c e h t in about dustry in s le ic ing veh rom fall f n io g the re fety, s to sa e ic r p oil d the logy an of techno printing s D 3 – art future other p d n a s e spar

24 APRIL 2016

COVER STORY

AORIL 2016 25

COVER STORY

I

n general, the commercial transport industry has improved and become more professional in its approach in terms of evaluating solutions.

Customers are now looking more into evaluating products and services from a TCO (Total Cost of Ownership) perspective. However, majority of customers still look at the price equation as the buying argument in the Middle East region.

“The construction industry, which is one of the mainstays of the commercial vehicle industry has been severely affected by the low price of oil, and this has affected demand for our products in the form of trucks. The transport sector, however, has performed well, and we see a big shift in terms of demand from construction to long haul vehicles,”says Franz Freiherr von Redwitz, Managing Director, MAN Truck & Bus Middle East and Africa FZE. MAN Trucks and Bus’ service offering has consistently improved, and they are improving their service network with their The GCC is moving partners.“Our main goal is towards cleaner to have zero breakdowns of our vehicles, and we have fuel with Euro 4 maintained our reputation to become the for high quality vehicles with our trucks coming in only for norm by 2017. scheduled maintenance over Road safety has the life of the vehicles,” he adds. also become a big They have introduced a area of focus, and new generation telematics solution called MAN EcoStyle MAN consults with in the region. MAN EcoStyle has been designed to help local authorities transport operators to to conduct regular improve driving standards, reduce vehicle wear and tear, road safety enhance safety levels, and campaigns improve vehicle health, as well as reduce overall operating costs, emissions and fuel usage. With the help of the telematics solution, they can prevent unplanned breakdowns and maintain the operational efficiency of their trucks at a very high level.

“Our plan for the region is maintain our leadership position, and we are looking to expand our sales and service infrastructure across the region. In Kuwait, our local importer by name Al Ahlia Heavy Vehicles Selling and Import Co is building a completely new headquarters, and this will be a multi-million investment. Here in UAE, we are in the process of building a brand new facility for our MAN Truck and Bus Middle East head office in Jebel Ali Free Zone,

26 APRIL 2016

COVER STORY

AORIL 2016 27

COVER STORY

Safety

and this will also house our Regional Training Centre,” says von Redwitz.

Sales for MAN Truck and Bus Middle East are done through their local importers across the region. Lease options are also available.

MAN has an excellent reputation for after sales service, and customers can benefit from a full maintenance contract.“But the biggest segment for MAN is undoubtedly our trucks, which account for two-thirds of our turnover.

Buses are our next biggest segment, followed by engines and parts,” he says.

MAN has worked diligently with their importers to create a superior service and sales infrastructure across the region. This has helped them in improving their market share.

Another aspect that has set MAN apart is their focus on creating tailor-made training programmes for importers to be able to create a great environment for skills transfer.

“Our main goal is to be close to our customers and understand them, so that we can fulfil their needs better. We have, over the years, customised our products for the region, and this has helped us to gain customers and improve our market share,”adds von Redwitz.

At the moment, KSA is MAN’s biggest market due to the size of the market, and quantum of demand that comes from the kingdom. However, they invest consistently in the region with their importers to maintain

28 APRIL 2016

an excellent sales and service infrastructure, and they do this based on customer needs and how the market is evolving.

“Typically, we go to a customer and understand his requirements before suggesting the most economical and technically superior solution. Depending on specific customer needs and industries, customers may need different engines, different gearboxes and payloads. MAN only supplies the chassis, and then partners come on board to build the body for specific requirements – for eg, concrete tippers. With our in-depth knowledge of regional customer needs, we have ensured good availability of products so that customers can purchase them quickly. Customers in the region want products quickly, and they are not prepared to wait. So having a robust inventory of vehicles is critical,”he explains.

The GCC is moving towards cleaner fuel with Euro 4 to become the norm by 2017.

Road safety has also become a big area of focus, and MAN consults with local authorities to conduct regular road safety campaigns.“Based on MAN’s global experience and research, we firmly believe that a combination of behavioural and technological measures can significantly enhance road safety on public roads in the region. We also need fleet operators and owners to make sure that they fully comply with all necessary regulations. For example, telematics, when applied in a smart way can also change operational behaviour to increase road safety. This can be done by measuring driver behaviour over time to see how they perform in terms of safe driving,”explains von Redwitz.

Consider this: a five per cent decrease in average speed leads to an approximately 10 per cent decrease in injury crashes, and a 20 per cent decrease in fatal crashes, according to a US Department of Transportation study in 2014. In the UK, experience from a fleet operator has revealed that Telematics can lead to a 92 per cent reduction in speeding.

The drive towards enforcement of permissible axle weights is also gaining ground across the region. Trucks have a certain weight restriction, and frequently, what happens is that they become overloaded beyond what is legally permissible. This also has an impact on road infrastructure as it leads to degradation of roads and bridges across the region. This in turn leads to increased infrastructure costs for the countries.

“But the main challenge that we face is on the economic front is because of the slowdown in activity and the low cost of oil, which is affecting regional economies. This in turn has a cascading impact on demand for our products,”he says.

Technology and the future Currently, MAN utilises 3D printing to make spare parts that are seldom used and not required in big quantities.“So the technology is useful and has its merits. We will have to wait and see how the technology evolves, but the future looks promising,”he concludes.

Order fulfillment solution to increase your efficiency Being one of the most efficient order fulfillment systems available, the Schaefer Carousel System provides 1,000 picks per hour and can increase storage density by 50%. Its modular system design makes the SCS an adaptable and intelligent system solution for dynamic order picking processes with a very high performance level and maximum economic efficiency. Contact us, we will show you how to become fast, flexible and efficient.

SSI Schaefer Systems International DWC LLC P: +971/4/8048 100 路 info.ae@ssi-schaefer.com 路 www.ssi-schaefer.com

Future proofing growth Moving into the future, the aviation industry is ensuring that flying becomes more sustainable. Qatar Airways has signed up with Sustainable Aviation Fuel Users Group (SAFUG) to drive the development and standardisation of sustainable aviation

Airline signs industry sustainable pledge to develop biofuel

30 APRIL 2016

Q

atar Airways has signed a pledge to support the airline industry’s commitment to sustainable aviation fuels. As a member of the Sustainable Aviation Fuel Users Group (SAFUG), a world leading environmental research programme, the pledge unites Qatar’s national airline with industry leaders to drive the development and commercialisation of sustainable aviation biofuels. As a global aviation operator, Qatar Airways will contribute its substantial sustainable aviation fuel knowledge and expertise to emerging industry programmes that are developing sustainable biofuels in an effort to achieve lower and more efficient greenhouse gas emissions.

Qatar Airways Group Chief Executive, His Excellency, Mr Akbar Al Baker, says,“Aviation will make a significant contribution to the global response to climate change, and Qatar Airways is contributing towards the development of local and international solutions. Qatar Airways is represented on IATA’s most

The 787 Dreamliner

senior environmental committee, and together with our commitment to SAFUG, we are fully united with our aviation partners in our shared ambition to reduce the industry’s impact on the environment. It will take time and shared vision to advance the development, certification, and commercial use of sustainable aviation fuels and we have the ambition to meet this challenge and achieve change.” Qatar Airways’ fuel optimisation programme is one example of how it is working towards the airline industry’s target to improve fuel efficiency by 1.5 per cent each year to 2020 and to deliver carbon neutral growth beyond this date. This initiative involves testing and implementing new methods to save fuel and reduce carbon emissions such as reducing aircraft weight; optimising route efficiency; and using only a single engine while taxiing from the runway. A commitment to the SAFUG Pledge will see Qatar Airways’ experts working in partnership with governments and industry representatives in response to global climate change challenges, identifying research projects and sharing best practice and innovations into the development of lower carbon and renewable fuels derived from environmentally and socially sustainable sources.

AVIATION

Mobile app for cargo Qatar Airways Cargo, the world’s third largest international cargo airline, announced the launch of its first mobile app QR Cargo, available for both Android and iOS devices via Google Play Store and Apple App Store.

This application aims to provide ease and convenience to the cargo airline’s customers, by having all the important information at their fingertips on their mobile devices. In addition to getting detailed status of their shipments, customers can now use this app for various enquiries such as Qatar Airways passenger flight and freighter schedules, office contact details, product descriptions and more.

“The all new Qatar Airways Cargo app is linked to our in-house Cargo Reservations, Operations, Accounting and Management Information System (CROAMIS), which provides real-time data and updates for each logistic milestone achieved, direct to our customers,” says Ulrich Ogiermann, Qatar Airways Chief Officer Cargo. We are excited

about the launch of our first mobile app that provides more convenience and value to our customers, giving them the freedom to manage and access to their global business anywhere and anytime on their schedule.”

App features include: instant shipment tracking, weekly flight schedule search, recent search history, charter service request, location and navigation services to Qatar Airways Cargo worldwide offices and many more useful tools.

Besides requesting shipment bookings and charter services, customers can also easily track each piece of their shipment with a microscopic view of each stage of the process through this mobile app. The recent search history option allows users to look for frequently searched shipments, routes or schedules without having to remember lengthy details such as the 11-digit airway bill (AWB) numbers. Additionally, a comprehensive directory of the cargo airline’s worldwide offices is integrated within the application which enables customers to navigate to these offices using location maps featured in their mobile devices or calling the offices directly with just a tap.

The 787 Dreamliner’s latest destination From July 1 this year, there will be a substantial aircraft upgrade on the Doha to Geneva route.

This will be the airline’s second Dreamliner route to Switzerland after Zürich. The route will almost double current capacity on the direct daily service with 254 seats.

Cargo capacity will be enhanced to 80 tonnes per week carried to and from Geneva.

The Boeing B787 Dreamliner combines the latest in aeronautic engineering with refined onboard hospitality in a spacious and light environment. Large electronicallydimmable windows create dramatic views and provide natural light, while fullspectrum LED lighting sets the mood and helps passengers to adjust quickly to changing time zones. A lower cabin pressure, improved air quality and optimal humidity also contribute to a refreshed feeling upon landing.

APRIL 2016 31

TECHNOLOGY

The solution to water shortage?

Crystal Lagoons develops technologies to produce water without using energy.

GSC reports

Carlos Salas

32 APRIL 2016

W

ater shortage affects one billion people worldwide. The good news is that there is a new technology that aims to help solve humanity’s biggest problem, by using wasted thermo-electric power plant energy equivalent to eight times the world’s renewable energy capacity.

Crystal Lagoons, the patented technology developer of giant crystalline lagoons, is reporting strong worldwide interest in a new technology developed by the company to deal with our biggest problem - the shortage of potable fresh water.

Crystal Lagoons’ experimental desalination technology project is a ‘zero energy’ solution that would use wasted energy from Northern Chile’s 12 thermoelectric plants to potentially generate enough potable water for the country’s entire population. This wasted energy is the equivalent of eight times the world’s renewable energy capacity, and has huge global potential.

According to the United Nations Environment Programme (UNEP), by 2025, almost two billion people, or 40 per cent of humanity, will face life-threatening water shortages, with virtually every continent affected. UNEP data reports that eight countries in the Middle East already have the lowest water availability per capita in the world, while the UAE is one of the highest per capita water consumers globally.

“Water issues are an integral part of our corporate social responsibility programmes.

As a responsible global corporation, we place tremendous emphasis on how we can make an impression on the issues affecting the rest of the world,”says Carlos Salas, Crystal Lagoons’ Regional Director for the Middle East.

Crystal Lagoons plans to establish pilot plants in several locations across Chile, with construction of the first plant, located in

Antofagasta, set to begin later this year.

The company will invest USD 222,000 (AED 815,394.90 / 150 million pesos) into the project.

The technology has already been patented in the US via the United States Patent and Trademark Office’s (UNPTO) Green Fast Track programme, which gives preference to granting patents to technologies that have a high ecological impact and environmental contribution.

The international market has confirmed the export value of this technological innovation, with an explosive growth that, in less than seven years, has reached a sizable portfolio of 300 projects worldwide in the urban, tourist, public and industrial sectors, in various stages of development.

Today, the firm is associated with major international real estate companies, with presence in five continents across 60 countries, including the United States, Saudi Arabia, United Arab Emirates, Egypt, Thailand, Indonesia, Singapore, Jordan, Mexico, Brazil, Colombia, Argentina, Peru, Paraguay, Uruguay, Chile, among others.

Patented in 160 countries, this technology is also revolutionising the international energy and water market via its industrial applications for sustainable cooling of thermal power and industrial plants, and low cost water desalination and purification.

Crystal Lagoons is the only firm in the world able to offer this innovative technology that enables the economically viable development of giant crystalline lagoons suitable for swimming, and the practice of water sports. These immense bodies of water are an irreplaceable amenity for real estate and tourist projects worldwide, as they add differentiating value, and caused a revolution in the worldwide real estate industry.

These giant crystalline lagoons only need water to compensate evaporation, and have a water consumption level of approximately half a park, and up to 30 times lower than a golf course. Additionally, they use up to 100 times fewer chemicals than traditional disinfection and drinking water systems, and only two per cent of the energy required by conventional filtering technologies. Good news indeed.

APRIL 2016 33

3PLs and logistics service providers

– is the future changing?

34 APRIL 2016

INDUSTRY TRENDS

Reverse outsourcing. Cutting out the middle man. Not using the usual suspects. This is what shippers – retailers, manufacturers, and others – are doing. At the same time, 3PLs and logistics service providers (LSPs) are dealing with and competing in a commoditised industry, where price is the key differentiator. Tom Craig, President LTD Management, explains

The What / The Driver The initiatives for these actions come from Amazon, a USD 100 billion (AED 367 billion) retailing and e-commerce corporation. Years ago, they began selling products, such as individual books, directly to customers, when everyone else moved cases of products to stores to stock shelves. Now they are a company that has gone beyond a paradigm shift to driving global mega trends in retailing, supply chain management, and logistics. Amazon dominates e-commerce, and is in B2C retailing and B2B with its wholesale business.

APRIL 2016 35

INDUSTRY TRENDS

Their supply chain drives changes Some of the actions they have taken, in their logistics to support its order and are taking, include: immediacy, which is number one in the Order immediacy (delivery within world. Many miss this. Other impacts 48 hours, or less, of placement). are second. And this is why they keep This service has created a special separating themselves from other customer experience, and is a retailers and logistics providers. They competitive advantage over e-tailers know what is important. and omnichannel retailers. They are Providing planes and being a freight doing this on a global scale. Add in forwarder gives them control - even others, such as Alibaba, who also push chain of custody - in the movement of immediacy.

Amazon products. That translates into Owning planes for freight movement. compressed time and inventory velocity This has been noticed.

- two key needs for order Establishing a freight immediacy. forwarder in China. This act has created significant Changes will attention with freight The Why / Questions not stop with Let’s begin with the forwarders, 3PLs, and other logistics providers. e-commerce operating reality of 50 per cent customer turnover Transportation provider.

B2C. It will for 3PLs and LSPs. This In SEC filings, Amazon is keeping in mind that has declared itself a spread to logistics selection is based ‘transportation provider’.

B2B, across on low price, making a Delivery to customers’ commoditised industry. Add car trunks. They are doing industries, to that, that some retention this in Germany for select car models. markets, and is due to customers not wanting to go through the Drones. Amazon gained the world work of making a change much media recognition - not because of high with this. customer satisfaction.

Driverless trucks. Everyone is talking Changes are not limited to Amazon. cars. Amazon is talking delivery.

E-commerce firms in China - a very 3D truck deliveries. They are a leader large online market - are building up with this idea of 3D printing and their own capabilities. Uber is getting deliveries in trucks. into e-commerce deliveries; so is Flex drivers for quick delivery.

Google Express. Ralph Lauren made Amazon sees things very differently. the decision to stop using a warehouse They are doing their own logistics, managed by a 3PL, and to bring it not always turning over their logistics into its own distribution centre. Are to providers, especially big-name these random events? Or, are they the providers. And given their size and beginning of a logistics change - and a global status, these actions have come wake-up call for logistics providers? under the radar.

36 APRIL 2016

INDUSTRY TRENDS

APRIL 2016 37

INDUSTRY TRENDS

supply chain management E-commerce and its What if Amazon and order immediacy, and retail omnichannel are moves past how the provider contributes bringing in a new era and to immediacy and customer breed of logistics providers providing experience - and the supply that can help enhance transport service chain that drives them. The the customer experience. changes will have to include What they will do, how for itself, and last mile delivery, and much they will do it, and why, is opens to providing more. It will not come changing. The questions traditional transport, are how it will change, and services to other from warehousing and other what will providers do to services. adapt - or not. companies?

The large M&As last year There is another They would have has created interest in what elephant in the room – size will mean to competitors, Amazon. What if Amazon a competitive both large and small. Will the moves past providing advantage. size work against their being transport service for itself, able to position themselves in and opens to providing evolving, fluid Amazon-like supply chains? services to other companies? They would have a competitive advantage.

There are underlying questions with They know the shipper perspective what is happening: because they are a shipper.

Has the 3PL business model has become too commoditised, outdated, The How / What does it mean? and in need of change?

How firms manage their supply chains, and who they deal with as logistics providers What does the Amazon effect mean to is transitioning. The supply chain for 3PLs and logistics service providers? Is it immediacy is very different than the ones a minor topic, or one that will be limited that have been used for standard retailing to a market niche? Or is it the beginning and manufacturing. And this difference of a major industry transition that crosses extends through the entire supply chain, industries and world? from suppliers through to customers.

What must be done to adapt?

There is a shift in focus, on the supply Who will lead the change? Who will lag? chain to drive omnichannel, and away Who will be left behind? from logistics functions as standalone activities. That increases the requirement Prognostication for integration, time compression, and What Amazon is doing in retailing, and with inventory velocity, linked with extending the logistics and supply chain management is supply chain upstream. global. Many are struggling to keep up with Retailing omnichannel means many what they are doing. The change for logistics smaller and faster shipments to customers. providers and 3PLs will be less about functional That is different from truckload deliveries to performance and more about a place in stores. This is impacting e-commerce and the supply chain to provide the constantly omnichannel companies worldwide, and is improving customer experience. They will expanding into cross-border sales. become 3PSCM - third-party supply chain All this presents opportunities for logistics management. That is a significant transition. providers, who are capable of, and willing to Changes will not stop with e-commerce transition for new supply chains. Investors B2C. It will spread to B2B, across industries, will want to assist leaders who have markets, and the world. The result is sustainable business plans and models. expanding and redefining the provider role.

There is an opportunity to move away Amazon is doing things in-house that many from being a commoditised business and firms outsource. What will this mean to really create value. The value comes from logistics outsourcing?

38 APRIL 2016

Retailers, supply chain people, and logistics providers of all kinds can debate how it will impact them. But ignoring what is happening is not an answer. Strategy and analysis are needed. Where and how do providers and 3PLs position themselves?

What is required to do this?

Standing still is a risky option. There will be leaders and laggards. Laggards’ delay and attempts to copy what is happening - instead of leading and defining - creates uncertainty and commoditising of those who do it. Amazon has begun a global trend. Ignore at your own risk.

Tom is a leading supply chain and logistics consultant with LTD Management. He has real-world logistics and supply chain experience. He provides consulting for 3PLs and other logistics service providers to develop and execute strategy, create value proposition/unique selling proposition, positioning, blue ocean strategy, and service / market segmentation that improve customer retentions, increase margins, and grow the business.

Craig has practical supply chain experience with major corporations, including General Electric, Abbott Laboratories and 3M. Craig has written over 70 articles on supply chain management and logistics. In addition he has spoken at conferences worldwide, including England, Singapore, China, Hong Kong, UAE, Chile, Panama, and Nigeria. He has also conducted a master class programme in supply chain management in China for Chinese companies and is on the advisory board of the Logistics & Supply Chain Management Society in Singapore.

Tom Craig has an MBA from The Pennsylvania State University, which has the leading supply chain programme in the U.S. Contact: tomc@ltdmgmt.com

Warehouse Management Software Efficiency. Transparency. Reliability.

www.ehrhardt-partner.ae

t i s t ge s Express ha L H D , w ro s in a arded Three year recognised and aw lly 016 been officia pany To Work For’ 2 rk om ce to Wo la P the ‘Top C t a re G HL by the in the UAE Daga, Head of HR D hy nu ff w Institute. A tells Munawar Shari AE, Express U e accolade th s e rv e s e DHL d 40 APRIL 2016

MANAGEMENT

ir ght D

HL Express UAE currently employs more than 1,000 Certified International Specialists across the following departments – Operations, IT, HR, Finance, Commercial and Customer Service.“Getting the right people on the DHL bus is instrumental to our success. After all, people are the first and most important pillar in our strategy (Motivated People), and without employees who have the right knowledge, skills and attitude, we can’t achieve our customer commitment to service excellence,” says Anu Daga, Head of HR, DHL Express UAE, adding, “We recognise that the right recruitment and onboarding process is crucial in facilitating this. As the recruitment process is the first contact potential

future employees have with DHL, every touch point and step in the process reflects our values and company culture.”

The selection process at DHL is thorough and transparent, and focusses on hiring the right “mindset and attitude”. They test for knowledge and skills, but experience has shown that the latter can be trained and developed to an extent, so the focus is on behaviours and competencies.“We seek employees who are able to demonstrate attributes that DHL believes are key to our success as Certified International Specialists,”she says. These include: ‘Can do’ mindset Passion, and the willingness to go the extra mile Insanely customer-centric attitude Taking responsibility, and working towards the success of the team – as one.

APRIL 2016 41

MANAGEMENT

able to deliver on this through our 70-20-10 Daga also looks at innovative ways approach of learning (70 per cent on the job, in which she can hire employees.“Very 20 per cent coaching, 10 per cent classroom common and successful for us are referrals training),”she explains. from DHL employees, and our managers It starts with a clearly defined competency identifying talent in unexpected places, such framework, which forms the basis of their as their real estate agent or a taxi driver who development journey, and is a constructive demonstrated that they have a customer model for looking at employee performance, centric attitude! Our recruitment cards are development and potential. The Certified a great way to identify talent and encourage International Specialist programme is them to apply to DHL,” she smiles. their globally harmonised learning Once an employee joins platform aligned to their strategy; DHL, they recognise that the first couple of days, In addition to building functional, cross functional and leadership capability in a very weeks and months are the company interactive and collaborative learning crucial in establishing a environment. rapport - an employee’s induction, Employees also have access to initial impressions each employee a sophisticated e-learning portal; are generally lasting providing learning flexibility for impressions and may make undertakes individuals both at work and the difference between an in depth outside the workplace. DHL has an employee choosing to a Management and Leadership stay on or leave during the role specific Development approach, which extends probation period. functional beyond the traditional classroom.

The new ‘DHL in a A certified International Manager box’ is a welcome box induction programme, together with cross delivered by one of which gets functional projects and mentoring, the DHL couriers who on long term development and welcomes the employee them ready for focuses getting the right skills required to lead to the team. This is a truly in the 21st century. unique differentiator. their role And finally, targeted training Their onboarding covers needs are addressed through customised all the practical aspects of relocation, starting programmes, designed and delivered internally, a new role, integration with the team, based on an in-depth training needs analysis. developing functional expertise, and ensuring This predominantly focusses on development a welcoming and smooth transition. But more of skills and behaviours that are aligned to the importantly, it focuses making sure that the strategy of key business initiatives. employee feels part of the ‘Red and Yellow “The glue that brings it all together is family’, and is absorbed into the DHL culture. the feedback and coaching culture in the “Our fantastic induction programme, organization, which encourages managers ‘Welcome to my Company’, issuing of the CIS to continually develop their employees passport, which makes the employee a DHL (Developing Others is one of the core ‘Certified International Specialist’, are just competencies that managers are assessed some examples of how we make employees on). Together with a focus on post-course feel welcome and part of team DHL. In application of learning in the workplace – we addition to the company induction, each are taking the right steps to train and develop employee undertakes an in depth role specific employees for their growth and have an functional induction which gets them ready impact on performance. A promotion rate of for their role,”adds Daga. The proof of their 80 per cent is testament to the fact that we success in getting this important element of are developing our internal talent to grow engagement right is evident in their retention with the organization,”boasts Daga. and engagement rates of new employees.

The DHL culture can be summarised as DHL makes a strong commitment on engaged and motivated employees having development being a core part of their their ‘Best Day Everyday’. This is what makes Employee Value Proposition.“At DHL, we are

42 APRIL 2016

a great workplace - respect as a core value, nurturing employee career development, creating a fun work environment, being transparent, listening and acting on employee feedback, and celebrating successes.

Together with the more forward thinking initiatives such as the Certified International Specialist programme, Global DHL’s Got Talent, Fitness Center and wellness at the office, and the management team spending time with frontline employees (on courier rides/CS calls), they ensure that employees know at every step that they are the key to DHL’s success, and that of it’s customers.“The differentiator is that we do it consistently, and always look at ways of improving it every year. We believe our

MANAGEMENT

success as a workplace is because of our continuous focus to go from Good to Great.

This is ingrained in our mindset and culture by our philosophy “Everybody, Everyday, Everywhere….A little bit better”. Who

wouldn’t want to work for a company where they know they are empowered to make a difference for their colleagues, the business and our customers. And they have an opportunity to give back – the Spirit of Yellow

CSR umbrella is run by employees who are passionate and inspire those around them to make a sustainable impact,”she adds.

DHL adopts a continuous improvement approach towards everything, whether it’s employee related or customer related, and they make sure they listen and act quickly. They take pride in their reputation for excellent standards, and this can only be achieved if they have people who are motivated, driven, empowered and engaged.

APRIL 2016 43

MANAGEMENT

“What makes DHL a Great Place to Work is our fundamental ethos that - our employees are the key to our success; and then we deliver on this commitment every day,” says Daga, adding,“The UAE is unique in many ways. One key differentiator that we need to consider that majority of our employees are expatriates, employed outside their country of origin, away from the normal support network of family and friends. Creating a company culture that, to some extent, takes over that role of care and support is therefore essential. This is done through our policies, going out of

44 APRIL 2016

the way when employees are in need, and ensuring that we are continuously listening to employee feedback and acting on it,” explains Daga.

In addition to this, DHL has several unique initiatives that employees experience. Like the Certified International Specialist (CIS) programme, a learning and development platform that enables staff empowerment through knowledge and provides development opportunities for all 100,000 employees of the company, across 220 countries and territories. The programme begins with a Foundation Course (which

is also the induction programme for new recruits to the company). It also incorporates additional modules, which focus on specific functions within DHL (ie, customs clearance, aviation), as well as the Certified International Manager programme for executives. This is an amazing commitment on the part of the organisation to develop their employees to be the best in the industry.

Employee engagement initiatives such as DHL’s Got Talent, Sports tournaments, Appreciation weeks, all create a fun work environment. At DHL, they also focus on wellness at work – with a Fitness Center in

MANAGEMENT

the office and range of wellness programmes, making sure that employees can have a healthy lifestyle.

Appreciating, Recognising and Saying ‘thanks’ is also an important part of the DHL culture.“We want our employees to feel like the superstars of the international express industry. From the ‘AS ONE’ events that are celebrated as part of our Appreciation weeks, to the ‘Every Day Heroes’ programme, which awards employees who demonstrate outstanding performance, and the Employee of the Year programme, where the superstars are taken on a three day trip to celebrate with

other regional winners and get the award from the global CEO – our employees are made to feel special and appreciated at every opportunity available,”informs Daga.

Finally, what is special about the DHL culture is that the leadership and management team spend a lot of time with employees.

Talking to them, explaining the strategy and state of business and getting their input on what makes the business better. Their culture of transparency and working as a team is a key motivator for employees.

“We recognise the loyalty of long serving employees through our

Appreciation programme, where we have long service awards for five, 10, 15 … all the way through 35 years (yes, that’s how long the longest serving employee is working for us in DHL UAE). Our long serving employees are also used as inspirational speakers in induction, and they share their knowledge and words of wisdom. In such a transient environment like the UAE, where majority of the employees are expats, we support them with relocation and working options back in their home country should they want to return home,” she concludes.

APRIL 2016 45

HE Saif Al Falasi, Group CEO, ENOC

Fuelling progress ENOC to commence construction of Project Falcon extension to Al Maktoum International Airport.

GSC gets the details

46 APRIL 2016

A

n Emirates National Oil Company (ENOC) stakeholder’s event gave the attendees an update on the various projects underway. ENOC, through its subsidiary Horizon Terminals Ltd, will commence construction of the underground 16 kms Jet Fuel pipeline extension that links its storage terminal in Jebel Ali with Al Maktoum International Airport in Dubai South, in Q4 of 2016.

Front End Engineering and Design (FEED) for the pipeline extension to Al Maktoum

International Airport is currently in progress, and is expected to come on-stream by the fourth quarter of 2018.

The 58 km pipeline connecting the storage terminals in Jebel Ali with Dubai International Airport has been operational since March 2015, and has a storage capacity of 141,500 cubic metres for adequate jet fuel supply to the Dubai International Airport.

The event was attended by His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Airports, President of Dubai

INFRASTRUCTURE DEVELOPMENT

Falcon Project Commemoration Ceremony

Civil Aviation Authority, Chairman and Chief Executive of Emirates Airline and Group, and Chairman of Dubai World; Khalifa Al Zaffin, Chairman, Dubai South; along with several senior government officials and industry leaders.

“With its strategic location and impressive airport connectivity, Dubai’s vision to become the Middle East aviation hub and leading business destination has now been realised,” said H E Saif Humaid Al Falasi, ENOC’s Group CEO, adding,“ENOC has had a close association with Dubai Airports since inception, supplying jet fuel to meet the increasing traffic demand at the Dubai International Airport. With the extension of 16 kms to Al Maktoum International Airport, we look forward to strengthening this relationship, as well as powering towards the future of connectivity of this great emirate.”

Dubai Airports recently announced that Al Maktoum International Airport has a projected annual capacity of 12 million tonnes of freight and 160 – 260 million passengers. This coupled with Dubai International Airport’s USD 7.8 billion (AED 28.6 billion) airport and airspace expansion programme are key indicators of Dubai’s plans towards the growth of their aviation infrastructure and capabilities to double its passenger handling capacity to 200 million passengers a year by 2045.

In terms of meeting fuel demand, the majority of Dubai International Airport’s jet fuel supply can be fulfilled by Falcon pipeline.

Upon the completion of the extension to Al Maktoum International Airport, the pipeline will be able to meet 60 per cent of Dubai Airport’s combined demand in 2050.

“Project Falcon is already providing reliable daily supply of jet fuel to Dubai International Airport, and will do the same for Al Maktoum International Airport in the near future,” said Al Falasi. “As Dubai expands its aviation and tourism capabilities, infrastructures like Project Falcon are crucial facets of the city’s overall development plans.”

ENOC is a strong contributor to the growth of Dubai’s aviation sector and has heavily invested to adopt the latest technologies for the industry and has continuously implemented best practices, thus achieving world class performance.

ENOC currently is the largest supplier at Dubai Airports and is committed to provide world-class energy solutions that support the government’s growth and expansion plans.

APRIL 2016 47

Heading towards a bright future Frost & Sullivan’s latest analysis reveals Oman’s logistics industry is to witness transformation with investments on infrastructure, and latest technology, which is expected to spark amazing growth opportunities

48 APRIL 2016

ANALYSIS

T

he logistics industry in the Sultanate of Oman is going through a transformation to overcome infrastructure bottleneck, lack of investment in port handling capacity, and poor land transport connectivity with other GCC countries. Strong support from the Government on key infrastructure projects to ease congestion and enhance capacity is the main reason for this transformation.

Key projects include development of national railway network and modernisation of airports, with a focus on increasing freight handling capacity. The logistics sector is one of the main, non-oil economic sectors, and contributed 4.9 per cent to the country’s GDP in 2015, and the Government is keen on promoting Oman as a leading logistics centre in the region.

Frost & Sullivan’s ‘Sultanate of Oman Logistics Industry 2016 Outlook’ provides a glimpse into the Oman Logistics Industry’s market drivers, restraints, revenues, growth rate, and more. The logistics industry in Oman is likely to grow at a Compound Annual Growth Rate (CAGR) of 6.9 per cent between 2015 and 2020. The key drivers for economic growth are the infrastructure investments associated with national logistics development plans, economic diversification efforts, and trade with the GCC, Asia and Sub-Saharan African countries. Oman’s National Rail Network is likely to increase capacity, and the Logistics Strategy 2020 aims to provide the infrastructure required for the development of major hubs for handling international cargo.

As a member of the Gulf Cooperation Council (GCC), Oman is likely to benefit

The Industrial Port of Muscat, Sultanate of Oman

APRIL 2016 49

ANALYSIS

from alignment of trade policies and customs regulations, integration of national transport infrastructure with regional transportation corridors in the GCC. The Oman Logistics Plan 2020 and the Oman Logistics Strategy (SOLS) 2040 plan to improve the country’s soft infrastructure, particularly the regulatory environment, support mechanisms, and institutions. Oman’s strategic centralised location in the Arabian Gulf makes it ideal for conversion into a major trans-shipment hub for East-West trade route.

Some of the key trends identified in the Oman logistics industry are: Initiated by the Supreme Council of Planning (SCP), the task force has developed the Sultanate of Oman Logistics Strategy 2040 (SOLS 2040) Investments on infrastructure and latest technology for upgrading ports, airport facilities, new road links, supported by increased Government spending High priority is given for the development of national rail network to connect with the GCC rail network to improve efficiency and reduce logistics costs Trade with the GCC, Asia, and Europe is likely to remain the major driver for freight forwarding and transportation companies in the region

50 APRIL 2016

Main exports continue to be mineral fuels, oils distillation byproducts, while imports comprise manufacturing goods and agriculture products The Transportation and Logistics segment accounted for around US$8.81 billion (AED 32 billion) in Oman’s GDP in 2015. The services sector will be the growth engine for Oman’s economy, driven by Government focus on logistics, transportation, and tourism industries.

Amongst all freight activities in Oman, sea transport is the predominant mode, accounting for more than 80 per cent of freight in Oman, handled by Sohar and Salalah Ports. As part of the Government’s plan, Port Sohar has been promoted to handle sea cargo as an alternative to Muscat since 2015. Following major upgrades of port facilities, Sohar port handled nearly 50 million tonne of cargo in 2015. Sea freight is likely to grow by 4.8 per cent in 2016, driven by the increasing intra-region GCC trade and due to trans-shipment demand from Asia, Europe, and Africa.

The road freight in Oman is driven by domestic economic activities to meet local demand and land-based trade with other GCC countries. Construction of a new link of a 680-km road between Oman and the KSA will provide a more direct route between the two countries, as well as reduce the number

of border crossings, while increasing road transport efficiencies. As international trade gains momentum with the expansion of cargo handling capacities in major airports, Oman is likely to see a steady upward growth in air freight in 2016. Overall, the Oman logistics industry is likely to grow by seven per cent in 2016.

Gopal R, Global Vice President, Supply Chain and Logistics Transformation Practice, Frost & Sullivan, says,“Oman’s logistics industry has the potential to be one amongst the key logistics centres in the region. The emphasis on domestic output is creating scope for substantial cargo volume growth to and from Oman. This can trigger enhanced connectivity and network, which would then lead to path of transforming the logistics industry to support trade for other countries as well.”

However, this growth could be challenged by some major factors like surging competition mainly from the UAE and the KSA, along with other countries with a similar portfolio and investment scenario for logistics service, the inefficient logistics infrastructure (especially, in the sub-urban areas) limiting the potential cost and time efficiency of the logistics operations, and shortage of skilled labour relating to logistics services to support the growing requirements of the market.

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

RAIL

A connected

Faris Al Mazrouie, CEO, Etihad Rail, gives a few insights on the progress of the rail project in the country and region What more needs to be done to improve the inter-connectivity of key infrastructure so that the industrial sector is able to benefit?

FARIS AL MAZROUEI: Close collaboration among infrastructure operators is a key factor in ensuring successful interconnectivity. We work closely with our future customers and partners to ensure that the UAE’s national rail network is properly integrated with regional ports, industrial zones and other transport infrastructure such as the wider GCC rail network, Dubai Metro and the planned Abu Dhabi tram and metro networks.

With regards to the GCC railway in particular, a coordinated effort from all six states is required to ensure the necessary harmonisation of technical standards and that the railways will serve their customers’ needs. This collaboration will play a major role in facilitating full technical 52 APRIL 2016

and operational interoperability and streamlined institutional arrangements – such as Customs processes – to ensure efficient regional rail services. For Etihad Rail, having proper interconnectivity also means we can link to other major transport and infrastructure hubs, benefitting our customers who are looking for a one-stop shop solution. In the UAE, Etihad Rail will connect industrial areas across the emirates and link these to the wider region, boosting trade and creating new business opportunities.

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

AL MAZROUEI: The availability of mode choice in a hub is critical in global supply chains because different modes of transport give you different speeds of

RAIL

delivery, reliability and costs. In today’s global economy, supply chains must be able to adapt to ensure companies are competitive. Tight integration of modes ensures that these companies have the adaptability and flexibility in their supply chains to meet the needs of their customers and to deliver their products at the lowest possible cost. Close integration between rail and logistics infrastructure providers – at airports and seaports alike – is a strategic element in the development of the UAE’s infrastructure network and of our trading economy as a whole.

Having proper connectivity will allow us to offer logistics companies an enhanced transportation system combining sea, road, air and rail.

Etihad Rail’s connection to logistics infrastructure hubs – such as Khalifa Industrial Zone Abu Dhabi and Jebel Ali Industrial Area in Dubai – will play an

essential role in the overall connectivity of the railway with key centres of economic importance to the UAE and the region, enabling a stronger and more efficient supply chain. To deliver this integration, we are continuing to form important partnerships with logistics infrastructure providers across the emirates.

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

AL MAZROUEI: A number of regional SMEs have been sub-contracted on construction and supply projects and have been instrumental in the timely and efficient delivery of stage one. Going forward, both stage two and stage three will open up similar opportunities. We also need

to consider the bigger picture and the key role that Etihad Rail has in the continued development of regional businesses – SMEs and larger corporations alike.

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

-www.oxfordbusinessgroup.com APRIL 2016 53

ADVERTORIAL

Cold Storage Improvement using Mobile Racking Learn how to design a better pallet storage system for freezer warehouses, doubling storage capacity while cutting lift truck maintenance expenses and labor costs time due to the much shorter distances between pick-up and storage locations.

The other option is to go for a better storage technology, more specifically a high-density storage system. A typical cold store utilizes selective pallet racking technology with aisles widths of up to 4 m. [It should be mentioned that VNA (Very Narrow Aisle) Racking can reduce the aisle width to approx. 2m].

Cosmin Sebastian Ilie, Regional Sales Manager UAE | Sales Middle East & Africa

I

n freezer warehousing, one of the major lift truck equipment failure is condensation caused by the constant in-and-out movement of product by lift trucks operating between the freezer’s -20° F temperature and the loading dock’s ambient air temperature – and we all know how hot it can get in the region.

The extreme temperature swings cause moisture to aggregate, resulting in the failure of electronics, electromechanical components and wiring.

At this point, two choices are to be taken into consideration: 1) automating freezer warehouses and 2) keeping lift trucks inside the freezer.

Should you go for the first option, the machines keep it clean and simple: once the pallets have entered the freezer warehouse via the high-speed dock door, the pallets travel on the pallet conveyor to the pick-up point. The lift truck picks up the pallet at the end of the conveyor line for put-away, reducing the travel

54 APRIL 2016

Build smaller and/or double the storage capacity Particularly in temperature-controlled warehouses, using high-density Mobile Racking allows you to use a smaller building footprint. The smaller building footprint results in a real estate reduction of 45% while offering about the same amount of pallet positions as conventional warehouses with selective racking. If the goal is to increase the number of pallet positions, or to gain another client and consequently double revenue, Mobile Racking is the perfect solution to increase the number of pallet positions in the same footprint by up to 100%.

The result: lower construction costs, lower operating costs, and increased profits.

Mobile Racking is a pragmatic, smart, state-of-the-art solution for freezer warehousing.

When designed correctly, Mobile Racking from SSI SCHÄFER is not only a better high-density storage solution, it will also significantly improve your warehouse efficiency, your throughput, and your profitability.

Oman’s

dry bulk logistics corridor

SOHAR builds on existing infrastructure to boost mining and minerals sector in Oman, GSC finds

A

s part of plans to further diversify its economy, Oman is fast developing new strategies that will add more value to the mining sector and the Sultanate’s substantial reserves of minerals. These strategies include the development of a complete supply chain, or Sohar Dry Bulk Logistics Corridor, that will immediately enable the export of minerals that are mined and processed in Oman to international markets at competitive prices.

The first step towards this goal is the signing of a Memorandum of Understanding (MoU) between SOHAR Port and Freezone, Vale in Oman’s Distribution Center, and Oman National Investments Development Company SAOC TANMIA. The agreement builds on world-class infrastructure already in place in SOHAR, currently operated by Vale in Oman, to import and export millions of tonnes of iron ore and pellets. The facilities allow the largest ships in the world, so-called Very Large Ore Carriers, with

56 APRIL 2016

a capacity of up to 400,000 tonnes each, to be berthed at the Port. Vale in Oman recently won the prestigious Best Specialist Dry Bulk Port Award for its SOHAR based terminal, at the International Bulk Journal Awards in Belgium.

Thanks to the excellent road connectivity in SOHAR and the upcoming cargo railway project, the agreement can immediately support the efficient flow of mining cargo to SOHAR Port. From there, the minerals can be stockpiled, processed and exported to markets all over the world.Vale in Oman’s deep-water bulk jetty can provide the required services at globally competitive prices to help fuel further growth in SOHAR Port. The jetty is the longest in the region, and ranks in the world’s top ten on draft.

With Vale in Oman’s initial investment of around USD two billion (AED 7345900000), there is no need for additional capital investment as the facilities are already operational since 2011.

“Oman is one of the most mineral rich countries in the MENA region, and our strategy is to build on this to achieve competitiveness in the industrial minerals market, and hence gain sustainable economic growth for the Sultanate,” said Rashid Saif Al Saadi, CEO of TANMIA, one of the promoting entities of Minerals Development Oman SAOG, which is currently under formation.

Vale in Oman’s CEO, Sergio Espeschit, added,“Since our operations were inaugurated and began operations four

INFRASTRUCTURE DEVELOPMENT

years ago, we committed to the Sultanate to create this SOHAR Dry Bulk Logistics Corridor, which will directly benefit the mining and minerals sector in Oman. Our dry bulk terminal in SOHAR Port already has the necessary internal infrastructure and logistics capability to support the diversification of Oman’s economy that will enable the Sultanate’s minerals to reach global markets at competitive prices.”

SOHAR Port CEO Andre Toet summed up the agreement, saying,“Our existing dry bulk infrastructure is world class; this agreement is about utilising that same investment for exports – and that makes so much sense for all of us; it should lead to more growth, more jobs and a more sustainable economic model for Oman.”

APRIL 2016 57

MANAGEMENT

The pay packet for 2016 What can you expect this year? Will you get a pay raise, will you not? GSC spoke to experts handling the oil and gas, facilities management and logistics sectors at Hays Recruitment Experts Worldwide about the outlook for employment benefits this year

James Newman

58 APRIL 2016

C

ompanies and personnel were quite unprepared for the monumental slide in oil prices.

Certain countries are suffering more than others, with geopolitics coming into play, and certain parts of the industry are making mass redundancies, which was predominately the service sector and drilling, projects are put on hold or cancelled, and the uncertainty of the Iranian impact on the regional and global markets is adding to the uncertainty.

“So with all that going on caution was the back story to the salary survey,” says Gary Ward, Operations Director – Hays Oil & Gas – EMEA. “As with previous years, a lot of information came back on the benefits package that’s becoming more and more important to employees, and we’ve seen a year on year increase in the number of employees receiving benefits as part of an overall package,” he continues, adding, “Employers were again cautious, but fairly optimistic about head count away from drilling and oilfield service companies, with 31 per cent expecting a decrease and 32 per cent remaining static, the rest were looking at increases but less than previous years.”

Employees were also cautious about sustained employment, and employees in the GCC were on average more optimistic than the rest of the world, it was found.

“Personally, I feel the Oil and Gas industry will fare ok. It will obviously be leaner,

which isn’t such a bad thing, and a lot of lessons are being learnt the hard way due to the downturn. But the GCC countries should come out of this stronger,” he states.

In terms of future roles, it is difficult to predict which will come out on top. At the moment, in the GCC, disciplines focused on construction and or expansion of Refineries and Petro Chemical facilities are doing well.

The future is almost impossible to predict though.“One knock-on effect of the global redundancies, which the industry agrees on, is that with the thousands made redundant, we could face severe skill shortages in the coming years across wide parts of the industry,” he warns.

James Newman, Senior Recruitment Consultant – Hays, talks about the situation in the facilities management industry.“Recruitment in the FM industry is challenging. The qualified and suitably experienced candidates are few and far between, and we have noticed that

MANAGEMENT

APRIL 2016 59

MANAGEMENT

demand for project specific candidates is often high.

Generally speaking, large service providers will have several interview stages before sending an offer to a candidate.”

The first stage will include an HR/Recruitment screening, this is followed by an interview with the direct line manager, and the process usually closes with a client interview.“We have found that FM service providers often Scott Wilson choose to invest in recruiting candidates with proven experience rather than spend on the training of less experienced candidates. This is particularly relevant in the current market, as we have seen that employees are unlikely to stay at the same company for longer than two or three years,” he adds.

Due to global warming and pressures from government entities for buildings to become more ‘energy efficient’, there is

60 APRIL 2016

expected to be an increase in demand for LEED qualified facilities managers in the coming years. These people are able to reduce the usage/ wastage of gas, water and electricity in the most costefficient ways.

Coming to the logistics industry, Scott Wilson, Associate Business Manager – Hays, has this to say:“We have seen the job market within the Logistics Industry to be relatively buoyant versus other industries in the GCC. We would not be surprised to see a fall within some areas of project logistics, given the turndown in the oil industry. However, the Middle East remains a key distribution hub connecting the east with the west. Our recent salary survey has found that 69 per cent of candidates (registered within Logistics / Supply Chain specialism) in the market are optimistic about opportunities inside and outside their current company heading into 2016.”

The job market is expected to be more active at a junior to middle management level, particularly within the sales side. This is as a result of organisations continuing to search for new avenues to drive revenue growth, be that dealing with new industries/ accounts or developing new trade lanes.

Hiring activity of senior management is likely to be more subdued than those more junior/middle management positions mentioned above. “We expect new openings to arise less frequently and face a large amount of competition from candidates who will be keen to fill these positions. Finally, we believe that employers will focus on candidates with local/regional experience, which will potentially limit opportunities for those outside of the region. Furthermore, with the general market in an unsettled place, it is likely that when employers do recruit they will be looking for potential employees to tick 10/10 boxes. Job seekers should not be surprised if the process take slightly longer with more steps than they have been used to,” he concludes.